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Pluristem Initiation BUY - $8 Target Pluristem Initiation BUY - $8 Target Document Transcript

  • EQUITY RESEARCH INITIATIONBiotechnology Initiation BuyJuly 24, 2012Closing Price 7/24/2012 $3.18 Pluristem Therapeutics Inc.12-Month Target Price:52-Week Range: $8.00 $1.98-$3.85 (PSTI – NASDAQ – $3.18)Market Cap (M): $139 Pluristem: A Unique Allogeneic ProductShares O/S (M): 43,713Float (M): 39,342  We are initiating coverage of Pluristem Therapeutics Inc.Avg. Vol. (000) 223 with a Buy rating and $8.00 price target. We believe thatCash & Cash Equivilents (M) Q1-2012 38,629 PSTI is a well-positioned company with a unique product and aDebt (M) $0 strong SWOT (strengths, weaknesses, opportunities, and threats)Dividend/Yield: $0.00/0.00% product analysis that we expect to progress solidly over the nextRisk Profile: Speculative year as a global phase II trial begins in intermittent claudicationRevenues 2017 2018 (IC).CLI $181 $347  United Therapeutics has opted in. In June 2011, Pluristem signed a license with United Therapeutics (UTHR, $49.87, Not Rated) for the development of PLX cells in pulmonary disorders. FYE: December GAAP EPS P/E The license agreement initiated at $7M and includes an 2011A $ (0.35) nm additional $37.5M in regulatory milestones, as well as other 2012E $ (0.31) nm attractive elements. We believe this could be one of many 2013E $ (0.42) nm therapeutically focused deals to come. 2014E $ (0.43) nm 2015E $ (0.31) nm  Clinical programs are getting ready to begin. In July, 2016E $ 0.04 71.4 Pluristem announced (in anticipation of the start of the phase II 2017E $ 1.66 1.9 study in IC) that the company has selected CPC Clinical 2018E $ 3.30 1.0 Research for trial support services related to enrolling and sustaining clinical sites. The IC study population will be comprised of ~150 patients (Fontaine class IIb/Rutherford category 2-3) in a dose-escalation, placebo-controlled, double- blinded study.  Great manufacturing system. Pluristem utilizes Placental eXpanded (PLX cells) in the treatment of a variety of inflammatory and ischemic conditions. The company has developed a manufacturing system which utilizes a bioreactor that allows the growth of cells in a 3D culturing methodology and the process is designed to simulate a range of ischemic conditions which allows the product to be tailored for specific indications (such as PAD, CLI, ARS, PAH, and even orthopedics). The system itself is designed to be very efficient translating into high manufacturing margins.  Model assumptions. We assume Pluristem enters the criticalSource: Edgar as of 07/24/2012 limb ischemia (CLI) market in 2016. We are not assuming anyJason Kolbert (212) 895-3516 other revenues as part of our model; however, we believe that itjkolbert@maximgrp.com is extremely likely that Pluristem will advance multiple programs into the clinic later this year and next.  Compelling valuation. We provide three valuation metrics – FCF, discounted EPS, and sum of the parts – and are modeling PSTI out to 2018. We only assume success in CLI and have not included milestones or deal revenues related to United Therapeutics or other new partners. This derives a 2018 EPS number of $3.30, which we discount at 30% and equallyweight the three metrics to derive an $8.00 price target. Maxim Group LLC 405 Lexington Avenue New York, NY 10174 – www.maximgrp.com SEE PAGES 24 - 26 FOR IMPORTANT DISCLOSURES AND DISCLAIMERS
  • Pluristem Therapeutics (PSTI) CORPORATE PROFILEPluristem Therapeutics (PSTI)MATAM Advanced Technology Park #20Haifa 31905 IsraelPhone: (972) 74-710+7171Web site: www.pluristem.com Investment Risks:Senior Management:Zami Aberman, President and CEO. Mr. Aberman,  Clinical trial risk“Zami,” joined Pluristem in September 2005 and  Manufacturing and product qualitychanged the company’s strategy towards cellular  SWOT Risk. (strengths,therapeutics. Mr. Aberman’s vision to use the maternal weaknesses, opportunities, and threats) as Pluristem is likely to besection of the placenta (decidua) as a source for cell the second cell-based product in thetherapy, combined with Pluristem’s 3D culturing CLI marketplace.technology, led to the development of company-unique  The potential need to raiseproducts. Mr. Aberman brings to Pluristem a keen sense additional capitalof business and entrepreneurship.Yaky Yanay, Chief Financial Officer, Prior to joining (PLEASE SEE PAGES 19, 23-25 FOR APluristem, Mr. Yanay was the Chief Financial Officer of MORE DETAILED OUTLINE OF OURElbit Vision Systems Ltd., before which he served as “INVESTMENT RISKS”)manager of audit groups of the technology sector at Ernst& Young Israel. He holds a bachelors degree with Institutional Ownership: 20%honors in business administration and accounting and is a Inside Ownership: 14%Certified Public Accountant in Israel. Shares Short: 0.5MCompany Background. Pluristem Therapeutics Inc. Balance Sheet Summary: $MM(PSTI) is a leading developer of placenta-based cell (As of Mar 31, 2012)therapies. The companys patented PLX (PLacental Cash & Restricted Cash: $40eXpanded) cells drug delivery platform releases a Long-Term Debt: (M) $0.0cocktail of therapeutic proteins in response to a variety of Quarterly Burn Rate ($3-4)local and systemic inflammatory diseases. PLX cells aregrown using the company’s proprietary 3D micro- Analysts Following the Co.: 4environmental technology and are an off-the-shelf (Excluding Maxim Group)product that require no tissue matching or immune-suppression treatment prior to administration. The PLX-PAD comprehensive clinical development plan has beenrecognized by both the EMA and FDA, targeting a sub-population of 20-million patients of the peripheral arterydisease (PAD) market.Data from two Phase I clinical trials indicate thatPluristem’s first PLX product, PLX-PAD, is safe andpotentially effective for the treatment of end-stage PAD.Pluristem’s pre-clinical animal models havedemonstrated that PLX cells are also potentially effectivein nerve pain and muscle damage when administeredlocally and in inflammatory bowel disease, MS, andstroke when administered systemically. Pluristem has astrong patent portfolio, company-owned GMP certifiedmanufacturing and research facilities, strategicrelationships with major research institutions, and aseasoned management team.Maxim Group LLC 2
  • Pluristem Therapeutics, Inc. (PSTI) COMPANY OVERVIEWPluristem Therapeutics is a biotherapeutics company formed in 2003 and focused on thedevelopment of allogeneic, non-embryonic, adult stem cell-based cellular therapies that arederived from the human placenta for the treatment of degenerative, ischemic, and autoimmunedisorders. These PLX products (Placental eXpanded) are off-the-shelf, ready-to-use products thatdo not require histocompatibility matching or immunosuppression. The company is initiallyfocused on advancing its lead clinical candidate, PLX-PAD, for treatment of critical limbischemia and IC. In addition, the company is evaluating programs to address unmet needs inorthopedics, bone marrow transplantation neuropathic and inflammatory pain, inflammatorybowel disease, muscle trauma stroke, and multiple sclerosis. Pluristem’s headquarters, researchand development laboratory, and manufacturing facility (cGMP approved), are located in Haifa,Israel.Exhibit 1. Upcoming Catalysts for PluristemProduct Event Tim ing SignificancePLX-Critical Limb Ischemia Phase I data released 2011 completedPLX-Critical Limb Ischemia Phase II/III Program Begins 2013 +PLX-Claudication Begin PII study Q4-2012 +PLX - Buergers Disease Begin PII study, "orphan - fast pathw ay" to marketplace (Jump to PIII?) 2H-2013 +Muscle Injury - Hip Replacement Phase I/II -submitted to the PEI for approval 2H-2012 +PLX-Orthopedic Begin PII study 2H-2012 +Ischemic Heart Disaese, Diastolic HF Begin PII study tbdPLX-Stroke Begin PII study tbdPLX-Bone Marrow Transplantation/GvHD/ARS Begin PII study tbdPLX-Multiple Sclerosis Begin PII study tbdPLX-Pulmponary Hypertension Begin PI (w ith United Therapeutics) study 2H-2012IV Administration Formulation and Biodistribution Development 2012 +Rheumatoid Arthritis Phase II Study 2014 +IBD Phase II Study 2014 +Stock Significance Scale: + of moderate importance; ++ higher level; +++ highlySource: Maxim estimatesExhibit 2. Pluristem’s Development PipelineSource: PluristemMaxim Group LLC 3
