PROTALIX BIOTHERAPEUTICS, INC. (PLX)

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Protalix - Priced For A Second PDUFA Delay At $4.1 But If April 27 Date Stays Stock Will Quickly Climb To $10+

https://seekingalpha.com/instablog/50857529-johnsoriaknows/5564172-protalix-priced-for-second-pdufa-delay-4_1-april-27-date-stays-stock-will-quickly-climb-to-10#comments

Mar. 07, 2021 4:37 PM ETPLXERT, FOLD, MAA...2 Comments3 Likes

Summary

The recent biotech rout brought many biotechs to their knees including PLX. But after reaching $3.8 on March 6 morning, the stock recovered in the afternoon to close at $4.1.
Protalix still expects the April 27 PDUFA date for its PRX-102 Fabry disease candidate will be met per a recent press release. Downside is minimal with potential 300%+ on approval.
Protalix recently reported two more successful Phase 3 results adding to all previous positive data releases thus incresing the probability of PRX-102 approval. Analysts have assigned an 80%+ approval potential.
Protalix is funded to 3Q 2023 with a recent equity raise at $4.6/share amounting to about $40M. The company will receive up to $1 billion and tiered royalties up to 40% from commercial partner Chiesi upon PRX-102 FDA approval on April 27, 2021.
The company’s Fast-Track-designated PRX-102 for Fabry disease PDUFA date has been set for April 27, 202. If approved, PRX-102 could become the market leader in the $4B/year Fabry market currently led by Sanofi's Fabrazyme and growing at a 10% CAGR. Protalix currently enjoys a BUY rating with a consensus $13/share price target. Insiders and institutions own about 50% of common shares. The resulting public float is about 15M shares.

Discussion
Last week the market brought many companies, and small biotech companies to their knees including PLX stock. In fact, because of its low float and in particular because of investors' fears that the April 27, 2021 PDUFA date for PRX-102 could be delayed a second time PLX was manipulated down all the way to $3.8/share on the morning of March 6, 2021. The market recovered nicely in the afternoon and so was PLX price bouncing from the 200-day moving average to end the day up 7c at $4.19/share. Just two weeks before the stock price traded North of $7 regardless of the PDUFA date uncertainty. This can be seen in the following chart:

I believe those who entered the stock or averaged down at about $4/share will be very happy at the end of April following PRX-102 FDA approval. PRX-102 is Protalix lead drug candidate undergoing clinical trials for Fabry disease. But even if PDUFA is delayed by 3 months like the last time (because FDA inspectors could not travel to manufacturing facilities in Israel and Europe) entering the stock at $4, or 15% lower than the last equity raise at $4.6 will be richly rewarded in 2021.

The first time the PDUFA date was postponed from January 27 to April 27, 2021, the company was not nearly as strong fundamentally because since then Protalix reported several positive Phase 3 data readouts and now it's significantly stronger financially ($80M cash after February 2021 $40M raise at $4.6/share - Current market cap is only $190M with second FDA approved drug in front of us). At this point the risk to reward ratio related to investing in PLX stock is 300% to 10%.

At the time of the first PDUFA delay the picture regarding vaccinations was fuzzy at best. Just last week President Joe Biden said that the U.S. will have enough supply of coronavirus vaccines to inoculate every adult in the nation by the end of May — two months earlier than previously expected! This major accomplishment was made possible by the fact that that J&J and pharmaceutical giant Merck will work together to pump up production of the newly approved one-shot vaccine. The one-shot vaccine will indeed be a game changer in the execution of the country's vaccination goals because it is easier to handle and administer and will likely sway those not willing to get shot twice to do it this time. I've seen posts on message boards claiming that because of the pandemic inspections at manufacturing sites might be delayed by at least two years. These statements are obviusly ludicrous and aimed at creating fear an uncertainty.

Regarding FDA's inspection backlog the US Government Accountability Office (NYSE:GAO) is putting pressure on the FDA to quickly resolve this issue per a March 4, 2021 report. The report states:

"The FDA has used alternative inspection tools to maintain some oversight of drug manufacturing quality while inspections are paused. These tools include relying on inspections conducted by foreign regulators, requesting and reviewing records and other information, and sampling and testing drugs. FDA has determined that inspections conducted by certain European regulators are equivalent to and can be substituted for an FDA inspection. Other tools provide useful information but are not equivalent."

The GAO report further indicates that the FDA is studying the possibility of conducting those inspections virtually such as those being done by some European regulators since 2020 like the UK as an example.

In a recent TV interview from Israel CEO Dror Bashan commented: "If we get the approval in April - we will be a company on a completely different scale." In the interview CEO Bashan compared PLX to an IPO conducted at a serious discount. Once the approval is given, the drug is ready to launch and start sales and Bashan expects Protalix to become a "completely different company." Importantly, CEO Bashan also said that the FDA implied that they have a strong desire to put their drug on the market. Additionally, Protalix is ??waiting for Phase 3 BALANCE clinical trial results which aims to prove clinical superiority over the currently leading drug (Fabrazyme). If that happens, he said "the sky is the limit....we could reach a billion dollars in sales yearly."

