Pluristem Therapeutics (PSTI) develops stem cell medicine. Considering the broad market for Pluristem's potential applications, the stock is inexpensive, and this reflects the market's understandable skepticism towards treatments pending regulatory approval. But investors should put aside their concerns for a moment, and see the big-picture upside, as the Israeli Office of the Chief Scientist has seen upside, awarding consistent multimillion-dollar grants to finance research and development for the past 6 years.

CEO Zami Aberman recently explained how Pluristem is flexible. I think this flexibility overrides uncertainty in Pluristem's inherent expected value. When you are one of the few possible solution providers for tens of billions of dollars of problems, this outweighs the consideration of a few tens of millions to develop your solutions.

Pluristem is flexible because:

• the source of cells (placenta) is non-controversial (unlike embryo)
• the mechanism of action empowers the body to heal itself (passive engineering)
• it offers treatments that can be applied "off-the-shelf" (modular design)
• its intellectual property spans multiple categories of disease and is reliably defensible, even within biotech's changing legal framework

The last bullet point references a Wall Street Journal article reporting on a tightening of allocations for patents. The United States Supreme Court overturned a lower court decision, which upheld intellectual property rights for a "law of nature" combined with an unremarkable application. The precedent maintained by this case is the requirement that intellectual property has an "inventive concept" that applies a law of nature in a "nonobvious" way.

Biotech's bubble has been burst before by intellectual property. There is a humanitarian negotiation of incentivizing development of new ideas versus, allowing the market to price lower through competition. In response to ROI squeezes on intellectual property, generic companies overseas have started to develop original drugs, and original drug companies are developing generics. Everyone's trying to work out a business model. Personalized medicine, in particular, is shaken by this recent Supreme Court case, which deals with diagnostics. But it speaks to the broader problem of intellectual property and how first-mover companies can monetize to justify the risk of years of research and development.

Fortunately for Pluristem, the company is moves ahead. With "flexibility" as a keyword, Pluristem is a counter-story to the hyperpersonalization of other companies. The intellectual property has been strategically positioned from the beginning, as the treatments have centrally incorporated a novel manufacturing process. Not only is this process entirely enforceable as intellectual property for the foreseeable future, not only has Pluristem scaled up to become a manufacturer of this technology - it is also incredibly versatile. Illustrative of this wide potential for Pluristem's IP is that Pluristem's method has been demonstrated to treat Crohn's, which is the disease coincidentally involved in the recent Supreme Court case.

Critical Limb Ischemia troubles 20 million patients in the United States, and Pluristem is moving towards a Phase II/III study for its application. This is the first of several applications that excite Ray Dirks, who has been a respected analyst on Wall Street for decades. Oddly enough, Pluristem may one day protect humans from radiation, and I have written about another "passive engineering" Israeli invention along these lines.

Let me throw a last example of Pluristem's versatility at you, Peripheral Artery Disease, which Decision Resources recently found Pluristem had an advantage in. The point is, there is real potential in a wide array of applications, and the market is being overly cautious in pricing Pluristem shares.

Disclosure: I am long PSTI.