Here’s Why Protalix (PLX) Stock Is Soaring Today

Protalix’s (NYSE:PLX) long-suffering bulls finally have reason to celebrate: The Israeli biotech firm announced this morning the expansion of its partnership with Chiesi. Protalix and Chiesi entered into an exclusive U.S. license and supply agreement which grants to Chiesi the U.S. rights for the development and commercialization of PRX-102 (pegunigalsidase alfa), Protalix’s chemically modified version of the recombinant protein alpha-Galactosidase-A protein, for the treatment of Fabry disease.

Under the terms of the U.S. license and supply agreement, Protalix is entitled to an upfront payment of $25 million from Chiesi and additional payments of up to a maximum of $20 million in development costs, capped at $7.5 million per year. Protalix is also eligible to receive an additional up to a maximum of $760 million, in the aggregate, in regulatory and commercial milestone payments, and tiered royalties ranging from 15% to 40% on net sales as consideration for product supply. Protalix will continue to be the manufacturer of PRX-102 for clinical development and commercial purposes.

Protalix CEO Moshe Manor commented, “We are very pleased to expand our collaboration with Chiesi, a growing global company with well-established global commercial infrastructure with a fast growing commercial presence in the U.S. Chiesi’s global investment of $95 million in upfront payments and development costs reimbursement, and additional up to a maximum of $1 billion in potential milestone payments, combined in the two agreements reflects Chiesi’s true commitment to the Fabry space […] Taking into consideration a $25 million upfront payment and shared development expenses, we expect our cash runaway to take us through the read outs of all of the Fabry clinical trials.”

Chiesi CEO Ugo Di Francesco added, “We believe PRX-102 has the potential to transform the treatment of Fabry disease and are excited to now have exclusive commercial rights to PRX-102 worldwide […] The more we work with Protalix and see the progress made in the development and the product’s characteristics, it becomes abundantly clear the significant role PRX-102 could have in the underserved Fabry market and to potentially change the treatment paradigm to the benefit of all stake holders. We believe this U.S. license agreement will bring many synergies in our fast growing U.S. presence in rare diseases.”

H.C. Wainwright Ram Selvaraju recently commented, “We note that the company closed the quarter with $41.3M in cash and appears reasonably well-positioned to fund the clinical development of PRX-102, its lead clinical-stage candidate for the treatment of Fabry disease […] Our model yields an rNPV of $440M for PRX-102 using a 15% discount rate and 75% probability of approval.”

Selvaraju rates PLX a Buy with a price target of $5.00, which implies a huge upside of over 1000% from yesterday’s closing price. (To watch Selvaraju’s track record, click here)

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