The Fabry disease market is growing at a 10%+ CAGR and is expected to reach $4B by 2026 with only three competitors with approved drugs and one of them only approved in the European Union. In side-by-side clinical trials PRX-102 has shown many advantages over its competitors including market leader Sanofi's Fabrazyme.

Value investors will likely be watching PLX price action for an entry point, but with every passing week the probability of PLX staying the course regarding its PDUFA date increases exponentially. The first time the company announced the PDUFA postponement was on November 27, 2020, or exactly 2 months before the January 27, 2021 PDUFA date.

Although there were warnings from the company long before the November 27, 2020 press release announcing the PDUFA delay, this time company management sounds a lot more confident. In the February 18, 2020 press release announcing the closing of the $40M financing company management stated:

"Anticipated PDUFA for PRX-102 in Fabry disease currently set for April 27, 2021,"
"Company, with its Commercialization Partner, Chiesi, poised to commercialize PRX-102."
One thing that I hope it will become evident after you read this piece is that Protalix BioTherapeutics (NYSEMKT:PLX) lead drug candidate Pegunigalsidase alpha (PRX-102) to treat Fabry disease continues marching unrelenting towards commercialization every step of the way. Fabry disease is expected to become a $3 - 4 billion market by 2025 - 2026 growing at an estimated 10% CAGR, according to various reports. The way it looks thus far, PRX-102 could become the market leader in Fabry disease treatment not long after approval since pre-approval marketing efforts are in full swing and support in the Fabry community is strong and getting stronger with every clinical data redout. As an example of this support you might want to read what the influential Fabry patient advocate publication Fabry Disease News published on January 12, 2021 discussed on the benefits of Protalix lead drug PRX-102 for Fabry disease. The article entitled "PRX-102 Shown to Safely Improve Kidney Function in Adults With Fabry" will resonate among Fapry patients and PRX-102 largest future competing drug blockbuster Fabrazyme made my Sanofi (and the lesser ones as well).

I expect more accumulation going forward with price upswing as we enter April with no PDUFA delay announcements. My April 2021 price target is $10 - $14/share or $6/share if delayed again and marching towards my $10 - $14 post-approval target. Protalix currently enjoys a BUY rating with a consensus $13/share price target.

Zacks' new coverage on PLX shares dated January 7, 2021 with a $15/share price target is a MUST READ for anyone interested in owning PLX shares before and after Fabry drug appprolval. Zacks assigns a minimum 85% probability of FDA approval of PRX-102 for Fabry disease.

Zacks' Key reasons to own Protalix shares:

PRX-102 on cusp of commercialization
Target action date: April 27, 2021
Potential for superiority vs market leader Fabrazyme
Improved efficacy
Longer duration between infusions
Existing sales and royalty revenues from taliglucerase alfa Pfizer, globally, Fiocruz, Brazil
Maintain regulatory approved plant-based expression system
Orphan status granted for PRX-102
Partnership with Chiesi for global commercialization of PRX-102 in Fabry Disease
Rights to significant milestones and royalties
Depending on market conditions, a biotech rally might start the week of March 8, 2021 as many biotechs will be presenting at investors' conferences including Protalix. Additionally, the $1.9B Biden stimulus being approved, a confident Federal Reserve Chairmen Powell despite brief yield chatter last week, and accelerated COVID-19 vaccinations will likely fuel another market rally that could last for at least 6 more months. The company announced on March 4, 2021 that management will participate and present a corporate overview at the H.C. Wainwright Global Life Sciences Conference, a virtual conference taking place March 9–10, 2021.

About Protalix
Protalix BioTherapeutics (NYSEMKT:PLX) is a clinical-commercial pharmaceutical company focused on the development and commercialization of recombinant therapeutic proteins based on its proprietary ProCellEx platform.

Protalix was the first company to gain FDA approval for a plant cell culture expressed protein (Elelyso - See slide below). Elelyso (taliglucerase alfa for injection) is Protalix’s first drug product produced by its proprietary ProCellEx® protein expression system, and was approved for marketing by the FDA in May 2012, followed soon after by approval by ANVISA in Brazil, Israel’s Ministry of Health, and other regulatory authorities around the world.



ProCellEx is a plant cell-based protein generation process that incorporates techniques such as genetic engineering and plant cell-based protein expression to generate specific recombinant therapeutic proteins. These proteins are used in enzyme replacement therapy, or ERT, addressing several diseases including Gaucher's disease, Fabry disease, Cystic Fibrosis, Ulcerative Colitis, gout, and several more to come. The ProCellEx platform has the ability to manufacture complex proteins, antibodies, and vaccines and has the ability to orally deliver certain therapeutic proteins as demonstrated in animal models.

The following are some of the advantages of the company's ProCellEx drug development engine and manufacturing platform:



The company maintains the highest global quality of product and quality assurance standards. The company's cGMP manufacturing facility has been successfully inspected and audited by multiple regulatory agencies including the US FDA, EMA, Australian TGA, Brazilian ANVISA, and the Israeli Ministry of Health. This is very important in having a drug approved. As we learned this past week, CorMedix Inc. (NASDAQ: CRMD), the FDA did not approve the New Drug Application (NDA) for DefenCath™ (taurolidine/heparin catheter lock solution) because of concerns at the third-party manufacturing facility after a review of records requested by FDA and provided by the manufacturing facility. CRMD stock was crushed after te company announced the FDA's CRL sinking from $16/share to little over $7.