  • Pluristem Therapeutics, Inc. (PSTI)Financials. In February 2011, Pluristem raised approximately $40 million from a public offering.In June 2011, the company entered into an exclusive license agreement with United Therapeuticsfor the use of our PLX cells to develop and commercialize a cell-based product for the treatmentof PAH. We estimate that the company has approximately $40 million in cash and cash assetsand will spend approximately $15 million in 2012.The license agreement allows United exclusive worldwide licensing rights for the developmentand commercialization of PLX cell-based product to treat PAH. Under the terms of theagreement, Pluristem was paid $7 million upfront (in August 2011), and there may be up to $37.5million in regulatory milestones along with reimbursement of up to $10 million for certainexpenses related to the possible establishment of a manufacturing facility in North America. Inaddition, United will cover all development costs. Following commercialization of the product,United will pay a royalty and agree to purchase commercial supplies of the developed productfrom Pluristem at a specified margin over cost.Intellectual property (IP). In 2007, Pluristem purchased patents covering the PluriX BioreactorSystem from the “Technion-Israel Institute of Technology” and the “Weizmann Institute ofScience,” replacing an earlier license – U.S. Patent 6,911,201, issued 6/28/05 – “Method ofproducing undifferentiated hematopoietic stem cells using a stationary phase plug-flowbioreactor.” The company currently has a total of 20 granted patents with 76 applicationspending for production, process, and therapeutic uses. The expiration dates of these patents, basedon filing dates, range from 2019 to 2030. We note that Pluristem can protect its product based onboth IP and several levels of trade secrets and know-how.Pluristem’s Patent Portfolio:  A propriety expansion method for 3D Stromal Cells  Composition of matter claims on the cells  The therapeutic use of PLX cells for the treatment of a large variety of medical conditions  Selection criteria for determination of cells suitable for administration.Bull case. Bulls argue that Pluristem is a fast follower to a company like Aastrom Biosciences(ASTM-$2.00-Buy Rated), which is now pursuing a pivotal program in critical limb ischemia.The differences between the companies are significant in that Pluristem utilizes an allogeneicapproach with autologous-like properties. Immuno-privileged cells are derived from the uniqueenvironment of the placenta. Cell vitality becomes a strategic advantage and translates in terms ofpotency. In fact, there is a wealth of antidotal information that suggests young cells (placental)are more potent and vibrant than autologous cells from older patients with co-morbidities. Giventhe positive results that others in the space have seen (Aastrom), we believe that PLX cells shoulddo just as well – if not better. The company also has excellent pre-clinical and Phase I clinicaldata that suggest PLX cells down-regulate local inflammation while creating neovascularizationof local tissue. We do not believe that cellular based integration of the host graft is required toimpact the disease (CLI), and that it is these localized paracrine mechanisms that are responsiblefor the efficacy seen. Value creation tends to occur in small capitalized biotechnology companiesonce proof of concept is established. Early proof of concept (POC) from the current Phase Isafety studies suggests the PLX cells are active. The next step is a larger Phase II/III study, whichcould begin in 2H13 with POC data in early 2015. Given the unmet medical need in CLI and thevalue of an off-the-shelf, allogeneic therapy, we believe Pluristem could see a significant rise invaluation on positive Phase II interim data. The Phase II study for IC should start in 3Q12, withPOC data in early 2014.Maxim Group LLC 4
  • Pluristem Therapeutics, Inc. (PSTI)Bear case. Bears will point out that Pluristem is an early-stage stem cell company with nothingbut Phase I safety data. It is unknown if the PLX cells will show efficacy in any indication, muchless critical limb ischemia, due to its high hurdles. Proof of concept data is still two years away.Bears likely also have concerns about the company’s small size and its ability to run Global (EUand U.S.) programs. Given the prior failures [such as Sanofi-Aventis’ (SNA, $66.90, NR)AMARIS trial in CLI] and the ambiguous results from Aastrom’s Phase II study, CLI hurdlesremain high. Phase II trials are not typically powered high enough to draw statistically validconclusions that can predict results in the larger and highly variable CLI population.Our take. We believe that Pluristem is on the right track. We see the SWOT (strengths,weaknesses, opportunities, and threats) as quite favorable for the company. We believe the 3Dbio-reactor is an exciting technology, as well as the cell source (maternal, placental derived).Clinically, the stock needs time, but we believe that fundamental valuation is low given thepotential across multiple indications. We also believe that Pluristem will benefit as othercompanies’ trials advance, creating a surrogate proof of concept for PSTI. INVESTMENT SUMMARY AND CONCLUSION We are initiating coverage of Pluristem Pluristem: The SWOT Looks Good Therapeutics (PSTI) with a Buy Rating and a 12-month target price of $8.00 PLURISTEM’S MANUFACTURING PROCESSExhibit 3.Schematic drawing of placenta as source of adherent stromal cells (ASC)Source: www.edward.org/.../ graphics/images/es/17010.jpgMaxim Group LLC 5
  • Pluristem Therapeutics, Inc. (PSTI)Pluristem develops adherent stromal cells (ASC). The cells are (1) extracted from humanplacentas received from schedule caesarean sections following childbirth. ASCs are stromal cellsthat have surface markers resembling mesenchymal stem cells. The stem cells are obtained fromthe maternal side of the placenta, rather than the fetal side, as the company believes the cells onthe maternal side have greater immunomodulatory capability. Placentas are (2) processed,ensuring lack of contamination and removal of any immune cells, and expanded in two-dimensional technology. The cells are then (3) cultured on a polystyrene fibrous matrix in a three-dimensional reactor called the PluriX Bioreactor System, which replicates the naturalenvironment. This proprietary expansion method permits highly controlled expansion of largequantities of cells. The expanded cells, referred to as Placental eXpanded cells or PLX, arerecovered from the culture, packaged, and (4) cryopreserved ready-to-use in liquid nitrogen forlater use. The entire process takes about eight weeks, yielding sufficient cells from one placentato treat about 10,000 patients (each dose is ~300 million cells). Among the differentiating factorsfor Pluristem’s technology are the unique source of cells and the method of manufacturing.Exhibit 4. PLX Cells’ Manufacturing ProcessThe cells are extracted from the maternal side of the placenta and ultimately grown in a 3Dbioreactor, designed to create a three-dimensional environment. 1 2 2D 3D 3 4Like Athersys (ATHX-$1.50-Buy Rated), Osiris (OSIR, $9.33, NR), and Mesoblast (MBLTY-,$29.95, Buy), Pluristem uses allogeneic cells that can be expanded in culture and used off-the-shelf without tissue matching or immunosuppression. We believe Pluristem’s three-dimensionalbioreactor manufacturing technology is one of the company’s key differentiators, allowing it toexpand cells more efficiently under a fully controlled, more natural environment (3D versus 2D),designed to be like the body itself. No external growth factors are used, resulting in a natural cellgrowth cycle. The process is designed to keep the number of cell doublings below 25, keeping thecells young. The process is protected by a U.S. patent (6,911,201). The company currently has atotal of 20 granted patents and about 80 applications pending for production, process, andtherapeutic uses. The system capacity is significant [a 75-liter bioreactor is equivalent to 20,000tissue (2D) culture flasks]. The 3D bioreactor technology enables the change of the cells’secretion to include different products from the placenta and control the secretion of anti-inflammatory and pro-angiogenic cytokines dedicated to different indications. The companyemploys a variety of QC measures that ensure consistency between batches across placentas.Maxim Group LLC 6
