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What: Shares of biopharmaceutical company Protalix BioTherapeutics (AMEX: PLX ) soared as much as 24% earlier in the trading session after the company received favorable news from the Food and Drug Administration.
So what: Protalix and development and marketing partner Pfizer (NYSE: PFE ) yesterday evening announced the approval of Elelyso as a treatment for Gaucher's disease. Under their collaborative agreement, Protalix retains commercialization rights exclusively in Israel, while Pfizer has commercialization rights elsewhere. Other than Elelyso, there are only two other treatments marketed to treat Gaucher's disease -- Cerezyme by Sanofi (NYSE: SNY ) (originally developed by Genzyme), and VPRIV, owned by Shire Pharmaceuticals. Protalix plans to market Elelyso in the U.S. at a cost that is 25% cheaper than Cerezyme.
Now what: I'll give Protalix a golf clap for today's approval, and certainly those afflicted with Gaucher's disease have to be thrilled with the new treatment option, but Protalix is one of the worst destructors of shareholder wealth in the biotech sector, and I've never forgotten that. In October 2007, the company priced a secondary offering more than 85% below its previous day's closing price. Even recently, in February 2012, the company priced yet another 4.5 million shares at 14% below the previous day's close. Between the accumulated deficit and the company's penchant for diluting shareholders to death, I'm staying as far away from Protalix as I possibly can.
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