About Fabry Disease
Fabry disease is an inherited disorder that results from the buildup of a particular type of fat, called globotriaosylceramide, in the body's cells. Beginning in childhood, this buildup causes signs and symptoms that affect many parts of the body. Characteristic features of Fabry disease include episodes of pain, particularly in the hands and feet (acroparesthesias); clusters of small, dark red spots on the skin called angiokeratomas; a decreased ability to sweat (hypohidrosis); cloudiness or streaks in the front part of the eye (corneal opacity or corneal verticillata); problems with the gastrointestinal system; ringing in the ears (tinnitus); and hearing loss.

Fabry disease also involves potentially life-threatening complications such as progressive kidney damage, heart attack, and stroke.

Fabry disease is progressive and for this reason early diagnosis is important to manage the symptoms as soon as possible and reduce the risk of developing serious complications. The vast majority of Fabry patients remain undiagnosed due to moderate symptoms. Considering these factors, the global fabry disease market is projected to grow at a healthy 10% CAGR in the coming years.

Brief Overview of PRX-102 For Fabry Disease Clinical Trials
The history of Pegunigalsidase alfa (PRX-102) clinical development is long and I will not bore you with the details, but much has been written about it. I encourage to those interested in the details of the three clinical trials being performed, namely: 1) BALANCE (pivotal), and 2) the BRIDGE and BRIGHT support trials to read the excellent article on the subject written by fello Seeking Alpha contributor The Sensitive Stewart and entitled "Protalix: BRIDGE-ing To BALANCE."

The slide below from the January 2021 Corporate Presentation provides an update on the status of each of the three clinical trials being conducted on PRX-102:


For me, it is helpful to visualize the overall PRX-102 program and as a lead in for the more detailed discussion below (from the February 2021 Corporate Presentation - please note that the BRIGHT study topline results have already been reported and the next update should have another green check mark below it):



Pegunigalsidase alpha (PRX-102) is an investigational enzyme replacement therapy (ERT) designed to compensate for the lack of alpha-galactosidase A (aGAL-A) enzyme in Fabry patients. This new ERT therapy for Fabry diease was developed from Protalix’s plant-based ProCellEx platform, which uses plant cells to produce therapeutic proteins, rather than the commonly used mammalian cells.

PRX-102 was granted orphan drug designation by the European Commission in December 2017. In 2018, the U.S. Food and Drug Administration granted fast-track designation to PRX-102, a move that will speed up the development and review process of the drug.

Protalix reported on August 11, 2020 that the FDA had accepted the Biologics License Application (BLA) and granted Priority Review designation for pegunigalsidase alfa for the proposed treatment of adult patients with Fabry disease. The BLA was submitted via the FDA's Accelerated Approval pathway. Pegunigalsidase alfa is the Company's purposefully designed, long-acting recombinant, PEGylated, cross-linked a-galactosidase-A investigational product candidate. The FDA also indicated in the BLA filing communication letter that it is not currently planning to hold an advisory committee meeting to discuss the application.

Fast forward to December 30, 2020, when the company and commercial partner Chiesi Global Rare Diseases, announced positive final data from the BRIDGE Phase III 12-month, open-label, switch-over clinical trial evaluating pegunigalsidase alfa for the treatment of Fabry disease.

The BRIDGE study was designed to assess the safety and efficacy of PRX-102 in 22 adults with Fabry disease who were previously treated with Replagal, an approved ERT marketed by Takeda Pharmaceutical's (NYSE:TAK). Replagal has estimated sales of about $500M annually.

Two key facts impressed me the most from the December 30, 2020 BRIDGE study press release:

PRX-102 (pegunigalsidase alfa), safely led to significant improvements in kidney function and slowed the progression of kidney disease in men and women previously treated with Replagal.
Another important, and trascendental non-clinical result from these trials is that eighteen of the 22 patients who completed the study opted to roll over to a long-term extension study and continue to be treated with PRX-102 reflecting obvious prefence over Replagal.
Also an important BRIDGE finding was that following the switch to PRX-102, there was a decrease in renal impairment in patients with progressing or fast progressing kidney disease, and most patients achieved a stable status post-switch.
Importantly, and the subject of the Fabry Disease News article highlighting the BRIDGE Phase 3 final analysis results, is that PRX-102 confirmed substantial improvement in renal function as measured by mean annualized estimated Glomerular Filtration Rate (eGFR slope) in patients switched from Replagal to pegunigalsidase alfa (PRX-102).

Dror Bashan, Protalix's President and Chief Executive Officer commented.

"We are excited to have completed the final analysis of our Phase III BRIDGE study. We anticipate that the BRIDGE study results will be used to support the filing of a Marketing Authorization Application (MAA) with the European Medicines Agency, and having completed the analysis, we have taken an important step in the preparations for the application."