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 5. Adherent Stromal CellsLeft: Microscopic visualization (x40) of placenta-derived ASCs at the 2D growth phase; Center:Placenta-derived ASCs homing on a carrier in the 3D growth phase (electronic microscope); andRight: The carrierSource: PluristemIs the PLX Product Cost Effective? Pluristem has stated that, upon scale up, its cost of goods(manufacturing only) will allow pharmaceutical margins to the product. Average dosing isexpected to be close to 300 million cells. Given the high efficiency of the 3D bioreactor, it’slikely that one placenta could result in enough products for 10,000 patients.Why PLX Cells? PLX cells are non-immunogenic; hence, they can be used for transplantwithout donor matching. In addition, they appear to possess immunosuppressive properties andcan down-regulate production of pro-inflammatory cytokines and prevent proliferation of pro-inflammatory cells (refer to Exhibit 9). In a mixed lymphocyte reaction (MLR) test of Pluristem’splacental stem cells with blood from any donor, the stem cells neither attack nor get attacked bydonor cells. This implies that transplanted PLX cells are unlikely to cause graft vs. host disease orbe rejected. In fact, experimental data has demonstrated that, following administration, cellsresponded to the local environment by secreting anti-inflammatory and pro-angiogenic cytokinesthat down-regulate inflammatory markers, resulting in the formation of new capillaries. The PLXcells have a life expectancy of just a few weeks and are then cleared from the body.Mesenchymal Cells (MSC) General Characteristics: Phenotype. Positive markers: CD105,CD73, CD90, and CD29 are highly expressed by PLX cells. Negative markers includehematopoietic markers (CD45, CD34, CD19, CD14, and HLA-DR), and the endothelial markerCD31. MHC class I: Intermediate levels of HLA major histocompatiility complex molecules.HLA class II antigens: Do not express HLA class II antigens on the cell surface. Do not expressco-stimulatory molecules, which are typically expressed by antigen presenting cells (APCs) suchas CD80, CD86, and CD40.Maxim Group LLC 7
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 6. Mechanism of Action Endothelial cell proliferation Inflammatory Environment Decrease T cell proliferation Decrease IL-10 INF-g inflammatory Ischemic Environment TNFa signals IL-6 IDO IL-17A TGFb IL-1b HGF bFGF PLX Ang-1 VEGF HGF PlGF VEGF bFGF Ang-1 Source: PluristemExhibit 7. PLX StoragePLX cells are stored in ready-to-use vials or cryogenic bags. The cells have at least one-yearstability. We also are aware that other allogeneic makers have had quality control problems inthe thawing of cells. We see Pluristem as reducing variations by supplying users with a dedicateddevice (or equivalent methods). Cells are then kept at room temperature prior to administration (up to 2 hours). Administration is with a standard needle.Source: PluristemMaxim Group LLC 8
  • Pluristem Therapeutics, Inc. (PSTI) PLX-PAD/CLICritical limb ischemia (CLI) is a devastating end-stage form of peripheral arterial disease (PAD)– a vascular disease caused by obstruction of large arteries in the lower extremities, resulting inprogressive reduction of blood flow to the extremities (feet, legs, and hands). The patient suffersskin ulcers and sores, as well as severe pain caused by ischemia, tissue loss, or ischemicneuropathy. The Sage Group (a research think tank) estimates that there are more than 2.8million CLI patients and as many as 18 million suffering from PAD in the United States, with anincidence that is growing with an aging population. The condition remains a highly unmetmedical need; up to 40% of the CLI population are characterized as “no-option” patients. Thisgroup is ineligible for further revascularization and may require amputation within the first year.Major amputation can increase the wound size, cause difficulty in wound healing (due to age),lead to the development of gangrene, increase mortality/morbidity, and much more, making it avery unattractive alternative.Exhibit 8. Dosing and AdministrationPluristem has demonstrated that local dosing for CLI offers significant advantages. The cells arebelieved to exert their effect and get cleared in a few weeks post-dosing.Source: PluristemExhibit 9. PLX Cell Migration and FateBelow is an example of biodistribution of PLX-PAD cells in Balb/C mice following intra-muscular (IM) and intra-venous (IV). 24 hrs post injection 3-4 days post injection 6 days post injection IM IV IM IV IM IVSource: PluristemPLX cells in this study were stably infected with a lentiviral construct expressing the luciferasegene under the CMV promoter. Two weeks post infection, 2x106 cells were injected into Balb/Cmice. Injected cells were monitored using the IVIS Lumina Imaging System. Results show thatPLX cells injected IM are retained only at the site of injection and persist for less than a week inBalb/C mice. Cells injected intravenously traveled to the lungs and returned to the site of injury.Maxim Group LLC 9
  • Pluristem Therapeutics, Inc. (PSTI)Phase I safety and efficacy clinical trial results. Pluristem has conducted two Phase I studies,which began enrolling patients in the summer of 2009. The studies were designed to evaluate thesafety of PLX cells and included accessing the patient’s immunological profile before and afterthe local administration of the PLX cells. Efficacy parameters were assessed at five differentdoses. These studies were performed in parallel in Europe and the United States.Three-month follow-up data was reported for 21 patients across the two studies. The first groupin Germany consisted of 15 patients (10 males and 5 females, ages 40-80) undergoing threetherapeutic courses. The second group in the United States consisted of 6 all male patients (ages51-70) undergoing a single dose.The patients were all qualified as afflicted with CLI in two open-label, dose-escalation, Phase Istudies conducted at Duke University Medical Center, Stanford University Medical Center, theCenter for Therapeutic Angiogenesis in Birmingham, Alabama, and St. Franziskus Hospital,supported by the Charité - University Medicine Berlin.The results: safety endpoints  No significant unfavorable effects due to the administration of PLX cells were reported. One major amputation was reported in the PLX (PAD) high-dose group and was determined to be unrelated to the administration of PLX cells. This case represented 4.7% of all patients treated in this study and compares to historical data that indicates a 35-40% major amputation rate in CLI patients per year (but statistics in such a small study have little meaning). The study showed 85% Amputation Free Survival (AFS) after 12 month.  None of the patients developed an anti-HLA antibody response and no specific anti-PLX HLA class-I or class-II antibodies were detected in the patients tested. This indicates PLX-PAD cells are immune competent and can be given to the patient “off-the-shelf” without a need for matching.  Immunological profiles demonstrated a rise in anti-inflammatory and angiogenic protein secretion post-dosing, suggesting PLX-PAD cells function to deliver appropriate therapeutic proteins in response to the ischemic, inflammatory process of CLI.The results: efficacy parameters  Across all doses, 13 patients (62%) demonstrated an improvement in the ankle-brachial index (ABI), a measure of blood flow. Eleven patients receiving the intermediate dose demonstrated a statistically significant improvement from baseline (P=0.033).  Across all doses, 13 patients (62%) demonstrated an improvement in the Transcutaneous Oxygen Pressure (TcPO2), a measure of tissue oxygenation. This improvement was statistically significant in the European study where the distribution of injections was higher (P=0.05).  Across all doses, 17 patients (81%) demonstrated an improvement in ABI, TBI, or TcPO2.  Across all doses, 17 patients (81%) demonstrated a statistically significant improvement from baseline in the King’s College Score for Quality of Life (QoL) assessment (P< 0.001). Eleven patients receiving the intermediate doses demonstrated the best improvement from baseline in the QoL score (P< 0.001).  Across all doses, 15 patients (71%) demonstrated an improvement from baseline in the reduction of pain as measured by using the VAS. This improvement was statistically significant in the European study where the distribution of injections was higher (P=0.013).Maxim Group LLC 10
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 10. Individual Results – Proof of Concept?Individual patient examples suggest cells impact the progression of disease.Source: PluristemExhibit 11. Allo-Immunogenicity in VitroNone of the patients showed T-cell presentation to PLX cells at treatment. None of the patientsdeveloped T-cell sensitization to PLX after therapy (1-4 weeks). Specific cellular sensitization toPLX cells was not detected. IFN-g ELISPOT w ith addition of PLX-PAD cells no alloresponse donor 1-7 to allo-PLX-PAD (resp.) responder responder responder responder responder + medium + allo- APC + + allo-PLX-1M allo-PLX-1M + allo-PLX-1M Read out: (negative (positive (1:5) (1:10) (1:50) cytokine release control) control) (ELISPOT) In vitro: PLX-PAD cells do not trigger cell-mediated Th1-like cells by allogeneic non-HLA matched T cells in normal donorsSource: PluristemMaxim Group LLC 11
