The trend is definitely the friend of shareholders in Protalix
Biotherapeutics (
PLX
,
quote
), an Israeli health care biotech stock and attractive takeover
target.
Protalix is trading well above its 20-day, 50-day and 200-day
moving averages. Year to date, Prolix is up 34.69%. Protalix is
attractive on its merits as a business and also for its
appeal as a takeover target.
What sets Protallix apart from other biotechnology companies
and also makes it an attractive takeover target is that it
utilizes a plant-based process for manufacturing biotherapeutics.
According to the company website:
"ProCellEx® is a next-generation recombinant protein
expression system that uses advanced genetic engineering and
plant (carrot and tobacco) cell culture technology instead of the
traditional mammalian- or yeast-based systems, enabling the
production of a wide range of complex, proprietary and
biologically equivalent human proteins to address a variety of
diseases. Protalix's novel bioreactor system, based on disposable
plastic bags, is the first of its kind. The closed system
provides stable, optimized conditions, with manufacturing
capabilities for the entire range of proteins, including
antibodies, complex enzymes, and plant-derived
pharmaceuticals."
There are significant advantages to this. This process allows
for human proteins to be developed at much lower production
costs, both in terms of human capital and financial capital. Most
important of all, it works in the development of new products.
The Food and Drug Administration in the United States has granted
approval to ELELYSO.
Protalix to develop more plant cell drugs says CEO
Prolix also has in its new product pipeline: PLX-106. That is
"a plant cell-expressed recombinant anti-TNF fusion protein being
developed to address autoimmune indications, including rheumatoid
arthritis." Of note is that PLX-106 has the potential to be a
generic equivalent to Enbrel, a multi-billion dollar product and
one of the largest selling drugs in the world for Amgen (
AMGN
,
quote
).
What is significant for investors is that ELELYSO was the
result of a partnership between Prolix and Pfizer (
PFE
,
quote
). Prolix also works on a products in partnership with Teva
Pharmaceuticals (
TEVA
,
quote
), an Israeli pharmaceutical concern that happens to be
the largest generic drug firm in the world
. Teva Pharmaceuticals also happens to have a track record of
acquiring smaller biotechnology entities to fill in its
new product pipeline. So do Pfizer and Amgen,
among many other Big Pharma companies.
With a robust new product pipeline, approval from the Food and
Drug Administration for ELEYSO, and partnerships with
acquisition-hungry pharmaceutical giants, Prolix is an obvious
takeover target. On its own, the stock has upside. Now trading
around $6.65 a share, the mean analyst target price over the next
year for Prolix is $9.33. It also receives a very bullish mean
analyst rating of 1.60 (5 is the worst, 1 is the best).