On a related note, on October 2, 2020 Protalix announced the launch of an Expanded Access Program (EAP) in the U.S for pegunigalsidase alfa for Fabry diease patients. The BLA for pegunigalsidase alfa is currently under review by the FDA. This EAP will run concurrently with Protalix’s ongoing Phase III clinical program.

More recently, on February 23, 2021, the company announced positive topline results of its BRIGHT Phase III study. This is another significant step in PRX-102's relentless march towards approval on April 27, 2021. These results will also be used to support the filing of a Marketing Authorization Application (MAA) with the European Medicines Agency.

The following are key highlights of the culmination of the BRIGHT Phase 3 clinical trials:

The study achieved key objectives for safety, efficacy and pharmacokinetics;
After completion of the study, all patients decided to enroll in an extension study;
No new patients developed treatment-induced anti-drug antibodies following switch to PRX-102;
This third clinical study results demonstrating positive outcome in support of PRX-102 adds to several successful studies performed previously.
The BRIGHT study which is a phase III, open label, switch over study to assess the safety, efficacy and pharmacokinetics of pegunigalsidase alfa (PRX–102) 2 mg/kg administered by intravenous infusion every four weeks for 52 weeks in patients with Fabry disease currently treated with enzyme replacement therapy (Fabrazyme or Replagal). The trial has recruited Fabry disease patients in the U.S., Canada, and Europe, including the U.K.

The Phase 3 BRIGHT clinical trials were designed to evaluate the safety, efficacy, and overall stability and distribution in the body of PRX-102 in Fabry patients previously treated market leader Fabrazyme (agalsidase beta), marketed by Sanofi (NASDAQ:SNY), or Replagal (agalsidase alpha).

Topline results of the BRIGHT Phase 3 study indicated that 2 mg/kg of PRX–102 administered by intravenous infusion every four weeks was found to be well tolerated among treated patients, and stable clinical presentation was maintained in adult Fabry patients.

Einat Brill Almon, Ph.D., Protalix's SVP and Chief Development Officer commented:

"We are excited to share these topline results from the BRIGHT study, our third consecutive positive clinical trial of PRX–102, following the Phase I/II and the BRIDGE clinical studies. The results indicate that this investigational therapy is well tolerated and potentially an effective treatment for adult patients living with Fabry disease,"

"We are encouraged to see that all of the patients who completed this study chose to enroll in the long-term extension study. Currently, 80% of the patients enrolled in the BRIGHT study have been treated with this treatment regimen for over two years. "

Dror Bashan, Protalix's President and CEO added,
"These results demonstrate the potential of PRX–102 to be an important treatment option for the Fabry community and that the 2 mg/kg of PRX–102 every four weeks regimen may offer meaningful benefits to both patients and physicians. Treating physicians will be empowered with a potential additional treatment regimen, shown to be well tolerated, that they can offer to Fabry patients, pending approval of PRX-102."

"We are gratified to have a strong balance sheet supporting our development efforts and look forward to executing and delivering on a year rich with value-enhancing milestones."

John Bernat, M.D., Ph.D., University of Iowa and a Principal Investigator in the BRIGHT study also was excited about the study results:
"Patients participating in the BRIGHT study have expressed their satisfaction with the once every four weeks regimen. Infusions of 2 mg/kg once every four weeks has the potential to enable patients to maintain their clinical status while reducing their number of treatments by half."
The February 23, 2021 press release details the BRIGHT study protocol and results in detail. I recommend potential PLX investors to take their time reading and understading the implications of what is said in the press release.

Importantly, Einat Brill Almon added:
"Of the 30 patients enrolled, 20 patients remained negative for anti-drug antibodies throughout the course of treatment. Of the 10 patients who were initially positive for anti-drug antibodies, four became negative for neutralizing antibodies at 12 months, suggesting tolerization by these patients. We find this immunogenicity data very encouraging and supportive to the positive benefit-risk profile of PRX–102."

Giacomo Chiesi, head of Chiesi Global Rare Diseases concluded:

"On behalf of our team at Chiesi, we are grateful to the patients, families, and investigators for their time and participation in this study. Their dedication has helped move this Phase III program forward and these topline data are another important milestone in our collected effort to make PRX–102 available to Fabry patients in need as rapidly as possible."

Based on the success of the last two completed Phase III portions of the overall pegulsidase alfa (PRX0102) clinical development program it is likely that after approval PRX-102 will be poise to capture a significant portion of Fabrazyme's and Replagal's Fabry disease market share.

Brief Comments on PRX-102 April 27, 2021 PDUFA Date
Undoubtedly the biggest upcoming milestone for Protalix/Chiesi PRX-102 program is the upcoming PDUFA date. On November 27, 2020, Protalix announced that the FDA had postponed its PDUFA date for Fabry-disease Fast-Track-designated drug candidate Pegunigalsidase alpha (PRX-102). The new PDUFA date was set for April 27, 2021 following company discussions with the FDA regarding travel restrictions that prevented them to inspect manufacturing facilities prior to the original January 27, 2021 PDUFA date.

