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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.
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