thirstycamel

Protalix Biotherapeutics: FDA Fast Track for Gaucher Treatment

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.

Why I'm Buying Protalix

Mr Cohen,

I was long 50,000 shares of PLX until a few weeks ago when I sold all of it. The reason for the sale was that Shire announced they would distribute their competing drug for free as long as there was a shortage of Cerezyme. The price of PLX topped out on that revelation. Since then, PLX has also agreed to distribute their drug for free for some period of time. At best, this is a questionable business model. PLX should have responded with the differentiation that Shire's drug did not shrink the liver as much as had been expected.

In addition to the above, GENZ is in late stage development (Phase III) of an oral small molecule that will compete directly with their own Cerezyme, and both Shire and Protalix candidates.

In your article you state that the PLX technology allows the production of drug from carrots and tobacco leaves. That is not quite correct. Their proteins are produce by direct expression from genetically modified carrot and tobacco cells. This differentiation may seem insignificant, but it is not. Protein production in actual plants failed years ago due to cost of extraction. The currnt PLX technology is light years ahead of past plant technology.

The costs of distributing free drug worries me, especially with the limited resources PLX currently has.

I'll probably own PLX again in the future. I'm just uncomfortable about the current price of the stock in this competitive environment.

Micromet: More Reasons for Optimism

Ohad,

I was at the meeting. The room was packed. In fact, they had to move chairs in the back of the room.

Also of note was the quality of attendees. There were lots of well known analysts that were taking in the presentation, but remained quiet.

Management's demeanor was very positive before, during and after the presentation. I got the feeling they wanted to say a lot more, but because of the embargos of upcoming conferences, they held it in.

I don't need to see the yet to be released data on 103 in ALL. The fact they are moving it into a pivitol trial speaks volumes.

Joe Najjar

Micromet: Another Seal of Approval

Ohad,

If MITI has truly developed a viable platform technology; I suspect the timing of "next" events may be difficult at best. For instance, DNA is moving as quickly as possible to complete their trastuzumab-DM1 program (Hercepting conjugated to IMGN's DM1 toxin - currently in Phase II awaiting a go no-go decision to Phase III this year). If successful, it would initially compete with Tykerb (developed by GSK and currently approved for Her2 positive breast cancer patients that did not or no longer responding to Herceptin). MITI has already developed the BiTE antibody to trastuzumab. I would not be one bit surprised to see either company in license the BiTE antibody. It could happen quite unexpectedly. In licensing by another company could put it into the game 2-3 years down stream toward the clinic.

Every other antibody that upon binding to the cell surface causes apoptosis is at risk to competition from the BiTE technology including conjugated antibodies that failed development due to neuropathy or toxicity - such as the Millennium PSMA conjugated (to DM1) antibody that was promising, but failed in the clinic as a result of circulating toxin which caused the neuropathy and narrowed the therapeutic window.

As far as announcements are concerned, I'm expecting the unexpected. The right announcement, from the right company, especially if it has significant cash upfront could provide more validation to the platform that the regurgitation in Science of previously available data

On the subject of short term trading; I live in Massachusetts where the state income tax on short term trading is 12%. When added to the 38% federal rate, my tax on short term profits is a whopping 50%. Therefore, to be tax efficient I need a very big expected pullback to trade out of a stock that I think is going much higher in the long term. My tax rate for long term profits is 15% federal and 5% state or 20% total.

All the best,

thirstycamel

Micromet: Another Seal of Approval

Ohad,

Thanks for another great article.

I had missed the fact that the high dose responders were younger. I'll look closer at the detail.

I must disagree with you conclusion that now is a good time to take some money off the table. My investment horizon in small biotechs is about 3 years. As long at the central investment thesis is ongoing, I think taking money off the table presents a disproportionate risk to experiencing a pullback. I respect your advice as a tool of portfolio management when the cash raised can be utilized in a similar or substantstially similar potential company, but I feel it's not applicable here. At this point the MT-103 data is the best I've seen since Gleevec. Also, if you compare the market capitalization of the DNA/SGEN deal for SGN-40 (primarily NHL); MITI looks cheap.

Again, great article .... as usual.

thirstycamel

Immunogen's Wild Swings Due to Lack of Information at ASCO

Excelent article, however proper analysis of the ADC space must include the work currently being done at MITI. The MITI data is spectacular at 60 micrograms per kilogram and the toxicity is very low.

I've owned IMGN, SGEN and currently own MEDX (a possible future player in this space). None have the promise of MITI if the data holds up.

MITI's bispecific (to T cells) data is so impressive, it is either a breakthrough or a fraud.

disclosure: long MITI