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 12. ImmunodepressionPLX injection causes a transient-dose dependent immunodepression. There was noimmunosuppression in injected patients (immunoparalysis).Source: PluristemImmunological conclusions. The trials demonstrated that there were no PLX-PAD relatedserious adverse events. No patients developed an anti-HLA antibody response and no specificanti-PLX-HLA class-I or class-II antibodies were detected in the tested patients. There was noalloreactive T cell response to PLX cells. Evidence for systemic immunomodulation wasdemonstrated with transient reduction in the expression of HLA-DR/CD14+. There was no severeimmunosuppression in injected patients (immunoparalysis). In vivo data confirmed the in vitrodata.Exhibit 13. Angiogenic Growth Factors VEGF bFGF PlGF HGF IL-6Source: medicineworld.org/.../ angiogenesis-9421.jpgMaxim Group LLC 12
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 14. Secretion of Angiogenic FactorsSecretion of VEGF by PLX under normoxia (green) and hypoxia: Different placenta-derivedadherent cells were cultured for 24 hours under normal or hypoxic conditions. Source: PluristemExhibit 15. HUVEC Proliferation and PlGF Secretion 70 ,000 500 60 ,000 HUVEC 50 ,000 HUVEC+ PLX 400No of Cells PlGF PlGF (pg/ml) 40 ,000 300 30 ,000 200 20 ,000 100 10 ,000 0 0 PLX HUVEC HUVEC+PLX HUVEC HUVEC+PLX HUVEC 10000 , HUVEC ,50000Source: PluristemWhat do the results mean? The results suggest that PLX cells are safe and show an efficacysignal. The trials pave the way for a larger Phase II proof-of-concept study. The company nowintends to pursue a larger study with both the U.S. Food and Drug Administration (FDA) andEuropean Medicines Agency (EMA). We know that active discussions are ongoing to determinethe optimal study design. We also see the potential for the company to design a Phase II studythat can be expanded to a registrational study. As such, Pluristem can try to close the gap on thecompetitive field with Aastrom (now in a pivotal trial in CLI).What kind of size and power is needed for the Phase II program? We know that the phase IItrial in IC will be in 132 patients. For CLI, we expect a larger trial that can be expanded to apivotal one. If the CLI study generates positive results, we would look for the expansion to aregistrational design (n=600) pivotal trial.Maxim Group LLC 13
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 16. CLI Phase I/II Approved by the FDA and EMAPrior data suggests that PLX-PAD is safe, improves quality of life, and is a potentially effectivetreatment for limb ischemia. Phase I/II results demonstrated an 85% AFS (amputation-freesurvival rate). The planned next-generation trial (n=132) is approved by the FDA, and thecompany is planning to pursue a SPA (special protocol assessment) for the pivotal trial in CLIand Buerger’s disease.Source: PluristemFinancial modeling assumptions – IC & CLI. According to the company, the phase II IC trial(n=132) should begin soon (2H12), and we expect the start of the PII/III trial in 1H13, dependingon how quickly the new manufacturing facility is operational and validated. If this is the case, wecould see a product approval and launch by 2016. Based on the cost of other biologics and anunderstanding of the cost saving of preventing some of the downstream complications related toCLI, we would assume pricing in the $30,000 range.Exhibit 17. CLI Market Model U.S. PAD, CLI, Target Market 2012 2013 2014 2015 2016 2017 2018 14 MLN "PAD " at baseline 000: 14,235 14,455 14,669 14,878 15,082 15,280 15,473 Market Size Growth (Annual) 1.5% 1.5% 1.4% 1.4% 1.3% 1.3% % Progress to CLI 7000% 7% 7% 7% 7% 7% 7% 1 MLN CLI at baseline 996,417 1,011,821 1,026,843 1,041,485 1,055,747 1,048,371 1,083,143 % with No Options 50% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% CLI Patients with No Medical Options 498,208 505,910 513,422 520,742 527,874 524,185 541,572 % with Tissue Loss 50% 50% 50% 50% 50% 50% 50% CLI Patients with Tissue Loss (subset of No Options) 249,104 252,955 256,711 260,371 263,937 262,093 270,786 % viable for Therapy (insurance, co-morbidities) et al 50% 50% 50% 50% 50% 50% 50% CLI Target Patient Population 124,552 126,478 128,355 130,186 131,968 131,046 135,393 Market Share Penetration (PLX) 0% 0.0% 0% 0% 1% 2% 10% Number of Procedures 0 0 0 0 994 13,392 25,053 Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Price per Procedure $ 30,036 30,041 30,053 30,065 $ 30,077 30,089 $ 30,101 Price Growth 0% 0% 0% 0% 0% 0% U.S. Annual Sales (000) $ - $ - $ - $ - $ 29,888 $ 402,961 $ 754,114 % Growth 1248% 87%Source: MaximMaxim Group LLC 14
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 18.Other Possible Indications: The Field Could Be UnlimitedSource: PluristemExhibit 19. PLX’s Therapeutic EffectPLX’s therapeutic effect relates to the cell’s capability to respond to environmental signals withinthe patient’s body by secretion of different proteins. PLX cell do not engraft and graduallydisappear from the patient’s body within a few weeksSource: MaximOn June 19, 2011, Pluristem entered into an exclusive license agreement with UnitedTherapeutics for the use of its PLX cells to develop and commercialize a cell-based product forthe treatment of pulmonary hypertension (PAH). The license agreement provides that UnitedTherapeutics will receive exclusive worldwide license rights for the development andcommercialization of Pluristem’s PLX cell-based product to treat PAH.Maxim Group LLC 15
  • Pluristem Therapeutics, Inc. (PSTI)The license agreement provides for the following consideration payable to Pluristem: (1) anupfront payment of $7M (paid in August 2011, which includes a $5M non-refundable upfrontpayment and $2M refundable advance payment on the development); (2) up to $37.5M uponreaching certain regulatory milestones with respect to the development of a product to treat PAH;(3) reimbursement of up to $10M of certain company expenses if the company establishes amanufacturing facility in North America upon meeting certain milestones; (4) reimbursement ofall costs in connection with the development of the product; and (5) following commercializationof the product, royalties and the purchase of commercial supplies of the developed product fromthe company at a specified margin over the company’s cost.Exhibit 20. PSTI-UTHR Economic CollaborationSource: PluristemExhibit 21. Case Study: Pluristem announced earlier this year that its PLX cells had saved thelife of a seven year-old girl suffering from aplastic bone marrow and who had undergone twofailed bone marrow transplants. With her condition rapidly deteriorating her doctors injectedPluristems PLX cells intramuscularly, following which the girl experienced a reversal of hercondition with a significant increase in her red blood cells, white blood cells and platelets.Source: PluristemMaxim Group LLC 16
  • Pluristem Therapeutics, Inc. (PSTI)As a result of this experience, Pluristem announced that it is now preparing to apply to the U.S.Food and Drug Administration for approval of its PLacentaleXpanded (PLX) cells for thetreatment of aplastic bone marrow as an Orphan Drug. Gaining Orphan Drug status approval ispart of Pluristems strategy for penetrating the bone marrow recovery market, starting withtreatment of aplastic anemia, a disease in which bone marrow greatly decreases or stopsproduction of blood cells and strikes five to ten people in every million. Orphan Drug Status inthe U.S. helps the company to accelerate the path to full FDA approval. Pluristem is also planningto file for a similar designation in Europe and global territories.A note on Orphan status: Gaining Orphan Drug Status carries multiple potential benefits,including the possibility of an expedited regulatory process, availability of grant money, certaintax credits and seven years of market exclusivity. In August 2011, Pluristem successfully appliedfor, and received, Orphan Drug Status from the FDA for its PLX cell therapy in the treatment ofBuergers disease.Exhibit 22. Product Differentiation Message: It’s important for us to understand that Pluristemsees its PLX allogeneic cells as being able to be modified (based on various manufacturingcriteria) and, as such, translate into multiple products in multiple indications. The companypresents this in the graphic below.Source: PluristemMaxim Group LLC 17
