Approvable, Just Not Approved

You win some, you lose some. And sometimes you do both.

Protalix BioTherapeutics (NYSE: PLX  ) and Pfizer's (NYSE: PFE  ) Gaucher disease treatment, taliglucerase alfa, was given a positive assessment by the European Medicines Agency's Committee for Medicinal Products for Human Use, or CHMP. But the agency didn't recommend that the drug be approved.

It appears the EU agency is following the letter of the law, which gives Shire Pharmaceuticals (Nasdaq: SHPGY  ) a 10-year exclusivity on Gaucher disease treatments after its 2010 approval of Vpriv. The exclusivity is a result of Vpriv's orphan drug status, which provides exclusivity as an incentive to develop drugs for rare diseases.

Pfizer and Protalix could have gotten around the exclusivity if they could have shown that taliglucerase was superior to Vpriv or that there was a supply constraint of Gaucher drugs that taliglucerase could fill. CHMP concluded that neither was the case.

The next step is for the EMA to ratify CHMP's recommendation, although Pfizer and Protalix can -- and probably will -- appeal the decision. The company's best option might be to sit tight and hope the supply becomes constrained again. A few years ago, Genzyme, now part of Sanofi (NYSE: SNY  ) , ran into problems making its Gaucher treatment, Cerezyme, and is just now recovering.

Pfizer and Protalix's drug was recently approved in the U.S., where Cerezyme remains supply constrained. Once the Sanofi gets Cerezyme back to full production, the companies plan to compete on price; the drug, which goes by the brand name Elelyso, will be 25% cheaper than Cerezyme.

Considering their moves in the U.S., Pfizer and Protalix might not be missing all that much by not gaining approval in the EU, where the profit margins tend to be slimmer. Competing in the EU would probably be an even tougher task than the duo faces in the United States.

I guess we'll find out in eight years, when Shire's exclusivity runs out.

This rule-breaking multibagger has the potential for mind-blowing growth. Find out the name of the company and why Fool analysts like it so much in the free report, "Discover the Next Rule-Breaking Multibagger."

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio Motley Fool newsletter services have recommended buying shares of Pfizer. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (1)

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.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1923852, ~/Articles/ArticleHandler.aspx, 10/21/2014 7:11:14 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