Former Ivax chairman and CEO Phillip Frost is investing $15 million in Israeli start-up Protalix Biotherapeutics Ltd. and is already planning a revolution in the company. Frost will acquire 14% of the company together with a group of private investors (the Frost Group), and receive an option for an additional 5% of the company upon an additional investment of $5.3 million.
Belying earlier reports, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) is not participating in the financing round.
Frost, who now serves as a vice president at Teva, announced today that he planned to merge Protalix with Orthodontix Inc. (OTIX.OB). Frost is also a director of Orthodontix. Under the terms of the merger agreement, Orthodontix shareholders will receive 0.84% of Protalix for $1 million, and Protalix’s existing shareholders (excluding the Frost Group) will hold 85% of the shares of Orthodontix and the current shareholders of Orthodontix and the Frost Group will hold the remaining 15% of the shares of Orthodontix. The merged company’s name will be Protalix Biotherapeutics, and Protalix CEO Dr. David Aviezer will be the CEO of the merged company.
Orthodontix has no substantial activity at present; Protalix is merging with a stock market shell. Protalix predicts that its company value will reach $150-200 million, approximately the value at which it planned to hold an IPO.
With Frost’s investment in Protalix, the company presents an impressive list of directors, including Teva chairman Eli Hurvitz, whose serves as chairman, and Frost, who will serve as vice chairman. Aviezer claims that neither Hurvitz nor anyone else at Teva was behind the hook-up with Frost, but that it was mediated by Frost’s attorney. Aviezer said, “Frost is coming with in-depth knowledge of the market and many ideas for new projects and joint ventures. He has close ties with academe and is director at leading research institutes. He has widespread ties ranging from academe through the industry and the capital market.”
Frost said, “We are excited by the breadth of Protalix's unique plant cell culture bioreactor platform, the quality of the management team and the prospects for the company's products and technology, particularly its lead product for the treatment of Gaucher Disease, which is progressing through the clinical development process.”
Hurvitz said, “We are very pleased with Dr. Frost joining Protalix's Board of Directors. This investment is an important milestone in Protalix's pathway to becoming a true international biotech player. We view this as an important sign of confidence in Israeli biotechnology in general and in Protalix in particular.”
In addition to Protalix’s treatment for Gaucher’s Disease now undergoing clinical trials, the company has a number of other developments in the early stages, all of which are based on the production of proteins from plants designed to replace human proteins missing in patients because of genetic defects.
Published by Globes [online], Israel business news - www.globes.co.il - on August 22, 2006
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