  • Pluristem Therapeutics, Inc. (PSTI) VALUATIONWe provide three valuation metrics – FCF, discounted EPS, and sum of the parts – and modelPSTI out to 2018. We only assume success in CLI and have not included milestone or dealrevenues related to United Therapeutics or other new partners. This derives a 2018 EPS numberof $3.30, which we discount at 30% (large) and equally weight the three metrics to derive an$8.00 price target.Exhibit 23. FCF Model: Assume a 30% Discount Factor and Include Future CLI Revenues Average $ 7.8 Price Target $ 9.9 Year 2017DCF Valuation Using FCFF (mln):units (millions - $) 2012E 2013E 2014E 2015E 2016E 2017E 2018EEBIT (14,088) (18,496) (19,238) (15,348) 2,714 97,235 200,574Tax Rate 0% 0% 0% 10% 16% 23% 26%EBIT(1-t) (14,088) (18,496) (19,238) (13,745) 2,275 74,977 148,380- Cap Expenditures (996) - - - - - -+ Depreciation 393 432 476 523 575 633 696- Change in NWCFree Cash Flow to Firm (FCFF) (12,699) (18,064) (18,762) (13,222) 2,851 75,610 149,076PV of FCFF (47,152) (51,592) (41,221) (22,345) 3,706 75,610 114,674Discount Rate 30%Long Term Growth Rate 1%Terminal Cash Flow 519,197Terminal Value YE2010 399,382NPV 431,063NPV-Debt -Shares out (thousands) 1Q-12E 43,713 March 2012NPV Per Share 9.9Source: Maxim estimatesSource: Maxim GroupExhibit 24. Discounted EPS Model: Based on 2018 EPS of $3.30, a PE of 15x, and a 30%Discount FactorCurrent Year 2012 Discount Rate and Earnings Multiple Varies, Year is ConstantYear of EPS 2018 2018 EPSEarnings Multiple 15 10.2 20% 25% 30% 35% 40% 45%Discount Factor 30% 10 $11.04 $8.64 $6.83 $5.45 $4.38 $ 3.55Selected Year EPS $ 3.30 15 $16.56 $12.97 $10.25 $8.17 $6.57 $ 5.32NPV $ 10.2 20 $22.09 $17.29 $13.66 $10.89 $8.76 $ 7.10Source: Maxim estimates Earnings 25 $27.61 $21.61 $17.08 $13.62 $10.95 $ 8.87PlusNet Cash Per Share Multiple 30 $33.13 $25.93 $20.49 $16.34 $13.14 $ 10.64Share Price $ 10.25 35 $38.65 $30.25 $23.91 $19.07 $15.33 $ 12.42 40 $44.17 $34.58 $27.33 $21.79 $17.52 $ 14.19 45 $49.69 $38.90 $30.74 $24.51 $19.71 $ 15.97 Source: Maxim GroupMaxim Group LLC 18
  • Pluristem Therapeutics, Inc. (PSTI)Exhibit 25. Sum of the PartsPluristem Sum of the Parts LT Gr Discount Rate Yrs. to Mkt % Success Peak Sales MMs Term ValPLX-CLI / IC / Buergers Disease 1% 30% 5 65% $500 $1,724NPV $2.07PLX-Orthopedic 1% 30% 7 0% $100 $345NPV $0.00PLX-RA 1% 30% 7 0% $100 $345NPV $0.00PLX-Inflammatory Bowel Disease 1% 30% 7 0% $100 $345NPV $0.00PLX-Stroke 1% 30% 7 0% $100 $345NPV $0.00PLX-BMT / GvHS /ARS 1% 30% 7 50% $100 $345NPV $0.19PLX-Multiple Sclerosis 1% 30% 9 0% $100 $345NPV $0.00Grants 2% 30% 0 100% $2 $7NPV $0.05Net Margin 30%MM Shrs OS 44Total $2Net Cash/Shr $0.88Grand Total $3.19Source: Maxim estimatesExhibit 26. Comparable Companies vs. PSTI Market Cap Cash ($MM) Enterprise R&D ($MM)Com pany Nam e Ticker Share Price ($MM) Q1-2012 Value ($MM) Q2-2010Athersys ATHX $1.57 $46 $10 $36Aastrom ASTM $1.97 $76 $27 $49Advanced Cell Technology ACTC $0.08 $166 $10 $156Bioheart BHRT $0.03 $4 $0 $4CytoMedix CMXI $1.35 $98 $8 $90Cytori Therapeutics CYTX $2.64 $144 $35 $109Geron GERN $1.65 $220 $10 $210Mesoblast MBLTY-5 $30.64 $1,743 $240 $1,503Neostem NBS $0.66 $91 $5 $91Neuralstem CUR $0.94 $49 $5 $44Opexa OPXA $0.75 $16 $5 $11Osiris Therapeutics OSIR $9.49 $320 $42 $278Pluristem Therapeutics, Inc. PSTI $3.20 $157 $38 $119Stem Cells STEM $1.40 $39 $11 $28Average (s) $4.03 $226 $32 $195Pluristem Therapeutics, Inc. PSTI $3.20 $157 $38 $119Share price as of 7.19.2012 Source: Maxim and Thomson ReutersThe competitive landscape. For the most part, the regenerative medicine side of the stem cellspace is a micro-capitalized group of companies with early-stage products. Overall, the space isundercapitalized, with a few noted exceptions: This includes Australian stem cell companyMesoblast, with $240 million on the balance sheet and multiple late-stage programs. Most of thecompanies on this list have Phase I programs or are just beginning Phase II. The noted exceptionsinclude Aastrom (now in Phase III), Osiris (failed prior Phase III trials in GvHD and currently ina Phase III trial in Crohn’s disease), Mesoblast (about to begin Phase III trials in cardiacindications), and Baxter (BAX, $54.96, NR), also in a Phase III cell therapy trial for angina, orheart pain.Maxim Group LLC 19
  • Pluristem Therapeutics, Inc. (PSTI)Mesoblast is highly valued versus the pack, likely a result of the Cephalon partnership deal. Notethat Cephalon has since been acquired by Teva Pharmaceuticals (TEVA, $40.49, NR). In 2010,Cephalon executed a partnership with Mesoblast, in which the company received $130 millionfrom Cephalon for certain therapy rights. In addition, Cephalon agreed to pay for all the clinicaltrials while Mesoblast retains the rights to manufacturing commercial supplies of the stem-cellproducts to be marketed by Cephalon.Osiris has a partnership with Genzyme, which has been acquired by Sanofi-Aventis. Under theterms of the original agreement, Genzyme made a $130 million up-front payment (two insequence). Osiris also had the potential to receive a total of up to $1.25 billion in milestonepayments from Genzyme. The status of the partnership is currently in dispute.We believe the stem cell space holds great potential and is highly undervalued, and that we couldsee valuations rise as some of the companies commercialize products over the next few years. Webelieve Pluristem could be one of the leaders. FUNDAMENTAL RISKSData risk. The outcome of current clinical trials in critical limb ischemia and other indicationscould fail to demonstrate efficacy or could show a safety (toxicity) risk, halting clinicaldevelopment.Developmental risk. Successfully managing multiple clinical trials is a risk. Trials can takelonger than expected to enroll. Trial costs often exceed budgets. Standards of care can change,rendering a great trial design obsolete.Regulatory risk. Pluristem must be able to obtain the approval of the FDA and other externalbodies (EMA) before commercial sales of the product candidates commence in the United States.Solid trial results are critical, but so is proper filing and interaction with the regulatory agenciessuch as the FDA, EMA, or Koseisho (Japan).Commercial risk. Pluristem has no commercial infrastructure and will need to develop one orpartner prior to commercialization.Competitive landscape. Pluristem is not alone its current indications in critical limb ischemia orPAD.IP risk. Pluristem has a strong patent portfolio but still faces many challenges from a wide rangeof competitors.Financing risk. Pluristem is not yet a profitable company. As such, it will need to raiseadditional capital or partner to complete clinical trials and commercialize its product portfolio.Maxim Group LLC 20
  • Pluristem Therapeutics, Inc. (PSTI) Pluristem Therapeutics Income Statements (In thousands, except per share data)Pluristem Income Statement ($ 000) June 2009 June 2010 June 2011 Sept 2011 Dec 2011 March 2012 June 2012 June 2012 Sept 2013 Dec 2013 March 2014 June 2014 June 2014 June 2015 June 2016 Sept 2016 Dec 2016 March 2017 June 2017 June 2017 Sept 2017 Dec 2017 March 2018 June 2018 June 2018 Sept 2018 Dec 2018 March 2019 June 2019 June 2019PSTI: YEAR June 30 2009A 2010A 2011A 1Q12A 2Q12A 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E 2014E 2015E 1Q16E 2Q16E 3Q16E 4Q16E 2016E 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018EProduct Revenue ($ Thousands)PLX-CLI / IC / Buergers Disease PLX-CLI: Phase 2/3 - - - 9,940 19,948 29,888 30,023 40,164 50,371 60,643 181,200 70,979 81,380 91,843 102,370 346,572 % ChgPLX-Orthopedic PLX-Orthopedic: Phase 1/2 Phase 3 % ChgPLX-RA PLX-RA P 1/2 % ChgPLX-Inflammatory Bowel Disease Phase 2 % ChgPLX-Stroke Phase 2 % ChgPLX-BMT / GvHS /ARS Phase 2 % ChgPLX-Multiple Sclerosis Phase 2 % ChgTotal Revenues (Product Sales, Grants & Milestones) 154 231 385 - - - - 9,940 19,948 29,888 30,023 40,164 50,371 60,643 181,200 70,979 81,380 91,843 102,370 346,572 % ChgExpenses PLX-PAD COGS - - - 1,988 3,990 5,978 6,005 8,033 10,074 12,129 36,240 14,196 16,276 18,369 20,474 69,314 COGS % Product Sales 0 20% 20% 20% 20% 0 20% 20% 20% 20% 0 20% 20% 20% 20% 20%COGS (net) - - - - - - - - - - - - - - - - - 1,988 3,990 5,978 6,005 8,033 10,074 12,129 36,240 14,196 16,276 18,369 20,474 69,314 PLX-PAD R&D R&D % Revs PLX-Orthopedic R&D R&D % Revs PLX-Neuropathic & Inflammatory pain R&D R&D % Revs PLX-Inflammatory Bowel Disease R&D R&D % Revs PLX-Stroke R&D R&D % Revs PLX-Bone Marrow Transplantation R&D R&D % Revs PLX-Multiple Sclerosis R&D R&D % RevsTotal Research & Development Expenses 4,792 6,123 Less participation by Office of the Chief Scientist (1,651) (1,822)R&D (net) 3,141 4,301 6,629 2,849 1,074 2,486 2,486 9,944 3,480 3,480 3,480 3,480 13,921 14,617 15,348 4,029 4,029 4,029 4,029 16,115 4,230 4,230 4,230 4,230 16,921 4,442 4,442 4,442 4,442 17,767 PLX-PAD SG&A - - - 1,690 3,391 5,081 5,104 6,828 8,563 10,309 30,804 12,066 13,835 15,613 17,403 58,917 SG&A % Revs 0 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% 17% PLX-Orthopedic SG&A SG&A % Revs PLX-Neuropathic & Inflammatory