UPDATE: Protalix Gaucher's Treatment Passes Late-Stage Trial
16 October 2009 - 2:50AM
Dow Jones News
Protalix BioTherapeutics (PLX) reported positive results of its
Gaucher's disease treatment in a late-stage trial, adding to the
competition facing Genzyme Corp.'s (GENZ) top-selling Cerezyme.
Both drugs treat the extremely rare condition by replacing a
deficient enzyme that leads to fat cells building up in certain
organs and bones, causing disability, complications and death in
some circumstances. A production issue at Genzyme has caused a
Cerezyme shortage until year-end, prompting the Food and Drug
Administration to allow drugs from Protalix and Shire PLC (SHPGY)
to be used in patients before agency approval, expected in
mid-2010.
The positive data are lifting Protalix's shares by 6.6% to
$9.46, after hitting a new 52-week high earlier Thursday. Genzyme
fell 21 cents to $56.28.
"Although the expectations were high, we believe the efficacy
and safety data more than lived up to these expectations," wrote
Brian Abrahams, in a note to clients, raising his price target on
the stock to $13 from $11. Protalix has proposed the brand name
Uplyso for the drug.
Abrahams highlighted that the data also provide support for the
potential of Protalix's manufacturing process, which uses
genetically modified plant cells in plastic bags to produce the
drug, as opposed to more traditional biotech methods using
mammalian cells in large metal tanks.
The Protalix process is cheaper and may provide less opportunity
for contamination like that which caused issues for Genzyme. Some,
including Abrahams, believe the technology makes the company an
attractive acquisition target.
The data also increase the competitive pressure on Genzyme,
which is scrambling to reassure patients as it resumes full
production of Cerezyme, which had 2008 sales of $1.24 billion.
Shire reported positive late-stage data on velaglucerase in August,
and Genzyme's situation has increased the expected approval
timelines of both drugs.
"We continue to believe Cerezyme's long-term growth outlook will
disappoint," said Robert Baird & Co. analyst Christopher
Raymond, who is recommending that clients stay on the sidelines
regarding Genzyme shares.
-Thomas Gryta; Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com