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PLX: A Busy Month

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·10 min read
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By John Vandermosten, CFA

NYSE:PLX

READ THE FULL PLX RESEARCH REPORT

Over the last few weeks, Protalix Biotherapeutics, Inc. (NYSE:PLX) has posted several updates includ-ing the announcement of pricing and closing of its ~$40 million financing. The company has also con-summated an exclusive partnership with SarcoMed USA, presented BRIDGE data at the 17th Annual WORLDSymposium and reported topline results from the BRIGHT trial. The successful closing of the public offering removes the refinancing overhang related to the repayment of the $57.9 million of con-vertible notes that are due in November 2021 and favorable results from BRIGHT provide another pillar of support for patients to prefer PRX-102 over Fabrazyme and Replagal.

BRIGHT Topline Results

On February 23, 2021, Protalix announced topline results for its Phase III BRIGHT open-label, switch-over trial of PRX-102 in Fabry Disease. BRIGHT is the third Phase III clinical trial of PRX-102 for the treatment of Fabry disease. The trial was completed in July 2020.

BRIGHT was a 12-month, open-label switch-over study designed to assess the safety, efficacy and pharmacokinetics of PRX-102 via intrave¬nous infusions of 2 mg/kg administered every four weeks in up to 30 patients with Fabry disease. The patients had been previously treated with ERT (Fabrazyme or Re-plagal). The rationale for this open-label switch-over study was based on the pharmacokinetic profile of PRX-102. Phase I/II study data suggested that 2.0 mg/kg every four weeks would be effective in mild to moderate Fabry patients. The dosing regimen served as maintenance ERT for mild to moderate Fabry patients without severe clinical symptoms and with relatively slow disease progression, with oppor¬tunity to manage. To determine eligibility for participation in the study, candidates were screened to identify and se¬lect Fabry patients with a relatively stable clinical presentation and a slow disease progression. Patients who matched the criteria were enrolled in the study and switched from their current treatment of biweekly intravenous in¬fusions to monthly 2 mg/kg of PRX-102 for 12 months.

Plasma Drug Concentration vs. Time (1)

Patients participating in the study were evaluated for various disease-related clinical symptoms and bi-omarkers, including rate of deterioration of the kidneys, while being treated with the once-monthly dosing regimen. Safety and tolerability of PRX-102 was also assessed. In February 2019, Protalix presented preliminary pharmacokinetic data from BRIGHT. The results demonstrated that PRX-102 was present and remained active in the plasma over the every 4 weeks infusion intervals. The mean concentration of PRX-102 at day 28 was 138 ng/mL, showing that it was still present in the blood. In comparison, pub-lished data on Fabrazyme (1 mg/kg every 2 weeks) shows a mean concentration of 20 ng/mL at 10 hours post infusion. In addition, the area under the curve (AUC) for PRX-102 was measured to be approximate-ly 2,000,000 ng hr/mL over 28 days. Based on published data, the AUC of Fabrazyme is approximately 10,000 ng hr/mL. The AUC is a measure of both the duration and magnitude that a patient is exposed to a therapy. A preliminary safety analysis of 19 patients enrolled in the BRIGHT study was also conducted and indicated that PRX-102 was well tolerated.

Topline results for BRIGHT revealed that the study had achieved key objectives in safety, efficacy and pharmacokinetics. 2 mg/kg monthly intravenous dosing was well tolerated among treated patients with 80% treated now for over two years. The enrolled patients maintained a stable clinical presentation. New patients did not develop treatment-induced anti-drug antibodies following switch to PRX-102. Of the 30 patients, 20 remained negative for anti-drug antibodies throughout the course of treatment. Four of the 10 patients initially testing positive became negative at 12 months. All patients elected to enroll in the extension study suggesting patient satisfaction with the enzyme. The trial enrolled 30 adult patients, 26 male and six female, with 29 completing. 28 patients received the 2 mg/kg monthly as intended, with one patient switched to 1mg/kg PRX-102 every two weeks according to protocol. The patient that with-drew from the study did so for reasons unrelated to the trial. Subjects received treatment at first under controlled conditions of the clinical site, but later at home as approved by the Investigator and Sponsor Medical Monitor. Upon completion, patients would receive 14 doses in total over the 13 four-week peri-ods. Study outcomes revealed plasma lyso-GL-3 concentrations remained stable during the study with lyso-GL-3 concentrations increasing only 3.01 nM from baseline to week 52, 19.36 nM and 22.23 nM, re-spectively. Likewise, eGFR values were stable during the treatment period with mean change from base-line of -1.27 mL/min/1.73 m2. Principal Investigator for the study, Dr. John Bernat, reported that patients had expressed satisfaction with the once per four-week dosing scheme, and that the treatment regimen had “potential to enable patients to maintain their clinical status while reducing their treatments by half (2).” Patients were also surveyed using the Quality of Life EQ-5D-5L questionnaire. Patient perception of their own health remained high and stable throughout the 52-week duration with overall health mean scores of 78.3 and 82.1 at baseline and week 52, respectively. The short-form Brief Pain Inventory questionnaire revealed that about 75% of participants had at least no change in average pain severity at week 52 com-pared to baseline. Interference items, a measure of the disease effect on daily activities, on the same questionnaire also remained stable during the study. Finally, Protalix reported that there were no Fabry clinical events during the study. Protalix expects final data on BRIGHT in 2H:21, and to present findings at an appropriate conference.