pain SG&A SG&A % Revs PLX-Inflammatory Bowel Disease SG&A SG&A % Revs PLX-Stroke SG&A SG&A % Revs PLX-Bone Marrow Transplantation SG&A SG&A % Revs PLX-Multiple Sclerosis SG&A SG&A % RevsSG&A (net) 3,417 3,138 4,485 1,637 1,275 1,132 1,132 4,530 1,144 1,144 1,144 1,144 4,575 4,621 - - - 1,690 3,391 5,081 5,104 6,828 8,563 10,309 30,804 12,066 13,835 15,613 17,403 58,917Stk Optns 2,239 1,832 1,992 508 508 508 508 2,032 518 518 518 518 2,072 2,114 2,156 550 550 550 550 2,199 561 561 561 561 2,243 572 572 572 572 2,288Non-GAAP, Adj. 2,239 1,832 1,992 508 508 508 508 2,032 518 518 518 518 2,072 2,114 2,156 550 550 550 550 2,199 561 561 561 561 2,243 572 572 572 572 2,288Total costs & expenses 6,558 7,439 11,114 4,486 2,349 3,618 3,618 14,473 4,624 4,624 4,624 4,624 18,496 19,238 15,348 4,029 4,029 7,707 11,409 27,174 15,339 19,091 22,867 26,668 83,965 30,704 34,552 38,424 42,319 145,999Operating Income (Loss) EBIT (6,558) (7,439) (11,114) (4,332) (2,118) (3,618) (3,618) (14,088) (4,624) (4,624) (4,624) (4,624) (18,496) (19,238) (15,348) (4,029) (4,029) 2,233 8,538 2,714 14,684 21,073 27,503 33,975 97,235 40,275 46,828 53,420 60,051 200,574 Oper MarginOther Income expenses - Financial Expenses (net) 78 14 (266) (161) 126 (26) (31) (31) (34) (38) (42) (45) (45) (60) 3 32 60 88 117 117 156 195 234 272 272 156 195 234 272 272Pre-tax income (6,636) (7,453) (10,848) (4,493) (1,992) (3,593) (3,588) (14,058) (4,590) (4,586) (4,582) (4,579) (18,451) (19,178) (15,351) (4,060) (4,089) 2,145 8,422 2,597 14,527 20,878 27,269 33,703 96,963 40,119 46,632 53,185 59,780 200,302Taxes (1,603) (528) (532) 300 1,179 420 2,905 4,593 6,272 8,426 22,196 10,030 12,124 13,828 16,140 52,123Tax Rate 10% 13% 13% 14% 14% 16% 20% 22% 23% 25% 23% 25% 26% 26% 27% 26%Net Income (loss) (6,636) (7,453) (10,848) (4,493) (1,992) (3,593) (3,588) (14,058) (4,590) (4,586) (4,582) (4,579) (18,451) (19,178) (13,748) (3,533) (3,557) 1,845 7,243 2,178 11,622 16,284 20,997 25,277 74,767 30,089 34,508 39,357 43,639 148,179Net MarginBasic EPS (0.63) (0.44) (0.35) (0.11) (0.05) (0.08) (0.08) (0.31) (0.10) (0.10) (0.10) (0.10) (0.42) (0.43) (0.31) (0.08) (0.08) 0.04 0.16 0.04 0.26 0.37 0.47 0.57 1.66 0.67 0.77 0.88 0.97 3.30Basic Wght Average Shares Outstanding (thousands) 10,603 17,005 31,199 42,779 43,669 43,713 43,757 43,480 43,801 43,844 43,888 43,932 43,866 44,042 44,219 44,329 44,373 44,418 44,462 44,396 44,507 44,551 44,596 44,640 44,574 44,685 44,730 44,774 44,819 44,752Fully Diluted Wgtd Avg Shrs outstanding (Thousands) 10,603 17,005 31,199 42,779 43,669 43,713 43,757 43,480 43,801 43,844 43,888 43,932 43,866 44,042 44,219 44,329 44,373 44,418 44,462 44,396 44,507 44,551 44,596 44,640 44,574 44,685 44,730 44,774 44,819 44,752Fully Diluted EPSSource: Company Reports and MaximSource: Company reports and Maxim Group LLC estimates.Jason Kolbertjkolbert@maximgrp.comMaxim Group LLC 21
  • Pluristem Therapeutics, Inc. (PSTI) Pluristem Therapeutics Statements of Cash Flow (In thousands, except per share data) June 2009 June 2010 Sept 2010 Dec 2010 March 2011 June 2011 June 2011 Sept 2011 Dec 2011 March 2012 June 2012 June 2012 Sept 2013 Dec 2013 March 2014 June 2014 June 2014 Sept 2014 Dec 2014 March 2015 June 2015 June 2015 Sept 2015 Dec 2015 March 2016 June 2016 June 2016 Sept 2016 Dec 2016 March 2017 June 2017 June 2017 Sept 2017 Dec 2017 March 2018 June 2018 June 2018 Sept 2018 Dec 2018 March 2019 June 2019 June 2018Pluristem (PSTI) Cash Flow Statement (000) 2009A 2010A 1Q11A 2Q11A 3Q11A 4Q11A 2011A 1Q12A 2Q12A 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E 1Q14E 2Q14E 3Q14E 4Q14E 2014E 1Q15E 2Q15E 3Q15E 4Q15E 2015E 1Q16E 2Q16E 3Q16E 4Q16E 2016E 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018ECash flows from operating activities:Net income (loss) (6,636) (7,453) (1,689) (4,510) (7,123) (10,848) (10,848) (4,493) (6,485) (10,078) (13,665) (13,665) (4,590) (9,176) (13,758) (18,337) (18,337) (4,761) (9,517) (14,271) (19,020) (19,020) (3,414) (6,841) (10,283) (13,663) (13,663) (3,533) (7,090) (5,245) 1,997 1,997 11,622 27,906 48,904 74,181 74,181 30,089 64,597 103,954 147,593 147,593Adjustments to reconcile net loss to net cash (operating activities):Depreciation 173 207 70 144 224 312 312 97 199 296 393 393 108 216 324 432 432 119 238 357 476 476 131 262 392 523 523 144 288 432 575 575 158 316 475 633 633 174 348 522 696 696Capital Loss 8 8 8 8 8 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Impairment of property & equipment 5 2 11 11Amortization of deferred issuance costs - Stock-based compensation: employees & directors 1,957 1,568 374 - - - - Stock-based compensation: non-employees consultants 149 201 88 219 381 3,325 3,325 Stock-based compensation: service providers & IR consultants 133 63 36 78 155 155 155Stock-based compensation, net 2,239 1,832 498 1,245 1,955 - 1,041 1,904 2,412 2,920 2,920 518 1,036 1,554 2,072 2,072 528 1,057 1,585 2,114 2,114 539 1,078 1,617 2,156 2,156 550 1,100 1,649 2,199 2,199 561 1,122 1,682 2,243 2,243 572 1,144 1,716 2,288 2,288Decrease (increase) in other Accounts Receivable (247) (307) 425 317 265 - -1,960 -1,960 (1,960) (1,960)Decrease (increase) in prepaid expenses 250 59 (39) (15) (172) (273) (273) (20) 97 97 97 97Increase (decrease) in trades payables (54) 132 1 516 455 455 (87) (1) (1) (1) (1)Increase (decrease) in other accounts receivables 656 656 (76) 112 112 112 112Increase (decrease) in other accounts payable & accrued expenses (96) 120 33 254 156 375 375 205 - - -Increase (decrease) in interest receivable on short-term deposit (15) (4) 34 15 15 15Increase (decrease) in defurrred Revenues 4,846 4,615 4,615 4,615 4,615Increase (decrease) in advanced payment 2,000 1,926 1,926 1,926 1,926Increase (decrease) in acrrued interest due related parties 15 - - (74) (240) (240) (240) (240)Linkage differences and interest on long-term restricted lease deposit 1 (1) (3) (3) (4) (4) 19 27 27 27 27Change in Fair Value in Respect to WarrantsAmoritzation of discount & changes in accrd interest from marketable securities (3) 4 -33 -33 -33 (33)Loss from sale of invesments of available-for-sale marketable securities 75Impairment & realized loss on available-for-sale marketable securities -Accrued severance pay, net 32 14 10 -5 27 58 58 -1 13 13 13 13Net Cash Used in Operating Activities (4,262) (5,408) (688) (2,219) (3,596) (5,755) (5,755) 3,461 174 (2,814) (5,796) (5,796) (3,963) (7,923) (11,880) (15,832) (15,832) (4,113) (8,223) (12,328) (16,431) (16,431) (2,744) (5,502) (8,274) (10,983) (10,983) (2,839) (5,703) (3,164) 4,772 4,772 12,341 29,345 51,061 77,057 77,057 30,835 66,089 106,192 150,577 150,577Cash flows from investing activities:Purchase of property & equipment (313) (389) (426) (560) (672) (962) (962) (179) (996) (996) (996) (996)Investment in short-term deposits (2,500) (31,599) (30,273) (30,273) (30,273) (30,273)Repayment of short-term restricted deposit 1,602 400 898 898 898 898Proceeds from sale of property & equipment - 28 28 28 29 29Investment in long-term deposits (8) (12) -12 -12 -14 (14) (690) (1,011) (1,011) (1,011) (1,011)Repayment of long-term restricted deposit 38 3 2 13 13 13 13 4 2 2 2 2Purchase of available for sale marketable securities - (516) 50 50 50 50Proceeds from sale of available for sale marketable securities 1,113 -4,503 -4,503 -4,503 (4,503)Net cash provided by investing activities 830 (1,296) 4 367 255 (36) (36) (32,980) (36,731) (36,731) (36,731) (36,731) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash flows from financing activities:Issuance of common stock & warrants, net of issance costs 5,462 5,954 252 5,015 43,400 43,400 43,400 323 400 501 607 607 117 241 370 506 506 150 308 474 649 649 193 395 608 831 831 247 506 779 1,065 1,065 316 649 998 1,365 1,365 405 831 1,279 1,749 1,749Exercise of warrants & options 2 17 3,248 3,661 3,661Receipts on account of shares -Receipt of long-term loan -Repayment of long-term loan (14) (8) (24) (24) (24) (24) (24) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Net cash provided by financing activities 5,448 5,948 228 5,008 46,624 47,037 47,037 323 400 501 607 607 117 241 370 506 506 150 308 474 649 649 193 395 608 831 831 247 506 779 1,065 1,065 316 649 998 1,365 1,365 405 831 1,279 1,749 1,749Net increase (decrease) in cash and cash equivalents 2,016 (756) (456) 3,156 43,283 41,246 41,246 (29,196) (36,157) (39,043) (41,920) (41,920) (3,846) (7,683) (11,509) (15,326) (15,326) (3,963) (7,914) (11,854) (15,782) (15,782) (2,551) (5,107) (7,666) (10,152) (10,152) (2,592) (5,197) (2,386) 5,837 5,837 12,657 29,993 52,059 78,422 78,422 31,240 66,920 107,471 152,326 152,326Cash and equivalents, beginning of period 323 2,339 1,583 1,583 1,583 1,583 1,583 42,829 42,829 42,829 42,829 42,829 909 909 909 909 909 (14,417) (14,417) (14,417) (14,417) (14,417) (30,199) (30,199) (30,199) (30,199) (30,199) (40,351) (40,351) (40,351) (40,351) (40,351) (34,514) (34,514) (34,514) (34,514) (34,514) 43,908 43,908 43,908 43,908 43,908Cash and equivalents, end of period 2,339 1,583 1,127 4,739 44,866 42,829 42,829 13,633 6,672 3,786 909 909 (2,937) (6,774) (10,600) (14,417) (14,417) (18,380) (22,331) (26,271) (30,199) (30,199) (32,750) (35,305) (37,865) (40,351) (40,351) (42,943) (45,547) (42,736) (34,514) (34,514) (21,856) (4,521) 17,545 43,908 43,908 75,149 110,828 151,379 196,235 196,235Source: Company reports and MaximSource: Company reports and Maxim Group LLC estimates.Maxim Group LLC 22
