Why Protalix BioTherapeutics Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotechnology company Protalix BioTherapeutics (NYSEMKT: PLX  ) exploded higher today by as much as 25% following confirmed reports from the company that it's hired Citigroup to explore strategic alternatives.

So what: As reported by Israeli website Calcalist, Protalix could be in talks with Pfizer (NYSE: PFE  ) for a buyout totaling around $1 billion. The website goes on to mention that Pfizer has shown interest in purchasing Protalix, but not at the price point that Protalix's management is seeking. A quick snippet from Briefing.com later confirmed Protalix's strategic plans to seek product or technology partnerships.

Now what: On paper, a Pfizer buyout would make sense given that the two collaborated to develop Elelyso, an FDA-approved treatment of type 1 Gaucher disease. Pfizer would be able to simply avoid a revenue share and bring the entire revenue stream under its roof. However, orphan drugs often come with hefty price tags and selling them to physicians and patients isn't always easy, so Pfizer has to be careful not to overpay for Protalix if it does decide to make a bid. Personally, this is a situation I'd avoid as I see Protalix as fully valued already.

Craving more input? Start by adding Protalix BioTherapeutics to your free and personalized watchlist so you can keep up on the latest news with the company.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. In our free report "3 Stocks That Will Help You Retire Rich," we name stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2237204, ~/Articles/ArticleHandler.aspx, 4/24/2014 11:20:55 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement