Pfizer partner Protalix soars on sale speculation

All options appear to be on the table for Protalix BioTherapeutics, maker of a rare disease drug partnered with Pfizer ($PFE). With pharma interest in rare-disease drugs becoming quite common, Protalix ($PLX) said today that it has hired Citigroup to help review "a broad array of product partnering, technology sharing and other strategic alternatives" for the Israel-based biotech company. This could involve a buyout deal, but the company didn't elaborate.

Yet the Israeli newspaper Calcalist reported that Protalix aims to fetch $1 billion in a sale, as cited by Bloomberg. The biotech's shares jumped nearly 15% to $6.15 per share, giving the company a market value of $574.8 million, according to Google Finance.

The biotech's review process could lead it into the arms of Pfizer, which already controls a major stake in sales of the Gaucher disease drug Elelyso and has an interest in buying the company, Calcalist reported. Last year Elelyso became the first drug made from plant cells to garner FDA approval. More importantly for Pfizer, the drug bolstered the U.S. drug giant's efforts to make inroads in the market for pricey drugs against rare genetic diseases.

"Pfizer is interested in Protalix's manufacturing prowess," Steve Brozak, an analyst at WBB Securities LLC who has a buy rating on Protalix, told Bloomberg in an interview. He added that Protalix CEO David Aviezer "has in 20 years put together a company that has the technology that can change the way these very sophisticated products are made."

Sanofi's ($SNY) Genzyme and Shire ($SHPGY) both make rival Gaucher therapies with mammalian cells. Pfizer has pledged to stock up on supplies of Elelyso for patients with Gaucher after manufacturing delays caused shortages of Genzyme's Gaucher drug Cerezyme. Pfizer has elbowed in with its new product for Gaucher, which robs the body of an enzyme that breaks down a type of fat, resulting in unhealthy buildups of the fat in organs such as the spleen, bone marrow and liver.

Genzyme pioneered the lucrative business for enzyme-placement therapies for Gaucher. Even though the disease affects about one in 50,000 people in the general population or roughly 6,000 patients in the U.S., companies charge hundreds of thousands of dollars per patient for the treatments.

Tack on the difficulty of copying the biologics once they lose patent protection, and you start to understand why pharma companies have rushed to adopt orphan drug programs for inherited diseases.

- here's the Protalix release
- check out Bloomberg's article
- and (if you don't mind the Google translation) Calcalist's coverage

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