  • Pluristem Therapeutics, Inc. (PSTI) Pluristem Therapeutics Balance Sheet (In thousands, except per share data)Pluristem Balance Sheet ($ Thousands) June 2009 June 2010 Sept 2010 Dec 2010 March 2011 June 2011 June 2011 Sept 2011 Dec 2011 March 2012 June 2012 June 2012 Sept 2013 Dec 2013 March 2014 June 2014 June 2014 Sept 2014 Dec 2014 March 2015 June 2015 June 2015 Sept 2015 Dec 2015 March 2016 June 2016 June 2016 Sept 2016 Dec 2016 March 2017 June 2017 June 2017 June 2018 June 2019Assets: 2009A 2010A 1Q11A 2Q11A 3Q11A 4Q11A 2011A 1Q12A 2Q12A 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E 1Q14E 2Q14E 3Q14E 4Q14E 2014E 1Q15E 2Q15E 3Q15E 4Q15E 2015E 1Q16E 2Q16E 3Q16E 4Q16E 2016E 2017E 2018ECash and cash equivalents $2,339 $1,583 $1,127 $4,739 $44,866 $42,829 $42,829 $13,633 $6,672 $3,786 $909 $909 ($2,937) ($6,774) ($10,600) ($14,417) ($14,417) ($18,380) ($22,331) ($26,271) ($30,199) ($30,199) ($32,750) ($35,305) ($37,865) ($40,351) ($40,351) ($42,943) ($45,547) ($42,736) ($34,514) ($34,514) $43,908 $196,235 Short-term bank deposits 913 517 0 0 0 0 31,658 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 30,491 Marketable Securities 513 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 4,352 Prepaid Expenses and other current assets 100 41 80 56 213 314 314 334 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 217 Accounts recievable from the Office of the Chief Scientist 383 706 318 361 324 - - 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 1,845 Other Accounts Receivable 113 362 71 375 214 154 154 225 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266 266Total current assets $2,935 $3,605 $2,113 $5,531 $45,617 $43,297 $43,297 $46,363 $43,843 $40,957 $38,080 $38,080 $34,234 $30,397 $26,571 $22,754 $22,754 $18,791 $14,840 $10,900 $6,972 $6,972 $4,421 $1,866 ($694) ($3,180) ($3,180) ($5,772) ($8,376) ($5,565) $2,657 $2,657 $81,079 $233,406 Long-term deposits and restricted deposits 171 168 169 176 183 179 179 866 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 Severance pay fund 154 294 327 359 410 452 452 459 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 485 Property and Equipment, net 1,203 1,555 1,756 1,816 1,943 2,088 2,088 2,156 4,128 4,031 3,934 3,934 3,826 3,718 3,610 3,502 3,502 3,383 3,264 3,145 3,026 3,026 2,895 2,765 2,634 2,503 2,503 2,359 2,215 2,072 1,928 1,928 1,295 599Total assets $4,463 $5,622 $4,365 $7,882 $48,153 $46,016 $46,016 $49,844 $49,642 $46,659 $43,685 $43,685 $39,731 $35,786 $31,851 $27,927 $27,927 $23,845 $19,775 $15,716 $11,669 $11,669 $8,987 $6,301 $3,611 $994 $994 ($1,742) ($4,490) ($1,823) $6,256 $6,256 $84,045 $235,675Liabilities: Trade payables 487 791 673 926 1,283 1,177 1,177 1,076 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 1,174 Accrued Expenses 81 118 157 85 107 208 208 376 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 231 Deffured Revs , Advanced Payment Other accounts payable 272 372 400 468 515 633 633 3,593 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571Total current liabilities $840 $1,281 $1,230 $1,479 $1,905 $2,018 $2,018 $5,045 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 $4,976 Long-term obligation 23Deffured Revenues 3,923 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 3,692 Accrued severance pay 206 360 403 420 503 576 576 582 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622 622Total liabilities $1,069 $1,641 $1,633 $1,899 $2,408 $2,594 $2,594 $9,550 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290 $9,290Stockholders equity:Common Stock $0.00001 ParAdditional Paid In Capital 36,046 44,086 44,526 50,598 92,973 94,375 94,375 95,739 97,924 98,025 98,131 98,131 98,249 98,372 98,501 98,638 98,638 98,788 98,946 99,112 99,286 99,286 99,479 99,681 99,894 100,118 100,118 100,364 100,624 100,896 101,183 101,183 102,548 104,297Deficit accumulated during the development stage (32,652) (40,105) (41,794) (44,615) (47,228) (50,953) (50,953) (55,446) (57,572) (60,657) (63,736) (63,736) (67,808) (71,876) (75,940) (80,001) (80,001) (84,233) (88,461) (92,686) (96,907) (96,907) (99,781) (102,670) (105,573) (108,413) (108,413) (111,396) (114,404) (112,009) (104,217) (104,217) (27,793) 122,089Total Equity 3,394 3,981 2,732 5,983 45,745 43,422 43,422 40,293 40,352 37,369 34,395 34,395 30,441 26,496 22,561 18,637 18,637 14,555 10,485 6,426 2,379 2,379 (303) (2,989) (5,679) (8,296) (8,296) (11,032) (13,780) (11,113) (3,034) (3,034) 74,755 226,385Total Liabilities & Equity $4,463 $5,622 $4,365 $7,882 $48,153 $46,016 $46,016 $49,843 $49,642 $46,659 $43,685 $43,685 $39,731 $35,786 $31,851 $27,927 $27,927 $23,845 $19,775 $15,716 $11,669 $11,669 $8,987 $6,301 $3,611 $994 $994 ($1,742) ($4,490) ($1,823) $6,256 $6,256 $84,045 $235,675Shares Issued (Thousands) 14,739 21,459 21,012 24,897 36,677 42,443 42,443 42,779 43,669 43,713 43,757 43,757 43,801 43,844 43,888 43,932 43,932 43,976 44,020 44,064 44,108 44,108 44,152 44,196 44,241 44,285 44,285 44,329 44,373 44,418 44,462 44,462 44,640 44,819Shares Out (Thousands) 13,677 20,889 21,170 24,897 36,677 42,443 42,443 42,779 43,669 43,713 43,757 43,757 43,801 43,844 43,888 43,932 43,932 43,976 44,020 44,064 44,108 44,108 44,152 44,196 44,241 44,285 44,285 44,329 44,373 44,418 44,462 44,462 44,640 44,819Treasury StockCommon AuthzdSource: Company reports and MaximSource: Company reports and Maxim Group LLC estimates.Maxim Group LLC 23
  • Pluristem Therapeutics, Inc. (PSTI) DISCLOSURES Maxim Group LLC Stock Rating System As of: 7/24/2012 % of Coverage % of Ratings Universe for which Firm provided Expected Performance* with Rating Banking Services in the last 12 months Buy Expected total return of 15% or more over next 12 months 70.6% 13.5% Hold Expected total return of plus or minus 14% over next 12 months 20.6% 3.6% Sell Expected total negative return of at least 15% over next 12 months 8.1% 0.0% * Relative to Nasdaq Composite. An Under Review (UR) rating represents a stock that the Firm has temporarily placed under review due to a material change. Maxim Group makes a market in Pluristem Therapeutics, Inc. and Aastrom BioSciences, Maxim Group expects to receive or intends to seek compensation for investment banking services from the subject company in the next 3 months. In addition Maxim Group expects to receive or intends to seek compensation for investment banking services from Athersys Corporation, Aastrom Biosciences and Mesoblast Limited in the next 3 months.I, Jason Kolbert, attest that the views expressed in this research report accurately reflect my personal viewsabout the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly orindirectly related to the specific recommendation or views expressed in this research report.The research analyst(s) primarily responsible for the preparation of this research report have receivedcompensation based upon various factors, including the firm’s total revenues, a portion of which is generatedby investment banking activities.Valuation Methods: We provide detailed market models and assumptions around PluristemTherapeutics. We provide three valuation metrics – FCF, discounted EPS, and sum of the parts – and modelPSTI out to 2018. We only assume success in CLI and have not included milestone or deal revenues relatedto United Therapeutics or other new partners. This derives a 2018 EPS number of $3.30, which we discountat 30% (large) and equally weight the three metrics to derive a $8.00 price target.Price target and investment risks: Aside from general market and other economic risks, risks particular toour price target and rating for Pluristem Therapeutics include: 1) The regulatory and clinical riskassociated with pivotal trials in CLI and other indications the company is pursuing; 2) the rate and degree ofprogress of product development; 3) the rate of regulatory approval to proceed with clinical trial programs;4) the level of success achieved in clinical trials; 5) the requirements for marketing authorization fromregulatory bodies in the United States and other countries; 6) the liquidity and market volatility ofPluristem’s equity securities; 7) regulatory and manufacturing requirements and uncertainties; 8)technological developments by competitors; and 9) the financials (capital structure) of the company.Maxim Group LLC 24