Most biotech investors know the implications of a PDUFA date, but newbies my not know what it means. In short, if a company gets FDA approval on a breakthrough drug, its stock price is likely to climb as a result. Similarly, stock prices might also rise in anticipation of FDA approval. Knowing that a PDUFA date is imminent can give investors an edge and help them time their upcoming stock purchases.

CEO Bashan, putting everything in perspective, commented the following in his December 30, 2022 letter to Shareholders:

"Following the successful outcome of our Phase I/II clinical study of PRX–102, in May 2020, we, together with Chiesi, submitted the PRX–102 BLA to the FDA. The FDA accepted the filing under its Accelerated Approval pathway and granted Priority Review designation to PRX–102. The action date under the Prescription Drug User Fee Act (PDUFA) for the BLA has been updated to April 27, 2021."

"Fabry disease represents a tremendous opportunity in a multi-billion dollar market ready for a potential better treatment option. We believe PRX–102, if approved, will meaningfully improve the quality of life for many Fabry patients and, together with Chiesi, we are preparing for the anticipated commercial launch."

"Our PRX–102 phase III development program consists of three studies: the BRIDGE study; the BRIGHT study; and the BALANCE study. The BRIDGE and BRIGHT studies have been completed. Topline results of the data generated in the BRIDGE Study, which we released in May this year, showed substantial improvement in renal function, as measured by mean annualized estimated Glomerular Filtration Rate (eGFR slope), and an amelioration of the course of disease in both male and female Fabry patients who were switched from agalsidase alfa to PRX–102. Agalsidase alfa is marketed by Takeda Pharmaceutical Company Limited (Shire Plc) as Replagal®. Earlier today, we announced final results from our BRIDGE study, and we anticipate an announcement of the topline data from our BRIGHT study in the first quarter of 2021. We expect interim results from our BALANCE study in the first half of 2021."

"We look forward to commercializing PRX-102 assuming the anticipated approval of the BLA in the second half of 2021."

Competitive Fabry Landscape/Market Opportunity
To put it in perspective, the current market leader for Fabry disease is Sanofi's (NASDAQ:SNY) well-established enzyme replacement therapy (ERT) Fabry disease treatment progran known as Fabrazyme (agalsidase beta) with annual sales of over $1B in a market expected to grow at about 10% CAGR through 2026. As a comparison, Sanofy's market cap is over $120B and Protalix market cap is only $120M. The Fabry disease market is expected to become a $3-4 billion market by 2025-2026, according to various reports.

The current competitive landscape is depicted in the following slide extracted from the company's February 2021 Corporate Presentation:



One might think that Amicus' (NASDAQ:FOLD) Galafold should have the largest market share because it is an oral drug versus the IV-infused Fabrazyme, making it more convenient for patients, although not every Fabry patient will be eligible. Galafold specifically treats adults with certain variants of a rogue gene and works by boosting the body’s missing enzyme rather than replacing it in patients. An estimated 35% to 50% of Fabry’s disease patients with an amenable galactosidase alpha gene mutation would be eligible for the treatment

Takeda's Replagal is not approved in the US but it is approved for used in the European Union.

The main advantages of PRX-102 over Fabrazyme are stability and immunogenicity. Regarding stability, the half-life of PRX-102 is about 40 times higher than Fabrazyme's and for this reason patients can be administered the therapy monthly instead of by-weekly. This is a huge advantage because it minimizes patient's exposure to other diseases while improving patient's quality of life and minimizing costs as well as minimizing the burden on patient's caregivers.

Regarding immunogenicity, most Fabrazyme-treated patients tend to produce a significant antibody response to the drug over time, causing buildup of the drug in the kidneys, which can lead to kidney damage. In clinical trials, PRX-102 has shown to that only about 1 in 5 patients on the drug produce a significant antibody response to it. More importantly, those 20% of patients shown to develop antibodies had them gone after a year of therapy. The occurrence of antibodies results in hypersensitivity reactions in patients, often necessitating lengthening of infusion time and/or the use of premedications such as antihistamines or corticosteroids. This is also a huge advantage over Fabrazyme and other competing drugs.

Regarding pre-marketing afforts, partner Chiesi Global Rare Diseases is so confident that pegunigalsidae alfa (PRX-102) will be approved that they have launched an aggressive educational campain named "Rethink Fabry" for people with Fabry and their families, as a preemptive strike to make a dent in Fabrazyme stronghold in this fast growing market ahead of product launch. The company is also offering educational webinars for the medical community as well as for Fabry patients and their families.

Potential Advantages of Pegunigalsidase Alfa (PRX-102) for Fabry Patients
The following slide from the company's February 2021 corporate presentation summarizes the benefits of PRX-102 for Fabrt patients and over major Fabry competitors Fabrazyme and Replagal:


Pipeline
The slides below will show the company's current pipeline and the progress it has made in the various ongoning clinical and preclinical programs. Besides Fabry, Protalix has attractive candidates por pulmonary ailments such cystic fibrosis and sarcoidosis, gout, and inflammatory bowel disease, and others in preclinical stage.

