Protalix Biotherapeutics: FDA Fast Track for Gaucher Treatment

Yesterday, August 25th, Protalix Biotherapeutics (PLX) announced they have received FDA fast track status for their Gaucher treatment called prGCD.

You may not know much about Protalix but they are an Israeli biopharma company which produces therapeutics from plant origins. Teva Pharmaceutical Industries Ltd. (TEVA) and Protalix Biotherapeutics Ltd. have a collaboration agreement for the development of two biopharmaceuticals, based on Protalix's recombinant plant cell expression technology.

After gaining nearly 30% on August 17th, Protalix is currently trading at 6.04 and was up only 1% yesterday on the news. This could be due to a few reasons.

1. Genzyme (GENZ) will eventually deal with the contamination and begin producing Cerezyme again within 6-8 weeks.
2. Shire Pharmaceuticals (SHPGY) has also been given FDA fast track status. (See Shire Gaucher Drug Passes Key Trial.)
3. Protalix had an astronomical stock meltdown in 2007 by having a public offering of only $5/share when shares were trading around $35-40. There was no valid reasoning behind the offering, according to Protalix's management in 2007

But the good news is that Cerezyme sales were 1.24 billion in 2008. Gaucher disease is more common in those with Jewish ancestry so being an Israeli company this could help future sales of Protalix's prGCD compound.

Currently, the disease is rare and affects around 1 in 50,000 to 100,000 people. The treatment must be taken on a life-long basis. See Marketwatch's August 18th article on this subject: Protalix's David vs. Genzyme's Goliath.

David Aviezer, the chief executive of Protalix, said in an interview on Tuesday that many doctors around the world have asked his company to supply them its medicine due to shortages of Cerezyme. "Plant cells cannot be affected by human or mammalian viruses, like incidents that happened with Genzyme," he said. "We have a built-in biological firewall protecting against such situations."

Aviezer said that recent actions by the FDA, in approving the compassionate-use protocol and granting prGCD fast-track status, suggest that the agency considers prGCD "a valid option."

We're confident in the way the drug is moving ahead, and are confident in our ability to compete with Cerezyme. We're building up our credibility.

Reuters announced on August 17th the Protalix update for the approved treatment protocol. Another update was announced on August 25th for the FDA's fast track status. Protalix Chief Executive David Aviezer says,

We expect to conclude our Phase III pivotal study next month and are looking forward to announcing top-line results from this study in October. We anticipate filing an NDA with the FDA by the end of this year.

Disclosure: Long Protalix

Comments

[thirstycamel:]

The big negatives weighing on this stock are:

1. Shire announced they will sell their drug for FREE.
2. Protalix agreed to sell their drug for FREE.
3. Genzyme has already started to make clean drug and unlesss the FDA delays the plant inspection; they will be supplying drug early next year.
4. Protalix will be cash constrained, unless they bring in a distribution partner.

It is inconceivable to think Genzyme will sit by and watch Shire and Protalix eat their lunch.Genzyme is a fierce competitor.

This will evolve into a three-way price war, where the starting price is zero.

I suspect Protalix will someday be a big winner, but not now.

Aug 26 09:16 AM

[BioPharma I...:]

All clinical trial products are offered free. It's an incentive to join the clinical trial. They won't be giving it away if approved. This is a multi-billion dollar market with room to grow. This freeby is another cost of the clinical trials. There are many reason why they are so expensive, including regulatory filings, clinical host sites, pay for the CRA's, Doctors, Nurses. Clinical trials aren't cheap. There are bioinformatics to analyze and some trials even pay their patients. They factor all of this into there costs up front.

On a side note, I do like Protalix's chances at breaking into the market and putting some heat on Genzyme. Shire is no slouch either. Patients and doctors remember when things go bad for companies when they can't offer their patients the meds they need. This medication is taken frequently for the rest of the patients' life. Keeping up with the clinical trial process is important when looking at the value of a stock.

Aug 26 01:07 PM

[BioPharma I...:]

It's a good time to buy Genzyme too as they have a nice pipeline and will quickly recover from this setback. I feel they are undervalued and will swing back to the 60-70 range soon.

Aug 26 01:22 PM

[M. E. Garza:]

Fantastic take on this company. I was recently contacted by their PR person, but I think you should be the one who presents this information to our readers at BioMedReports. I certainly invite you to do so.

Aug 27 08:24 AM