Protalix Biotherapeutics Inc. (AMEX:PLX; TASE: PLX) has announced that the European Medicines Agency (EMEA) has rejected, Elylyso, the company's treatment for Gaucher disease. The EMEA's Committee for Medicinal Products for Human Use (CHMP) ruled that a product by Britain's Shire plc (LSE: SHP; Nasdaq: SHPGY) had already received orphan drug status for the treatment of Gaucher disease in August 2010, which gives Shire ten years marketing exclusivity in the EU.
The ruling was made even though CHMP gave a positive risk-benefit assessment for Elylyso. The EMEA has three months to decide whether to accept CHMP's recommendation.
In a conference call this morning, Protalix CEO Dr. David Aviezer said, "The advisory panel decided that Elylyso is worthy of marketing by every medical aspect, but that it is legally restricted. This is disappointing, but we hope it is only a temporary setback."
Aviezer added, "There has been a shortage of treatments for Gaucher's disease for years, and we had expected that the EMEA would make an exception from orphan drug status in our case, as it has the legal right to do. The CHMP deliberated the issue, before deciding to stick with the legal restriction. Although CHMP's considerations are narrower and more restrictive, the EMEA sees a broader picture."
Aviezer added that, in addition to possible shortage of treatments for Gaucher disease, the EMEA should also take into account Elylso's lower price. "We intend to take every measure permitted by law to change the decision," he said.
Protalix's Elylso has a similar chemistry to Shire's drug, but has a different production mechanism, which is why Protalix is not infringing on Shire's patents. The legal issue was solely over Shire's orphan drug status.
The US Food and Drug Administration (FDA) approved Elylso in May. Protalix has a partnership with Pfizer Inc. (NYSE: PFE; LSE: PFZ) for marketing the drug.
"The first competitor in Europe was actually Genzyme, which did not receive orphan drug status because that status did not exist in Europe at the time," said Aviezer. "Shire, which was the second company in the market, and was not the company that assumed the big risk, won a regulatory trick. We think that this fact also supports our argument."
Analysts estimated Protalix's revenue from Elylso in Europe at $300 million a year, after it obtains EMEA approval. This is a much smaller amount than US sale, equal to about sales in the rest of the world, excluding Israel.
Following the CHMP rejection, Protalix will now focus on the US market, where it has FDA approval, on Brazil, where it is due to sign a marketing agreement with Brazil's public health system, and on Israel, where it markets independently of Pfizer. Aviezer said that US sales were making good progress, and that until EU marketing approval is obtained, the company and Pfizer would focus on the South American and the Russian markets.
Protalix's share price fell 9.8% by mid-afternoon to NIS 23.32, after falling 6.2% on the American Stock Exchange on Friday to $6.19, giving a market cap of $568 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 24, 2012
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