A biotechnology company has come under fire after reporting the success of its 'life-saving' stem cell based therapies ahead of a major stock sale, which occurred before investors became aware of news that a patient who had received its treatment had died.
Two out of the three patients referred to in the relevant company press releases have now died, although no link between the deaths and the treatment has been suggested. The patients, affected by bone marrow disease, cancer and leukaemia, had exhausted all other treatment options and were at risk of 'imminent death', the company has emphasised.
Pluristem Therapeutics, an Israel-based stem cell company, had seen its stocks rise dramatically between May and September this year on the back of announcements that three patient's lives had been saved by its experimental stem cell therapies. A doctor who treated one of the patients called it a 'medical miracle'.
On 19 September, Pluristem completed a shares sale that generated $34 million for research expenses. However, it made no mention that one week before the sale one of the three patients – a seven-year-old girl with a bone marrow disease – had died. Subsequently, in a press release Pluristem announced that a second patient had died, although it is not clear when the death occurred.
In a statement, Pluristem denied that it knew of the girl's death at the time of the sale and that it withheld information from investors. 'The company did not learn of this fact until after the financing was completed', it said. The statement related that Pluristem was not monitoring the patient after she left hospital and that she had returned to her home country of Romania. Furthermore, it said there was 'no connection between the [stem cell treatment administered] and the death of the patient'.
The company has stood by its earlier announcements. Zami Aberman, Pluristem's chief executive officer, told Bloomberg News that because 'we saw significant improvement in the blood count, we declared a successful treatment'. The patients received treatment under the compassionate use programme, which allows experimental therapies to be used when no other treatment options are available. Pluristem said that the extended survival of the two patients that have subsequently died 'exceeded longevity expectations'. It added that, 'the unfortunate deaths of the patients do not diminish these results'.
It is not been suggested that Pluristem has breached any laws by its announcements or subsequent stock sale. John Nester, a spokesperson for the US Securities and Exchange Commission (SEC) told Bloomberg that the law requires companies 'to disclose information that a reasonable investor would consider important when deciding whether to buy, sell or hold a security'. It is not presently clear whether the SEC is investigating.
Most companies do not report on the results of compassionate treatments because of fears of raising false hope on the basis of a small number of cases. Christopher Bravery, an independent regulatory consultant told Bloomberg that such cases are 'purely anecdotal' and bear little statistical significance.
Pluristem said in its statement: 'Compassionate use cases are entirely experimental and last resort efforts in desperate situations and obviously not predictive of ultimate success or failure. Further, adverse results from causes unrelated to the subject therapy are also irrelevant in the evaluation of that therapy'.
Others have questioned the pitch of the initial sale. 'Such press releases risk misleading investors by creating overly optimistic account of scientific research', said Dr Leigh Turner, an associate professor at the University of Minnesota Centre for Bioethics. 'More importantly, press releases describing miracles and life-saving cures are harmful because they give seriously ill individuals an unrealistic account of effectiveness of experimental stem cell interventions'.
Pluristem's stem cell product, PLX cell treatment, is not currently approved for human use but has been involved in clinical trials. In the USA, unapproved treatments may be used for seriously ill patients where there is no treatment available.