October 1, 2012–Shilpa Siddhi, M.S., M.B.A., Ning Yang, Ph.D.

Protalix (PLX) is a specialized biopharmaceutical company that has revolutionized medicine and cell therapy by manufacturing the recombinant therapeutic proteins through its ProCellEx system. Protalix’s pipeline includes therapeutics for Gaucher disease, Fabry disease, Biodefense, CNS, and autoimmune diseases. The company is also evaluating programs for monoclonal antibodies, cytokines, and vaccines. In May 2012, Protalix, along with its partner Pfizer (PFE) received FDA approval for ELELYSO (taliglucerase alfa), which is an enzyme replacement therapy for Gaucher’s disease, while in June 2012, the European Medicines Agency (EMA) recommended against the approval of Elelyso.

Protalix had total cash and cash equivalents of $59.3MM at the end of Q2 FY2012. With a total diluted share count of 92MM (as of May 12, 2012) and a stock price of $4.87 (as of September 14, 2012), Protalix has a market cap of $447.6 MM and an enterprise value (EV) of $465.2 MM.

On September 27, 2012, Protalix announced that the company has received marketing authorization for Elelyso for the treatment of Gaucher disease from the Israeli Ministry of Health. Protalix retains the commercialization rights to Elelyso in Israel. For the purpose of this report, the sales revenue for Israeli market has not been factored in.

Proprietary ProCellEx Technology: ProCellEx is a proprietary next generation recombinant protein expression system that uses genetic engineering and plant cell culture technology. This technology can be used to produce a wide variety of complex human proteins and recombinant drugs to address a variety of diseases. This technology offers significant advantages over existing expression systems, including cost effectiveness, safety, and entry into certain patent-protected markets. Penetration into patent-protected market increases the product opportunities for biosimilars, biobetters and novel biologics.

Pipeline: Protalix has a limited pipeline of biosimilars mostly in the preclinical stages except PRX-105, which has completed Phase I trials. In August 2012, Protalix received FDA clearance to initiate Phase I/ II trial of PRX-102, the company plans to commence enrollment of Fabry disease patients in the fourth quarter of 2012. The company is dependent on significant investment in clinical trials to strengthen its pipeline. It appears as if their strategy is to find commercial partners for the products.

Figure 1: Product pipeline of Protalix

(Source: Protalix corporate presentation)

Gaucher Disease: On May 1, 2012, Protalix, in partnership with Pfizer gained FDA approval of ELELYSO for the treatment of Gaucher disease in the U.S. Pfizer has exclusive worldwide rights on Elelyso, while Protalix retains 100% rights on Israel market. Future revenue and expenses for the development, commercialization, and losses were shared 60% and 40% between Pfizer and Protalix, respectively. Protalix has received an upfront payment of $60 MM for the execution of the agreement, and an additional $5 MM for the pediatric investigation plan. In June 2012, it received $25 MM milestone payment for the FDA approval of taliglucerase alfa. Marketing applications have been submitted by Pfizer to the National Sanitary Vigilance Agency (ANVISA) of Brazil, and to the Australian Therapeutics Goods Administration and by Protalix to Israeli Ministry of Health (MOH) relating to the potential marketing and sale of the product. In June 2012, the EMA’s Committee for Medicinal Products for Human use recommended against the marketing authorization of taliglucerase alfa. The company has passed good manufacturing practice audits performed by MOH, and ANVISA. From 2009 when Genzyme reported limited production of Cerezyme causing limited supplies, taliglucerase alfa was made available in USA, France and Brazil under compassionate care…Read More>>

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