Opportunity slipping from Protalix's grasp

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Call Protalix BioTherapeutics’ Uplyso the poster child of biotech missed opportunities. With Genzyme struggling to meet demand for competing Gaucher disease therapy Cerezyme and Shire still trying to fill that space with Vpriv, the FDA’s complete response letter must be all the more bitter for the competitive opening that is gradually getting smaller for the Israeli company’s product (Event - Uplyso hopes to hear starting pistol, January 27, 2011).

The regulator questioned the chemistry, manufacturing and controls for the novel plant-based production process for Uplyso and requested more data from ongoing trials. It did not, however, request new trials for the treatment also known as taliglucerase alfa, which Protalix executives took as good news. But with analysts now assuming approval is at least a year away, investors deserted its shares on Friday, sending them down more than 18% to a six-month low of $7.63.

Protalix will now be in a race to get taliglucerase to market before Cerezyme resumes full production. No doubt Genzyme’s investors would like to collect the first $1-per-share bonus they would earn as part of the Sanofi-Aventis acquisition, so there is likely some pressure for manufacturing chiefs to hit that milestone by the end of 2011 (Sanofi finally snags Genzyme with clever CVRs, February 17, 2011).

Meanwhile, Shire’s investors appear pleased, pushing shares in the British company up 4% as an immediate competitive threat was removed.

Manufacturing questions

It is not the first time that the manufacturing process for the enzyme replacement therapy has led to delays for taligucerase (Protalix's woes continue with Uplyso setback, February 2, 2010). Unlike its potential competitors, made in human and animal cells, taliglucerase is made in plant cells, specifically carrots, which Protalix argues is more cost-effective and limits the risk of mammalian viral infection. However this novelty has also brought on some scrutiny from the FDA.

In a call with investors, Protalix chief executive David Aviezer said company executives will not know all of the details of the FDA request until they can meet with agency staff. However, Mr Aviezer described the manufacturing issues as “straightforward” such as tightening specifications.

As for clinical data, the regulator would like to see data from an ongoing trial of patients who changed therapy from Cerezyme to taliglucersase and long-term safety extension, which were not complete at the time Protalix filed its new drug application. However, Mr Aviezier put a good light on the rejection by describing it, as is often the case when biotechs receive complete response letters, as another step toward eventual approval.

Investor reaction

Investors saw it a little differently. The market losses on Friday continued in early trade today – down another 7% to a six-moth low of $7.12 (Protalix can wait for Uplyso's FDA review, July 13, 2010).

As taliglucerase is Protalix’s only project that has any value ascribed to it, with a net present value of $904m, according to EvaluatePharmadata – one and a half times the company’s market capitalisation at Friday’s close – this behaviour is not surprising.

For partner Pfizer, which holds rights to the biologic outside of Israel, the news had no effect (Protalix brings on Pfizer as fight for Gaucher patients looms, December 2, 2009). Analysts for the New York giant have not ascribed any value to taliglucerase yet, quite possibly because of the risk of these regulatory delays as well as questions over commercial potential.

Orphan opportunity

As an orphan condition, Gaucher disease may not have the multi-blockbuster potential of a cancer or cardiovascular treatment and may not be able to get the attention of Pfizer watchers until it is nearly on the market. Still, those high-profit orphan conditions are seen as attractive targets for big pharma looking to fill empty pipelines (Glaxo attracted to rare diseases, October 13, 2010).

Gaucher disease affects 1 in 20,000 live births, although in certain populations, such as Eastern European Jews, the incidence is much higher. Genzyme’s experience has shown that such “nichebuster” indications can be very lucrative, with annual costs exceeding $100,000 a year.

That is an opportunity that has slipped from Protalix’s and Pfizer’s grasp once again. An FDA approval would have given taliglucerase a chance to exploit Cerezyme’s market weakness. Now it appears it will be attacking a Gaucher space next year that has two stronger incumbents.

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