  • Pluristem Therapeutics, Inc. (PSTI) RISK RATINGSRisk ratings take into account both fundamental criteria and price volatility.Speculative –Fundamental Criteria: This is a risk rating assigned to early-stage companies with minimal to no revenues,lack of earnings, balance sheet concerns, and/or a short operating history. Accordingly, fundamental risk isexpected to be significantly above the industry.Price Volatility: Because of the inherent fundamental criteria of the companies falling within this riskcategory, the price volatility is expected to be significant with the possibility that the investment couldeventually be worthless.Speculative stocks may not be suitable for a significant class of individual investors.High –Fundamental Criteria: This is a risk rating assigned to companies having below-average revenue andearnings visibility, negative cash flow, and low market cap or public float. Accordingly, fundamental risk isexpected to be above the industry.Price volatility: The price volatility of companies falling within this category is expected to be above theindustry.High-risk stocks may not be suitable for a significant class of individual investors.Medium –Fundamental Criteria: This is a risk rating assigned to companies that may have average revenue andearnings visibility, positive cash flow, and is fairly liquid.Accordingly, both price volatility and fundamental risk are expected to approximate the industry average.Low –Fundamental Criteria: This is a risk rating assigned to companies that may have above-average revenue andearnings visibility, positive cash flow, and is fairly liquid.Accordingly, both price volatility and fundamental risk are expected to be below the industry.Maxim Group LLC 25
  • Pluristem Therapeutics, Inc. (PSTI) DISCLAIMERSSome companies that Maxim Group LLC follows are emerging growth companies whose securities typicallyinvolve a higher degree of risk and more volatility than the securities of more established companies. Thesecurities discussed in Maxim Group LLC research reports may not be suitable for some investors. Investorsmust make their own determination as to the appropriateness of an investment in any securities referred toherein, based on their specific investment objectives, financial status and risk tolerance.This communication is neither an offer to sell nor a solicitation of an offer to buy any securities mentionedherein. This publication is confidential for the information of the addressee only and may not be reproducedin whole or in part, copies circulated, or disclosed to another party, without the prior written consent ofMaxim Group, LLC (“Maxim”).Information and opinions presented in this report have been obtained or derived from sources believed byMaxim to be reliable, but Maxim makes no representation as to their accuracy or completeness. Theaforementioned sentence does not apply to the disclosures required by NASD Rule 2711. Maxim accepts noliability for loss arising from the use of the material presented in this report, except that this exclusion ofliability does not apply to the extent that such liability arises under specific statutes or regulations applicableto Maxim. This report is not to be relied upon in substitution for the exercise of independent judgment.Maxim may have issued, and may in the future issue, other reports that are inconsistent with, and reachdifferent conclusions from, the information presented in this report. Those reports reflect the differentassumptions, views and analytical methods of the analysts who prepared them and Maxim is under noobligation to ensure that such other reports are brought to the attention of any recipient of this report.Past performance should not be taken as an indication or guarantee of future performance, and norepresentation or warranty, express or implied, is made regarding future performance. Information, opinionsand estimates contained in this report reflect a judgment at its original date of publication by Maxim and aresubject to change without notice. The price, value of and income from any of the securities mentioned in thisreport can fall as well as rise. The value of securities is subject to exchange rate fluctuation that may have apositive or adverse effect on the price or income of such securities. Investors in securities such as ADRs, thevalues of which are influenced by currency volatility, effectively assume this risk. Securities recommended,offered or sold by Maxim: (1) are not insured by the Federal Deposit Insurance Company; (2) are notdeposits or other obligations of any insured depository institution; and 3) are subject to investment risks,including the possible loss of principal invested. Indeed, in the case of some investments, the potential lossesmay exceed the amount of initial investment and, in such circumstances, you may be required to pay moremoney to support these losses. ADDITIONAL INFORMATION IS AVAILABLE UPON REQUESTMaxim Group LLC 26
  • EQUITY RESEARCH DEPARTMENT CAPITAL MARKETS / SYNDICATE Anthony Vendetti Christopher Fiore 212-895-3743 Director of Research 212-895-3802 President & Head of Capital Markets AEROSPACE & AIRLINES Paul LaRosa 212-895-3695 Ray Neidl 212-895-3571 Senior Managing Director - Chief Market Technician Andrew Rosen 212-895-3685 CHINA Director Echo Yinghui He Ph.D., M.D. 212-895-3718 INSTITUTIONAL SALES & INSTITUTIONAL SALES TRADING CLEANTECH Aaron Chew 212-895-3568 Jamie Barker 212-895-3755 Managing Director - Institutional Equity Sales & Sales Trading FINANCIAL SERVICES / REITS Michael K. Diana 212-895-3641 INSTITUTIONAL SALES 800-628-4005 HEALTHCARE Eric Brous 212-895-3635 Healthcare IT, Services & Medical Devices Ian Burgess 212-895-3548 Anthony Vendetti 212-895-3802 Ken Epstein 212-895-3872 Michael Fenton 212-895-3698 Healthcare & Life Sciences William Haynsworth 212-895-3639 Bryan Brokmeier, CFA 212-895-3845 Seitaro Kuno 212-895-3880 Lisa Magoun 212-895-3726 Biotechnology Tim Manning 212-895-3527 Jason Kolbert 212-895-3516 David Markel 212-895-3534 Erik Moquist 561-465-2496 Biotechnology Anthony Musto 212-895-3824 Echo He Ph.D., M.D. 212-895-3718 Gene Napolitano 212-895-3827 Amanda Nozaki 212-895-3570 INDUSTRIALS & INFRASTRUCTURE Jason Sardo 212-895-3630 William D. Bremer 212-895-3835 Jeff Sklar 212-895-3780 Dirk van Erp 925-954-1194 TELECOM / MEDIA / TECHNOLOGY Communications Infrastructure INSTITUTIONAL SALES TRADING 800-628-4005 Greg Mesniaeff 212-895-3533 Todd Bodine 212 895-3806 Media Phil Buchanan 212-895-3746 John Tinker 212-895-3735 Robert Benedickson 732-784-1903 George Brown 212-895-3757 Technology Adam Cheek 212-895-3878 Ashok Kumar, CFA 650-823-4745 Jon Huzarsky 212-895-3629 Peter Kaufman 561-465-2493 Research Associates Josh Levy 212-895-3897 Benjamin Black 212-895-3509 Rich Levy 212-895-3820 Francesco Citro, Ph.D. 212-895-3809 Mitch Martin 212-895-3831 Nirav Modi 212-895-3595 Mike Massimino 212-895-3544 Victor Zajdel 212-895-3814 Joseph Matura 212-895-3892 Michael Pizzo 213 895-3643 Research Editor/Assistant Eugene Polt 732-784-1906 Nikki Reed 212-895-3736 Alex Povalski 732-784-1904 Alessandro Profita 212-895-3795 Richard Reda 212-895-3849 Hany Sabet 650 587 8585 Clint Schoen 212-895-3893 Ed Shopkorn 212-895-3601 Brian Schroetter 732-784-1918 Kevin Schweitzer 516-396-3012 Gary Tritto 212-895-3842 Richard Vaughn 212-895-3676 Cass Waller 212-895-3740 Reed Werbit 212-895-3634 Energy Sector Specialist Eliecer Palacios 212-895-3608 Retail Sector Specialist Rick Snyder 212-895-3674 FIXED INCOME TRADING EQUITY TRADING Jamie Terranova 212-895-3875 Bill Vitale 732-784-1905 Jon Good 212 895 3607 Keith Arner 212-895-3891 Jon Kattouf 212-895-3573 Ricardo Barquero 212-895-3781 Justin Rabinowitz 212-895-3839 Ralph Calabro 212-895-3586 Anthony Marciano 212-895-3613 William Doyle 212-895-3724 Frantisek Kovac 212-895-3606 Robert Lynch 732-784-1910 Joseph Matura 212-895-3892 Jared Rabinowitz 212 895 3729 Robert Sayegh 212-895-3680 GLOBAL EQUITY TRADING John Viteritti 212-895-3541 Bryan Chalk 804-441-6106 Charles Ferrera 212-895-3770 Tom Giordano 212 895-3837 INSTITUTIONAL OPTIONS TRADING Peter Murgolo 212-895-3612 John Palmieri 732-784-1929 Leonard Greenbaum 212-895-3791 Eric Skibo 212-895-3776 Jackson Platsky 212-895-3561 Chris Valvo 732-784-1916 Rory Gourlay 732-784-1936 WEALTH MANAGEMENT PRIME BROKERAGE John Garrity Kristi Marvin 212-895-3769 Executive Managing Director 212-895-3624 CORPORATE FINANCE Clifford A. Teller Director of Investment Banking 212-895-3773Maxim Group LLC 405 Lexington Avenue New York, NY 10174 – www.maximgrp.com