December 1, 2009 / 12:19 PM / 10 years ago

UPDATE 4-Pfizer acquires rights to Protalix's Gaucher drug

* Buys rights for $60 mln upfront payment

* Protalix eligible to milestone payments of up to $55 mln

* Protalix to retain marketing rights to drug in Israel

* Protalix shares fall as much as 15 percent (Adds Pfizer, Protalix comments)

By Esha Dey

BANGALORE, Dec 1 (Reuters) - Pfizer Inc (PFE.N) said it would acquire worldwide rights to Protalix BioTherapeutics Inc’s (PLX.A) experimental Gaucher disease drug, Uplyso, for an upfront payment of $60 million, disappointing investors who were expecting the Israeli biotech company to be acquired.

Protalix shares fell as much as 15 percent to $8.41 on the American Stock Exchange, while Pfizer shares were up 3 percent at $18.73 on the New York Stock Exchange.

“There is some immediate-term disappointment that Protalix wasn’t outright acquired, but I don’t think this precludes the potential for them to be acquired down the line,” Oppenheimer and Co analyst Brian Abrahams said, mentioning Teva Pharmaceutical Industries Ltd (TEVA.TA) TEVA.O and Pfizer as potential buyers.

However, analysts said the deal is a validation of Protalix’s drug technology and would eventually boost the company’s value.

“For Protalix, this is proof that their platform technology works. And that is more important than a few million (dollars) here or there,” WBB Securities analyst Steve Brozak said.

Protalix’s drug for the rare disease is derived from cells taken from carrots, giving it a potential safety advantage over traditional biotechnology medicines derived from animal cells by avoiding the possibility of contamination from mammal viruses.

Genzyme Corp’s GENZ.O top-selling Gaucher treatment, Cerezyme, with which Uplyso would compete, is derived from cells from Chinese hamster ovaries. Genzyme recently suffered a major supply disruption at its Boston manufacturing plant due to a viral contamination.

Shire Plc SHP.L is also developing a treatment for Gaucher, an arena that Genzyme has had much to itself.

Gaucher disease is a rare genetic disorder in which patients are deficient in an enzyme that breaks down a certain type of fat molecule, leading to potentially deadly organ damage. It affects about 5,000 people worldwide.

Protalix CEO David Aveizer said in addition to potential safety advantages, the plant-cell technology is far more cost efficient than traditional biotech production methods.

“We have the ability to make this protein in a much less expensive way,” Aveizer said in a telephone interview.

Despite that ability, Pfizer declined to say whether its drug would be sold for substantially less than Genzyme’s product, which is considered to be one of the world’s most expensive medicines.

Protalix is also using its plant-cell culture technology, called ProCellEx, to develop drugs for the treatment of Fabry disease, a rare genetic disorder, and a biosimilar version of Amgen Inc’s (AMGN.O) rheumatoid arthritis drug Enbrel.

Pfizer said the deal does not include potential future drugs developed using the Protalix technology.

“This initial deal is focused on and limited to the Gaucher’s product, but our discussions and understanding of the technology platform ... is just beginning,” David Simmons, head of Pfizer’s established products unit said, calling it “the first step in the partnership.”

The viral contamination at Genzyme’s plant caused severe shortages of Cerezyme, which prompted the U.S. Food and Drug Administration to allow Protalix and Shire to supply patients with their drugs before they received official approval.

Protalix said it plans to file for U.S. approval this month. Uplyso is also currently being provided to Gaucher patients in the European Union under a “compassionate use” protocol.

Genzyme’s plant is now operational and the company said on Tuesday it has started shipping vials of newly produced Cerezyme. [nWNAB0928]

“They are in combat now,” WBB’s Brozak said of Genzyme. “For Genzyme it means an absolutely well-funded competitor in the marketing sphere.”

Under Tuesday’s deal, Protalix is eligible to receive additional milestone payments of up to $55 million and will retain the marketing rights to the drug in Israel.

Pfizer and Protalix will share future revenue and expenses for the development and marketing of the drug on a 60 percent/40 percent basis respectively.

Oppenheimer’s Abrahams expects 2013 worldwide sales of Protalix’s drug to exceed $180 million, while Brozak sees 2012 sales of $360 million.

Protalix shares were off their earlier lows, down $1.13, or 11.5 percent, at $8.73 in afternoon trading. (Reporting by Esha Dey in Bangalore; additional reporting by Bill Berkrot in New York; Editing by Aradhana Aravindan and Maureen Bavdek) ((; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below