On July 21, 2020, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for alidornase alfa for the treatment of Sarcoidosis. The FDA grants Orphan Drug Designation to drugs or biologics intended to treat or prevent rare diseases or conditions that affect fewer than 200,000 individuals in the United States.

Speaking of sarcoidosis, the company announced on February 11, 2021 that it has signed an exclusive worldwide license agreement with SarcoMed USA Inc. for alidornase alfa, or PRX–110, for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled delivery. Alidornase alfa is the Company's proprietary chemically-modified plant cell–expressed recombinant form of human deoxyribonuclease I (DNase I), administered through inhalation. SarcoMed USA was formed in 2017 to investigate if a novel DNase 1 compound could influence the chronic pulmonary inflammation seen in pulmonary sarcoidosis patients.

The press release stated:

"Under the terms of the agreement, SarcoMed will be responsible for the identification and selection of pharmaceutical candidates under the license, and the clinical research and development of such candidates. Protalix is entitled to an initial cash payment of $3.5 million, subject to certain conditions, and to additional regulatory and commercial milestone payments and tiered royalties on net sales of products that are commercialized under the license agreement. In addition to the foregoing, the parties have agreed to commence negotiation of clinical and commercial supply agreements for alidornase alfa. "

On July 21, 2020, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for alidornase alfa for the treatment of sarcoidosis. The FDA grants Orphan Drug Designation to drugs or biologics intended to treat or prevent rare diseases or conditions that affect fewer than 200,000 individuals in the United States.
The following slide depicts the current pipeline:



Protalix, being now well funded following the recent $40M equity raise, is likely to focus on advacing the rest of the pipeline and those programs currently being worked in preclinical trials going forward. There has been significant progress in this area since CEO Bashan took over but it has gone unnnoticed with investors' focus on PRX-102 PDUFA and subsequent commercialization. The following slides summarize some of the pipeline programs being advanced and their features:





I am almost certain that Protalix management is actively looking for partners to develop these assets. Partnership/collaboration announcements will be made when investors least ecpect.

Current and Upcoming Catalysts and Milestones
In addition to participating in numerous investors' conferences throughout 1Q and 2Q 2021, an upcoming 1Q 2021 catalyst for Protalix is a strong 4Q 2020 financial report. The company's 3Q 2020 Gaucher-related revenues were $3.3M compared to revenues of $5.1M for the same period of 2019. According to the company, the decrease was caused to the timing difference in sales to Brazil in 2020 compared to 2019. In 2019, Gaucher shipments were scheduled for the third quarter but this year they have been scheduled for the fourth quarter.

Protalix is improving its revenue stream from sales of its FDA approved drug (with Pfizer (NYSE:PFE)) for Gaucher disease in Brazil. Regarding Gaucher drug sales, Pfizer has global marketing rights except for Brazil. Protalix manufactures the Gaucher drug for Pfizer using its proprietary ProCellEx drug development and manufacturing platform. The PLX/PFE Gaucher drug was approved in 2012. Revenues for 2019 were $9.1M and are expected to increase by 10 - 15%/year as seen in the following slide:



The following slide from the company's February, 2021 Corporate Presentation highlights the catalyst/milestone highlights:

Protalix still has more Phase III data after the April 27, 2021 PDUFA deadline. In the pivotal Phase 3 BALANCE clinical trials patients are being evaluated on a head-to-head comparison study of Fabrazyme vs. PRX-102. The results of this important study are expected to be announced during 1H 2021.

Comments on Valuation
Protalix has a deal is in place with Chiesi Global Rare Diseases, a business unit of Chiesi Farmaceutici S.p.A., an international research-focused healthcare group (Chiesi Group). Per the existing deal between the two companies, Chiesi will grant Protalix 15-35% royalties outside the United States and 15-40% royalties in the US. Plus, Chiesi has committed to grant Protalix up to $1B in milestone payments and $45M in development reimbursement upon approval.

For more details regarding valuation, I will quote below a few paragraphs from the excellent article on Protalix written by fellow Seekingalpha contributor Ari Zoldan and entitled: "Protalix Could Claim Substantial Global Market Share In Fabry Disease":

"Protalix has entered into two exclusive global licensing and supply agreements for PRX-102 for the treatment of Fabry disease with Chiesi. The agreements have significant revenue potential for Protalix. Under the agreements, Protalix Ltd. has received $50.0 million in upfront payments and was entitled to development cost reimbursements of up to $45.0 million, up to more than $1.0 billion in potential milestone payments and tiered royalties of 15% - 35% (ex-US) and 15% - 40% (US).”

"Since the milestone payment structure is not known nor the tiered royalty structure, an estimate with respect to peak sales can be made based on converting some portion of the 40% of ADA+ Fabrazyme and Replagal patients to PRX-102. This is meant to be a conservative estimate. First, it's possible physicians and specialists will realize that PRX-102 is a potentially superior ERT that can either be dosed monthly instead of biweekly, and it can also potentially better preserve kidney function. So, while PRX-102 may be applicable to all Fabry disease patients, it will be much more important for those who have declining health. Additionally, Protalix might face substantial commercial competition from upcoming gene therapy products."

