"We can treat half world's Gaucher patients"

Protalix CEO Dr. David Aviezer tells "Globes" that Uplyso is safer than its rival.

After a 15-month delay, the US Food and Drug Administration (FDA) is due to approve for marketing Protalix Biotherapeutics Inc's (AMEX:PLX; TASE: PLX) treatment for Gaucher disease - Uplyso (taliglucerase alfa), a recombinant protein derived from tobacco plants.

Protalix is an odd company, people sometimes say behind the scenes. "On the surface, it looks good and professional, but even though its technology can be used to develop many products, it has only one product in the advanced stage, and there is relatively little clinical data for a company that is about to launch a new product," says one source.

The long months of waiting for FDA approval are nerve wrenching, but Protalix is not resting on its laurels, and in the past year, it has worked precisely on these two points.

Last week, Protalix announced additional data from the extension study of Uplyso on patients who were not previously treated with it. The company reported success on all the study's endpoints, the most important of which was a statistically significant reduction in the mean spleen volume.

A week earlier, Protalix published data from a switch-over study of Uplyso on patients previously treated with the product of its main rival, Genzyme Corporation. The study found that the performance of Uplyso was similar to that of Genzyme's product, Cerezyme.

"Our sense from doctors is that there is no statistical difference between the products," Protalix CEO Dr. David Aviezer told "Globes". "Our advantage is in plant production, which is safer."

"Globes": Is it cheaper too?

Aviezer: "Probably. Pfizer, which markets the product, knows a thing or two about marketing, but we believe that we'll have a good price, especially in a world of economic pressure. Pfizer is also preparing a patient support network to enable to exploit all its financial rights."

"Genzyme ostensibly rules the market"

Does pharmaceutical companies supporting patients sound strange to you? That's how it is in the growing business of orphan drugs, where high-cost drugs are sold to very few people. Genzyme, currently the market leader for the treatment of Gaucher disease, was the first company to realize this, and established close relations with patients. However, two years ago, problems at the company's manufacturing facility caused a shortage of Cerezyme. The target date for renewed production has been postponed several times, resulting in a loss of confidence among some patients. This is just the opportunity for Protalix and its British competitor, Shire plc (LSE: SHP; Nasdaq: SHPGY) to enter the market.

"Shire is selling its entire output, treating 1,000 patients. It cut its price to 15% compared with Genzyme, and signed an agreement with a large insurance company. This is proof that it's possible to penetrate the market that is ostensibly ruled by Genzyme," says Aviezer.

What is Protalix's production capacity?

"We've expanded our plant, and we can treat more than half of the world's Gaucher disease patients, i.e. about 3,000 people. We believe that treatment will increase the diagnosis rate, because companies will work hard to find undiagnosed patients. Pfizer has experience in sales in the developing world, where Gaucher disease is prevalent, but where most patients are undiagnosed and untreated."

Protalix and Pfizer Inc. (NYSE: PFE; LSE: PFZ) are waiting for an answer from the Brazilian government on an agreement worth hundreds of millions of dollars to supply Uplyso to the country. The decision on an expanded agreement will probably be made in May, when Protalix receives its response from the FDA.

How do you and Pfizer split the revenue. Officially its 60/40 in Pfizer's favor, but you're responsible for production, and marketers are known to manipulate prices to lower official revenue.

"True, there are such cases, which is why this contract clearly sets out how much we can collect from the joint venture for production costs, and how much it can charge for marketing. We estimate that a third of the product's revenue will go directly to our gross profit line."

Israel has a relatively high number of patients with Gaucher disease, at around 500. Protalix has the Uplyso marketing rights in Israel, and is waiting for the FDA approval to launch sales independently of Pfizer.

What is your financial plan?

"We have cash that should suffice for the coming period ($34.5 million at the end of September 2011 - G.W.), and we're due to receive $50 million in two tranches when we receive marketing approval in the Europe and the US. We have no expenses in the marketing stage, so most of the proceeds will be invested in development."

Lately, there have been market assessments that if there is another postponement in the timetable, Pfizer will help you financially.

"That is not correct at this time. If the situation changes, we'll make an announcement."

What are your development plans for other products?

"For Fabry disease, a genetic disorder with characteristics similar to Gaucher disease, we plan to begin a Phase I/II clinical trial (of PLX-102) within six months. Our production method has created a slightly different treatment from that of our competitor, Genzyme, and preclinical trials indicate that our product has a longer shelf life. We believe that the approval track for the drug will be similar to that for our Gaucher treatment, because this is a known molecule, and it is also an orphan drug."

Both Uplyso and PLX-102 target small markets. Protalix may have a breakthrough with a third product, PLX-106, which is currently undergoing preclinical trials - a protein that mimics Enbrel, a brand drug of Amgen Inc. (Nasdaq: AMGN) for the treatment of autoimmune diseases, including rheumatoid arthritis.

"Everyone wants to develop biological equivalents to Enbrel," says Aviezer. "Merck recently acquired, for $800 million, a Swiss company that is developing a comparable molecule, in order to compete against Amgen when the Enbrel patent expires in 2013."

Meanwhile, Amgen has petitioned to extend its Enbrel patent until after 2020. Merck & Co. (NYSE: MRK) and other companies are contesting the petition, and legal sources believe that there is a good chance that it will be rejected.

An extension of Amgen's Enbrel patent is not bad news for Protalix, because the patent is specific to the production of the molecule from animal cells. This means that a patent extension would block all of Amgen's competitors for more than ten years, except for Protalix, because its molecules are based on carrot and tobacco cells. Aviezer adds, "In any case, the patent is only in the US, and tiny Protalix will not contest it."

Protalix is also developing an oral treatment for Gaucher disease. "The plant cell retains the enzyme's action," explain Aviezer. "The product has been successfully tested in pigs, which have a digestive system that resembles ours. There is already an oral treatment for Gaucher's, made by Actelion Pharmaceuticals AG (SWX: ATLN), but it causes side effects, including diarrhea and hand tremors. It is only authorized for people with trypanophobia (needle phobia). Genzyme is developing an oral treatment, which is undergoing a Phase III clinical trial, but it also has a challenging side effects profile."

Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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