Protalix Biotherapeutics Inc. (AMEX:PLX; TASE: PLX) today reported sales of its treatment for Gaucher's disease in Israel, but its joint venture with Pfizer Inc. (NYS:E PFE; LSE: PFZ) for the sale of the drug in the US and Brazil, is struggling
Protalix's revenue fell to $2.3 million for the third quarter from $3.7 million for the corresponding quarter of 2012. The third quarter revenue included $1.4 million from sales of its Gaucher's disease treatment in Israel, with deferred payments from Pfizer's $65 million down payment when they signed the cooperation agreement, accounting for most of the rest. Protalix's share of the revenue from the joint venture with Pfizer fell to $1.1 million for the third quarter from $1.7 million for the corresponding quarter, as the venture is apparently unable to get off the ground.
Under the cooperation agreement with Pfizer, Pfizer makes 60% of the revenue and Protalix makes 40%, but each company deducts its share of the costs. It is unclear exactly which costs Protalix bears, or their total, so it is not possible to know the amount of sales of the drug, although they can be estimated at several tens of millions of dollars.
Previous statements by Protalix that the venture's marketing costs would fall and revenue from it would rise have not materialized. If the company's profits from the venture do not exceed a few million dollars per quarter, it will be a major disappointment compared with the company's expectations.
Protalix and Pfizer are jointly selling the drug only in the US and Brazil, but entry to new territories may improve the situation. Protalix's revenue from the venture in Brazil, which are calculated differently from revenue in the US, should come into effect in the fourth quarter of 2013.
Protalix's net loss widened to $5.7 million ($0.06 per share) from $5.5 million for the corresponding quarter. The company had $91 million in cash at the end of September, up from $52 million a year earlier, enough capital to move forward on its clinical plans for the foreseeable future.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2013
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