The biomed investors conference held today by investor relations firm Gelbart Kahana at the Tel Aviv Stock Exchange was jam-packed, attracting approximately twice the number of people that a conference of this kind usually hosts. Protalix Biotherapeutics Inc. (AMEX:PLX; TASE: PLX) CEO David Aviezer turned up and was greeted with the kind of excitement reserved for reality TV stars. Professor Yoseph Shaaltiel, who invented the technology, was also greeted enthusiastically by the participants.
The number of investors at the conference and their reactions are only some of the symptoms of the biomed festival on the Tel Aviv market in the past month, reaching a climax yesterday with the approval Protalix received from the US Food and Drug Administration (FDA) to sell its treatment for Gaucher's disease.
The approval was predictable, given the good results of the clinical trials, but since the FDA had previously turned the product down, the market was highly nervuos, and it only took a few tepid analyst reports to send the share price plummeting yesterday before the approval was announced.
The thought of what would have happened to the industry had the negative scenario materialized and the approval had been held up again is frightening. Protalix is considered a very serious company, and investors have great faith in it. Had it erred again in its assessment of its ability to obtain approval, investor confidence in the entire sector would have been damaged so badly that it would have been hard to restore it.
Fortunately, the outcome was positive, and there now begins a new and no less challenging era for the company. Protalix now embarks on the task of the marketing. In the past few years, investors on the Tel Aviv Stock Exchange have been witness to the fact, particularly among medical device and diagnostics companies, that obtaining marketing approval does not necessarily mean immediate sales. Overseas, even companies with antibiotic dugs have suffered problems after receiving approval, when it turned out that the market was not excited about the advantages of their products in comparison with existing ones.
In the case of Protalix, that is certainly not what is expected to happen. It is making its entry with a product with which the market is actually already familiar, and is offering a cheap but reliable version of its own. Its partner, Pfizer, is a bulldozer ready with a clear and detailed marketing plan; it has had fifteen months in which to perfect it.
There are two strong competitors in the market, but each has disadvantages. Genzyme, of the Sanofi-Aventis group, which produces Cerezyme, was the first company to decide to specialize in rare diseases, and for years it has been considered the savior of Gaucher's patients. However, because of contamination and recurring breakdowns at its production facility, which led to a shortage of the drug, its shining image was tainted, and patients are now happy to see competition, and at lower prices. The other competitor, Shire, has penetrated the market fairly successfully, but the FDA recently delayed the launch of one of its facilities, restricting its production capacity in the US.
From what Aviezer said today, it is clear that he sees beyond a treatment for Gaucher's to a company that produces a wide variety of drugs, both such as are similar to existing drugs in the marketplace and new drugs produced from its plant platform in the first place. He envisages Protalix as a company that develops and produces these products, and sells them itself, or at least some of them. He sees a company that is integrated lengthways, and very varied widthways.
I wouldn't describe this vision as "the next Teva" - neither in the emphases in its activity, which at Teva are more legal and logistical, nor in the final size that the company can be expected to reach but Protalix could certainly become Israel's biotech flagship.
Is it certain that Protalix will achieve this stature? Of course, there can always be surprises: pleasant, such as an acquisition; or unpleasant, such as breakdowns at the production plant, the discovery that the technology is not suitable for additional products, or management problems. But in what is known about Protalix at present, it is hard to see any reason why it should not realize its vision.
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2012
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