The positive data from the BRIGHT trial is supportive of the use of PRX-102 as a replacement for Fabra-zyme and Replagal as it reduces the number of intravenous infusions needed while providing similar lev-els of efficacy and an improvement in eGFR slope.

Public Offering

On February 11, 2021, Protalix both proposed a public offering of common stock and announced its pricing. The company planned to issue 7,608,695 shares at $4.60 per share with a 15% over-allotment option for up to 1,141,304 additional shares. Bank of America Securities acted as the book-running manager and Oppenheimer & Co. as the co-manager for the offering. Net proceeds will be used to fund clinical trials for Protalix candidates and R&D activities and for working capital for general corporate purposes. The completion of the raise was announced February 18, 2021, with gross proceeds totaling approximately $40.25 million and the overallotment exercised in full.

The primary benefit from the fund raise is the availability of sufficient capital to repay the $57.9 million in notes that are due in November 2021.

Exclusive Partnership with SarcoMed USA

Protalix announced on February 11, 2021 that it had entered into an exclusive partnership with SarcoMed USA to develop alidornase alfa for the treatment of pulmonary sarcoidosis. This is the culmination of a July 2020 non-binding term sheet between the two companies. SarcoMed USA is a private company that was formed in 2017 to support its lead product candidate, SM001, a recombinant DNase I delivered via inhalation, in pulmonary sarcoidosis. The agreement grants exclusive worldwide license for alidornase alfa (PRX-110), Protalix’ Phase II recombinant DNase I, for use in the treatment of any human respiratory disease including, but not limited to, sarcoidosis, pulmonary fibrosis and other related diseases via in-haled delivery.

Under the terms of the agreement, SarcoMed will be responsible for identifying, selecting and conduct-ing clinical research and development of pharmaceutical candidates. In return for the license, Protalix is entitled to upfronts of $3.5 million, subject to conditions, additional payments tied to regulatory and commercial milestones and tiered royalties on product net sales commercialized through the license. Clinical and commercial supply agreements are agreed to enter talks within the next 60 days, else Sar-coMed can terminate the license agreement.

PRX-110

Alidornase alfa is recombinant human deoxyribonuclease I (DNase I) expressed via Protalix’ ProCellEx platform. Admin¬istration is via inhalation for direct application to the lungs. DNase I therapy can act as a mucus thin¬ning agent (mucolytic) to help with clearance from the airways to improve lung function and reduce the chances of infection. Disintegrating inflammatory cells, namely neutrophils, release DNA into the sputum, which polymerizes and is present at high concentrations, contributing to the viscosity of the sputum. DNase I degrades the DNA, thus reducing the viscosity of the mucus (3).

Pipeline

Protalix uses a plant-based protein expression system, ProCellEx, to produce its biologics. In 2012, Protalix successfully gained FDA approval for Elelyso making it the first FDA approved biologic ex-pressed with a plant-based system. While Elelyso is already approved, Protalix has additional, clinical-stage candidates including PRX-102 which is under review by the FDA with a target action date of April 27, 2021.

Protalix Clinical Development Pipeline (4)

PRX–102 is a recombinant α-Galactosidase-A enzyme. Protalix uses its ProCellEx platform to express the enzyme and then chemically modifies it via surface pegylation. Protein subunits are co¬valently bound via chemical cross-linking using short PEG moieties, resulting in a molecule with unique pharma-co¬kinetic parameters. In clinical studies, PRX–102 has demonstrated a circulatory half-life of approxi-mately 80 hours. Due to the chronic na¬ture of Fabry, patients must receive IV infusion of enzyme re-placement therapy every two weeks, which is a signifi¬cant burden. PRX-102, with its extended half-life, aims not only to be more effective, but also reduce the frequency of doctors’ visits by Fabry patients.

Summary

Since our recent initiation on Protalix, the company has provided several updates on its activities includ-ing closing a $40 million raise, consummating the partnership with SarcoMed USA and announcing re-sults from the BRIDGE and BRIGHT studies. We also anticipate positive news from the FDA regarding approval of PRX-102 by the target action date in late April. Assuming FDA approval, sales of the en-zyme should be underway by 2H:20. Below we summarize the key elements of our thesis:

➢ PRX-102 on cusp of commercialization

○ Target action date: April 27, 2021

➢Potential for superiority vs market leader Fabrazyme

○ Improved efficacy

○ Longer duration between infusions

➢Existing sales and royalty revenues from taliglucerase alfa

○ Pfizer, globally

○ Fiocruz, Brazil

➢Maintain regulatory approved plant based expression system

➢Orphan indication for PRX-102

➢Partnership with Chiesi for global commercialization of PRX-102 in Fabry Disease

○ Rights to milestones and royalties

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1. Source: Protalix Website. Accessed February 24, 2021. https://protalix.com/products/pegunigalsidase-alfa/

2. Protalix BioTherapeutics and Chiesi Global Rare Diseases Announce Positive Topline Results from BRIGHT Phase III Open-Label, Switch-Over Clinical Trial Evaluating Pegunigalsidase Alfa 2 mg/kg every Four Weeks for Treatment of Fabry Disease - Protalix BioTherapeutics (gcs-web.com)

3. Pressler T. (2008). Review of recombinant human deoxyribonuclease (rhDNase) in the management of patients with cystic fibrosis. Biologics: targets & therapy, 2(4), 611–617. https://doi.org/10.2147/btt.s3052

4. Protalix Corporate Presentation September 2020