"While substrate therapy or chaperone therapy may be dosed concurrently with ERT (more likely substrate therapy), these products may limit the market penetration of PRX-102. Thus, the following assumptions are made:

Total ERT sales of $1.5 billion, sales price equivalent to current ERT

20% peak market penetration (rather than 40%) of ERT

Sales ramp of 5 years

Discount rate of 15%

80% margin after tax

Average royalty rate of 20% (conservative)

P/E ratio of 15

Diluted shares of ~50 million total

70% probability of approval

NOLs not taken into account

"Thus, peak sales might be $300 million. This yields an estimated value of $900 million in royalties to Protalix before tax, which, discounted 6 years to the present and discounting for regulatory risk, equals $218 million. That doesn’t take into account the potential ~$1 billion in milestone payments. Using ? the value of the potential milestone payments (estimated discount for regulatory risk, commercial risk, and time value of money), Protalix is estimated to be worth $551 million, or $11 per share. The shares do, therefore, appear undervalued given the company has a marketed product for Gaucher, which Pfizer (PFE) was sold all the commercial rights to ex-Brazil, and Protalix brings in about $9-10 million in revenue from Brazil. Additionally, the company has other pipeline candidates."

The valuation on PLX shares increased from $11/share to $13/share following Zacks' new coverage on PLX shares dated January 7, 2021 with a $15/share price target.

Zacks' Key reasons to own Protalix shares:

PRX-102 on cusp of commercialization
Target action date: April 27, 2021
Potential for superiority vs market leader Fabrazyme
Improved efficacy
Longer duration between infusions
Existing sales and royalty revenues from taliglucerase alfa Pfizer, globally, Fiocruz, Brazil
Maintain regulatory approved plant-based expression system
Orphan status granted for PRX-102
Partnership with Chiesi for global commercialization of PRX-102 in Fabry Disease
Rights to significant milestones and royalties
It is likely that the new buying in the last three days was related to those who received and read Zacks coverage on PLX shares.

The following slide from the February 2021 Corporate Presentation highlights the PRX-102 Protalix-Chiesi deal. If it wasn't obvious up to this point, the slide shows that Protalix is not going alone commercializing PRX-102. The company inked a lucrative deal with Chiesi whereby it will get up $1 billion in milestone payments and tiered royalty payments of up to 35% in the US and up to $40% of revenues ex-US:



Investment Highlights
The company's February 2021 Corporate Presentation lists several compelling reasons why investing in PLX shares at current prices is low risk and high upside:



Insider and Institutional Ownership
Fintel reports that Protalix BioTherapeutics insiders own 19% of the company, worth about $22M. The largest recent insider buying was made by Director Aharon Schwartz bought $155K worth of shares. This level of insider ownership ranks among the top 25% biotechs with a market cap of less than $200M. Fintel also shows that several institutions reported significant ownership in 2020. I expect more institutions to jump in the banwaggon ahead of the April 27, 2021 PDUFA date with destiny:



Financial Position
At September 30, 2020 the company had $41M in cash and cash equivalents. This means that the company probably ended 2020 with about $35M cash based on recent cash burn. With the $3.5M received from Sarcomed and the proceeds of $40M from the equity raise announced in February 18, 2021, Protalix has almost $80M in cash and cash equivalents. This amount of cash provides a runway at least until 3Q 2023 not including the potential $1 billion in royalties expected from Chiesi upon the approval of PRX-102. Also important is to note that Protalix will receive from 15% to 40% in PRX_102 royalties.

In a recent TV interview from Israel CEO Dror Bashan commented: "If we get the approval in April - we will be a company on a completely different scale." In the interview CEO Bashan compared PLX to an IPO conducted at a serious discount.

In the interview CEO Bashan also explained why he raised capital that caused the stock to fall.

"The intention was to raise so we could continue to invest in the company until the drug for Fabry arrives for approval as scheduled in April 2021."

In case FDA approval is indeed received on schedule, CEO Bashan estimates the stock will rise significantly and most of the debt will be converted .

Once the approval is given, the drug is ready to launch and start sales and Bashan expects Protalix to become a "completely different company."

Importantly, CEO Bashan also said that the FDA implied that they have a strong desire to put their drug on the market. Additionally, Protalix is ??waiting for Phase 3 BALANCE clinical trial results which aims to prove clinical superiority over the currently leading drug (Fabrazyme). If that happens he says "the sky is the limit....we could reach a billion dollars in sales yearly."

