UBS Analyst Misses Boat With Protalix Comments

By Patrick Crutcher

Certainly Protalix BioTherapeutics (NYSEMKT:PLX) is on‎ everyone’s radar with a FDA decision coming on February 25th. We wanted to highlight a recent analyst's note on their upcoming decision.

As we have said before, their data is clean and very comparable to Cerezyme’s available data; their BLA for UPLYSO will very likely receive FDA approval. Additionally, they are awaiting approval in Israel, the EU, and Brazil, with additional filings to come for other territories. We have attached a link to their recent January corporate presentation that overviews the data. In that presentation, they also gave more details on the potential for a long-term supply agreement with the Brazilian government.

More recently, they have been at the center of an analyst tug of war. First, UBS downgrades them to neutral with a $10 price target, then the next day Cannacord Genuity reiterates their buy rating with a $14 price target. We think UBS’s analyst missed the boat here with his comments regarding the labeling. Nothing in the safety data we have seen would suggest the kind of black-box label they are suggesting. Actually, they report only 6% IgC antibodies detected, versus 15% with Cerezyme and 10% with Vpriv. Their 6% hypersensitivity is quite comparable to the labeled 6.8% for Cerezyme.

Cannacord’s Ritu Baral had this to say, "We think PLX/partner Pfizer’s (NYSE:PFE) taliglucerase (tali) for Gaucher’s will get FDA approval on its Feb. 25 PDUFA date. Q1/11 pivotal extension and full switch study data may be key catalysts. We expect a strong US launch in Q2/11 driven by EAP patients and Phase 3b data. We think tali will capture ~15%+ of the $1.2B+ Gaucher’s market, taking Cerezyme market share through strong marketing. We think tali’s safety profile continues to be positive and do not expect black box or special safety language on approval. We continue to believe taliglucerase hypersensitivity rates in clinical trials remain around 6% and that rates of true severe anaphylactoid reactions are much lower. We think safety on the approved label will read very similar to Cerezyme and Vpriv."

Keep in mind that Protalix will be presenting data from the switchover trial of UPLYSO (taliglucerase alfa) in patients with Gaucher disease and preclinical data on the oral enzyme glucocerebrosidase (GCD) at the 7th Annual Meeting of the Lysosomal Disease Network: WORLD Symposium 2011 being held on February 16-18, 2011. Many are very interested in their developments on an oral GCD for Gauchers, since current patients must receive treatment intravenously. They recently spoke very positively about this program at a recent company sponsored medical meeting. The switchover trial data will be important for encouraging doctors and patients to switch to UPLYSO. The huge economic advantage that UPLYSO offers over Cerezyme will be an important factor in sales, especially with healthcare costs on everyone's mind.

More importantly, approval of UPLYSO would validate their plant-cell based technology, becoming the first FDA approved BLA for recombinant therapeutic proteins using a plant-cell based expression system. This technology (ProCellEx) allows for the expression of recombinant proteins that are cost-effective, easily scalable and lack the manufacturing pitfalls of current mammalian-cell based platforms. Their foray into biodefense applications (PRX-105), PRX-102 (Fabry) and rheumatoid arthritis (PRX-106, biosimilar to Enbrel), all become much more interesting programs with an approval under their belt. Approval of UPLYSO would be validation of their technology and make their platform extremely attractive for developing biologic drugs at a fraction of the cost.

Long PLX