Courtesy of Pharmboy, Member of Phil's Stock World
Protalix (AMEX: PLX) is revolutionizing the development and manufacturing of recombinant therapeutic proteins through its ProCellEx™ plant cell-based protein expression system. The company is focused on the development and commercialization of a proprietary pipeline (Figure 1) of novel and biosimilar proteins that target large, established pharmaceutical markets and that rely upon known biological mechanisms of action. Protalix’s initial commercial focus is on complex therapeutic proteins for the treatment of genetic disorders, such as Gaucher disease and Fabry disease.
Protalix is also advancing other recombinant biopharmaceutical drug development programs, including a Tumor Necrosis Factor (TNF) inhibitor for inflammatory diseases. TNF inhibitors work by blocking the action of TNF, a cytokine - a small cell-signaling protein molecule - in the body that causes inflammation. (Pubmed Health)
Tumor necrosis factors (or the TNF-family) refers to a group of cytokines family that can cause cell death (apoptosis). TNF blockers include infliximab (Remicade), etancercept (Enbrel), adalimumab (Humira), certolizumab pegol (Cimzia) and golimumab (Simponi). (Wikipedia)
Protalix's lead product is Uplyso (taliglucerase alfa) for the treatment of Gaucher's disease. The treatment has orphan drug status in both the EU and US. The product is partnered with Pfizer. Gaucher's disease is a genetic disease in which a fatty (lipid) substance accumulates in cells and certain organs. Patients (males and females) have a hereditary deficiency of the enzyme glucocerebrosidase (also known as acid β-glucosidase). This deficiency causes lipids to accumulate in cells, especially those of the immune system. Uplyso is a plant-cell expressed recombinant form of glucocerebrosidase which Protalix is developing for the treatment of Gaucher disease." (Drugs.com)
About 1 in 100 people in the United States are carriers of the most common type of Gaucher disease. The carrier rate among Ashkenazi Jews is 8.9% while the birth incidence is 1 in 450 (remember this!).
In clinical trials, data from Uplyso showed that it is as efficacious as Genzyme's Cerezyme and Shire's Vpriv. (See comparison table at Gekkowire's terrific site.) During Genzyme's manufacturing issues in 2009, patients were switched over to Uplyso under a Life Savings Use Program from the Department of Health. As of November 2010, PLX submitted a Marketing Authorization Application (NYSE:MAA) in the EU for Uplyso and the company is awaiting a ruling.
In February 2011, PLX was issued a Complete Response Letter (NYSE:CRL) from the FDA in regards to Uplyso. Due to the CRL, the company has to resubmit everything to the FDA. (Read about the CRL here.) The FDA's CRL caught many off guard; there was no warning in the PDUFA or other documents made public.
The FDA found the manufacturing facilities acceptable according to the 8K filed by PLX. Therefore, the surprise rejection could be due to either a validation plan or the FDA just isn't ready yet for the technology and wants more time to review it. A validation plan is about how the company will execute and control the manufacturing of the 'drug' for consistency. I think the latter is more likely as the FDA asked for the full switchover data - something that was never asked for in the SPA (Special Protocol Assessment). The FDA may be stifling innovation by not actively working with companies even after their NDA/BLA has been filed. I still believe that PLX will get approval in the US, and the EU approval should come sometime in Q3 or Q4.
ProCellEx recombinant protein expression system uses advanced genetic engineering and plant (carrot and tobacco) cell culture technology instead of the traditional mammalian- or yeast-based systems. The technology enables the production of a wide range of complex, proprietary and biologically equivalent human proteins to address a variety of diseases. Protalix's novel bioreactor system, utilizing disposable plastic bags, is the first of its kind. The closed system provides stable, optimized conditions, with manufacturing capabilities for the entire range of proteins, including antibodies, complex enzymes, and plant-derived pharmaceuticals. The techology:
- Significantly lower capital and production costs
- Is scalable
- Enables penetration of certain patent-protected markets
- Yields safety, potency and consistency of end product
- Maintains protein assembly and post-translation modifications, including glycosylation
- Maintains natural biological activity, and
- Allows for a broad range of protein expression capabilities, including enzymes, cytokines, hormones and mAbs.
Bioreactors are just what they sound like, giant vats that include cells, sugar, and water. (Think of them as a huge beer or wine incubator, where the end product is a protein for biological use, rather than a drink of spirits!) The 'cells' are used to manufacture the protein of choice, and then those proteins are harvested, bottled, and used in medical diseases. PLX is using this unique system to lower the costs of production for many different products, and therefore it is entering the bioequivolent space (competing against JNJ's Centicor, SNY's Genzyme, and Roche's mAb pipeline).
Figure 1. Pipeline of PLX.
Market Share for Uplyso
Cerezyme has been on the market for many years, and getting patients to switch over will be a tall order. Pfizer has the marketing power to do just that, and is starting in Brazil. With a lower cost of goods, PFE will be able to do two things: 1. Understand how to market Orphan indications in both the US and EU (they do not have any experience in this), and 2. Use the pricing power to garner market share from the higher COG from Shire and SNY (~$800M sales in 2010), especially in the EU. The biggest factor though, is that PLX will be able to market Uplyso in Israel itself, where a vast majority of patients exist! Even if they take 10% of the Gaucher's market ($100M), that yields a P/E of 3. When looking at the rest of the pipeline, I can see the company having a market cap 10X higher than now! But I also don't see it necessarily being around long enough for that to come to fruition.
Current Financial Position
PLX recently (March 2011) sold 4M shares for $5.50/share. With no debt, $50M in cash, and a burn rate of about $4-10M/Q, PLX should have enough capital to get them throughh their PDUFA date fo February 1, 2012. The company discloses that it wants to invest in infrastructure (capacity to generate bioequivolents), so the company says the manufacturing facility would cost about $25M. That could start in the coming year or so.
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Disclosure: I am long PLX.