Conclusions
I expect the awareness about the potential significant upside being offered by PLX shares relative to today's depressed price should increase exponentially with each passing week as we approach the April 27, 2021 PDUFA date for PRX-102.
The downside of a potential PDUFA delay is very limited as the company has about $80M in cash and it's funded to 3Q 2023 with the recent $40M equity raise that closed on February 18, 2021. This does not include the potential $1 billion in milestones expected from Chiesi upon the approval of PRX-102. Also important is to note that Protalix will receive from 15% to 40% in PRX_102 royalties.
In a recent TV interview from Israel CEO Dror Bashan commented: "If we get the approval in April - we will be a company on a completely different scale." In the interview CEO Bashan compared PLX to an IPO conducted at a serious discount. In the interview CEO Bashan also explained why he raised capital that caused the stock to fall. "The intention was to raise so we could continue to invest in the company until the drug for Fabry arrives for approval as scheduled in April 2021." In case FDA approval is indeed received on schedule, CEO Bashan estimates the stock will rise significantly and most of the debt will be converted .Once the approval is given, the drug is ready to launch and start sales and Bashan expects Protalix to become a "completely different company." Importantly, CEO Bashan also said that the FDA implied that they have a strong desire to put their drug on the market. Additionally, Protalix is ??waiting for Phase 3 BALANCE clinical trial results which aims to prove clinical superiority over the currently leading drug (Fabrazyme). If that happens, he says "the sky is the limit....we could reach a billion dollars in sales yearly."
On February 23, 2021, the company announced positive topline results of its BRIGHT Phase III study. This is another significant step in PRX-102's relentless march towards approval on April 27, 2021. These results will also be used to support the filing of a Marketing Authorization Application (MAA) with the European Medicines Agency.
On December 30, 2020 Protalix announced positive final analysis results from its Fabry disease BRIDGE study confirming substantial improvement in renal function in patients switched from Takeda’s Replagal to PRX-102.
Importantly, of the 22 patients who completed the study, eighteen of them opted to roll over to a long-term extension study and continue to be treated with PRX-102.
Following the switch from Replagal to PRX-102, there was a decrease in patients with renal impairment progressing or fast progressing kidney disease, and most patients achieved a stable status post-switch.
Protalix is improving its revenue stream from sales of its FDA approved drug for Gaucher disease in Brazil. Revenues for 2019 were $9.1M and are expected to increase by 10 - 15%/year. Gaucher-related revenues are expected to be strong in 4Q 2020 because of the timing of shipments of this drug to Brazil.
Partner Chiesi Global Rare Diseases is so confident that pegunigalsidase alfa (PRX-102) will be approved that they have launched an aggressive educational campaign named "Rethink Fabry" for people with Fabry and their families, as a preemptive strike to make a dent in Fabrazyme stronghold in this fast growing market ahead of product launch.
Besides improved kidney function, one of the advantages of PRX-102 over Fabrazyme are stability. The half-life of PRX-102 is about 40 times higher than Fabrazyme's and for this reason patients can be administered the therapy monthly instead of by-weekly. This is a huge advantage because it minimizes patient's exposure to other diseases while improving patient's quality of life and minimizing costs as well as minimizing the burden on patient's caregivers.
Regarding immunogenicity, most Fabrazyme-treated patients tend to produce a significant antibody response to the drug over time, causing buildup of the drug in the kidneys, which can lead to kidney damage. In clinical trials, PRX-102 has shown to that only about 1 in 5 patients on the drug produce a significant antibody response to it. More importantly, those 20% of patients shown to develop antibodies had them gone after a year of therapy.
FDA-approved Galafold should have the largest market share because it is an oral drug versus the IV-infused Fabrazyme, making it more convenient for patients, although not every Fabry patient will be eligible. Galafold specifically treats adults with certain variants of a rogue gene and works by boosting the body’s missing enzyme rather than replacing it in patients. An estimated 35% to 50% of Fabry’s disease patients with an amenable galactosidase alpha gene mutation would be eligible for the treatment.
The other compettion for PRX-102, Takeda's Replagal, is not approved in the US but it is approved for used in the European Union. Furthermore, the BRIDGE trial results showed that 82% of the patients in that trial decided to stay with PRX-102 thus abandoning their Replagal treatment.
The bottom line thus far is that PRX-102 has shown to offer significant advantages for Fabry patients over their largest potential competitors in the Fabry disease area regarding several key performance indicators (side-by-side and/or replacement trials).
In summary, the company’s Fast-Track-designated PRX-102 for Fabry disease PDUFA date has been set for April 27, 202. If approved, PRX-102 could become the market leader in the $4B/year Fabry market currently led by Sanofi's Fabrazyme and growing at a 10% CAGR. Protalix currently enjoys a BUY rating with a consensus $13/share price target. Insiders and institutions own about 50% of common shares.
Protalix is not going alone commercializing PRX-102 as I mentioned several times in this article. In a nutshell, the company inked a lucrative deal with Chiesi whereby it will get up $1 billion in milestone payments and tiered royalty payments of up to 35% in the US and up to $40% of revenues ex-US.
The valuation on PLX shares increased from $11/share to $13/share following Zacks' new coverage on PLX shares dated January 7, 2021 with a $15/share price target.
Zacks initiated coverage on PLX on January 7, 2021 with a $15/share price target.The FDA has set the company’s Fast-Track-designated drug candidate PRX-102 for Fabry disease PDUFA date for April 27, 2021. If approved, PRX-102 or pegunigalsidase alfa, could become the market leader in the $4B/year Fabry market currently led by Sanofi's Fabrazyme and growing at a 10% CAGR.
I encourage investors interested in purchasing PLX shares to read the related risks and uncertainties as detailed in the company's most recent filings with the SEC.
Disclosure: I am/we are long PLX.

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