One of the Israeli companies whose shares I hold in my portfolio tracked by "Globes", and that has risen significantly since the beginning of the July, is Protalix Biotherapeutics Inc. (AMEX:PLX). The share rose more than 55% in that period, without major news, and before gaining long-awaited US Food and Drug Administration (FDA) approval for its Gaucher's disease treatment.
Many undoubtedly remember how almost exactly a year ago, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) chairman Dr. Phillip Frost sold shares at what looked to be a fire sale, at prices around $6 a share. We asked then if Frost knew something we didn't.
Today it appears that if he knew then something negative, he was wrong, and his associates gave at the time the explanation that is generally given when you don't want to give the real reason, "He wants to diversify his holdings."
There are those who attribute the rise in Protalix shares to its listing on the Tel Aviv Stock Exchange (TASE) and joining three stock indexes, and there are those who mention Pfizer's operations in Brazil, which have not been officially reported yet.
There are also those who say that the battle for control at Genzyme, which produces a competing drug for Gaucher's disease, has an indirect positive effect on Protalix.
All these explanations are correct, and I would add that the closer we get to the FDA meeting in February on the authorization of the drug, short sellers are buying, and will continue to buy the stock.
In addition, the company's scientists will arrange a presentation in November at a professional conference in the US, and I expect that among other things, they will publicize there the first results of the "switch trial". That is a trial in which Gaucher's disease patients switch from Genzme's medicine to Protalix's. If it succeeds, it will provide important marketing leverage with receipt of authorization next year.
Protalix is also expected to report in the coming months the start of clinical trials for a new drug for a giant market, much larger than the Gaucher's disease market, which is estimated at less than $1 billion per year because of expected drops in prices of medications.
Protalix executives are still keeping under wraps the type of the second drug it will face off against. It is also not known if the beginning of clinical trials will be accompanied by collaboration with a giant pharmaceuticals company, and if so, if it will again be Pfizer - who, with regard to Gaucher's disease, has already proved to Protalix that it knows how to significantly increase the target market.
Published by Globes [online], Israel business news - www.globes-online.com - on October 12, 2010
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