UPDATE 3-U.S. seeks more data on Protalix drug; shares fall

Fri Feb 25, 2011 4:53pm EST

* FDA declines to approve Gaucher treatment

* Agency wants additional data, not new trials

* Protalix shares end down 18.5 pct; Pfizer down 0.2 pct (Adds analyst reaction, updates share prices)

By Susan Heavey

WASHINGTON, Feb 25 (Reuters) - U.S. health regulators want more data on Protalix Biotherapeutics Inc's (PLX.TA)(PLX.A) and Pfizer Inc's (PFE.N) experimental drug for Gaucher disease before deciding whether to approve the therapy for patients with the rare genetic disorder.

Protalix closed nearly 18.5 percent lower after being down as much as 29 percent earlier.

It also spells some uncertainty for the $2 billion Gaucher market, which has been dogged by shortages of the leading therapy -- Genzyme Corp's GENZ.O Cerezyme.

In a letter to Protalix on Friday, the Food and Drug Administration did not call for any new clinical trials, the Israeli drugmaker said. However, the FDA did ask for additional data from several existing studies.

While gathering extra data is less onerous than launching an entirely new study, the news still scared off some investors as Wall Street analysts had largely expected approval and decent market share, given the muscle of the company's marketing partner, Pfizer.

Jon LeCroy, a senior healthcare analyst for Hapoalim Securities USA Inc, said he now expects at least a 12-month delay before the drug could get approved for the U.S. market.

Canaccord Adams analyst Ritu Baral said she still predicts that Protalix's drug will capture 15 percent or more of the $2 billion global Gaucher market even as it faces a 9-12 month U.S. delay to market.

Protalix said the FDA had sought more information about clinical use, drug chemistry and manufacturing controls. The agency already has inspected the manufacturing site.

Chief Executive Officer David Aviezer said in a statement that Protalix was "disappointed," but would work with the agency and ask FDA officials for a meeting as soon as possible to clarify their request.

Pfizer also pledged its commitment to the drug, known chemically as taliglucerase.

Gaucher disease stems from an enzyme deficiency that prevents the breakdown of certain fats in the body. It can cause organ damage or death and affects about one in 50,000 to 100,000 people, but is particularly prevalent among Ashkenazi Jews, according to the National Institutes of Health.

Unlike most biotech drugs, which use cells from mammals, taliglucerase is made with genetically modified carrot cells.

Most analysts had expected the companies' drug to take a bite out of the Gaucher market from Genzyme, which already has seen Cerezyme sales slump amid manufacturing and distribution problems. Genzyme is being acquired by Sanofi-Aventis SA (SASY.PA) (SNY.N).

Oppenheimer & Co analysts have said sales of Protalix's drug could reach $225 million by 2014, with less of an impact given that British drugmaker Shire Plc's (SHP.L) rival product, Vpriv, already has made it to the U.S. market.

Still, Pfizer and Protalix may be able to offer their intravenous therapy at a lower price, making it a more attractive option for health insurers, the analysts said earlier in February.

Pfizer's marketing prowess also could give the drug a boost if it eventually wins approval, other analysts have said. The companies have been hoping to sell it under the brand name Uplyso.

Although Genzyme's Cerezyme made up 41 percent of the $2 billion Gaucher drug market in 2009, its share could shrink to 27 percent in 2015, when the market is expected to reach $4 billion, according to Thomson Reuters data.

Genzyme also is working on a new, capsule treatment for the disorder.

Shares of Protalix closed down 18.5 percent to $7.63 on Friday, while Pfizer ended off 0.2 percent at $18.86. (Reporting by Susan Heavey; Additional reporting by Debra Sherman in Chicago; editing by John Wallace, Lisa Von Ahn and Carol Bishopric)

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