Six years have passed since a strategic agreement between pharmaceutical giant Pfizer and Israel company Protalix Biotherapeutics Inc. (NYSE MKT:PLX; TASE: PLX) for Protalix's product for treatment of Gaucher's disease was signed. Since that time, Protalix has replaced its management and changed its business strategy, and today announced the effective termination of the agreement, the results of which failed to live up to the high expectations.
Protalix is selling its share of the cooperation agreement on the Elelyso drug for $36 million in cash. Pfizer will also invest $10 million more in Protalix for 6% of the Israeli company's share capital.
The investment comes at a 64% premium on the market price: Pfizer will pay $1.77 per share, compared with Protalix's $1.08 share price, which has fallen 41% this year, pushing the company's market cap down to $101 million. Since the agreement with Pfizer was signed in 2009, the Protalix share has lost 85% of its value. The Protalix share price responded to the news today with a leap of nearly 15% on the TASE.
"We're very satisfied with Pfizer's support as a shareholder in the company. The proceeds we'll get from the deal total $46 million, which will significantly boost our cash balance and give us a pro forma balance of $80 million. That will enable us to press forward with the products in the company's development pipeline and focus on its new strategy of developing biological products with an improved clinical profile," said Protalix president and CEO Moshe Manor. "In addition, we're very glad to build our existing partnership with Pfizer, after they demonstrated their commitment to Gaucher's patients and their attending doctors."
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2015
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