Protalix seeks to sell Gaucher's disease treatment in Europe

The market potential is estimated at $300 million a year.

Protalix Biotherapeutics Inc. (AMEX:PLX) has submitted a marketing authorization application to the European Medicines Agency (EMEA) for its treatment for Gaucher's disease. The EMEA is due to reply within a year at the most, but could respond sooner, especially of the company obtains US Food and Drug Administration (FDA) approval of the drug in February, as expected.

The fincidence of Gaucher's in Europe is the same as in the US. Protalix estimates that 1,500-2,000 Europeans suffer from the disease.

Protalix's rivals, Genzyme Inc. (NYSE: DNA) and Shire Pharmaceuticals Group plc (LSE: SHP), already operate in Europe. However, Shire only has enough production capacity to treat 800 patients, while Genzyme, which has suffered from a temporary shortage of its product for the past year, preferred to first treat the US market, and lost strength in Europe.

In some European countries, treatments for Gaucher's disease are purchased by the government, which makes it possible to capture an entire national market with a single contract. The downside of this structure is the price, which is less in Europe than in the US, and the bargaining power of a single buyer can push the price even lower.

Harel Finance analyst Steven Tepper believes that, whereas the price of Genzyme's treatment for Gaucher's disease in the US is $250,000 per patient per year, the price in Europe will be lower. He believes that Protalix, which has already announced that it will use the price of its treatment as a competitive tool, will charge $150,000-200,000 per patient per year, giving a market potential of $300 million a year.

Tepper says, "I believe that the European market is accessible and interesting for Protalix, no less and possibly more than the US market. I estimate that, in the long term, only 25% of Protalix's revenue from sales of its Gaucher's treatment will come from the US."

Protalix's share opened at $8.37 on the American Stock Exchange today, giving a market cap of $680 million.

Sources close to the company said that Protalix and Pfizer Inc. (NYSE: PFE; LSE: PFZ) intended to storm the European market as quickly as possible when the EMEA market approval is granted, assuming it is.

Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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