Protalix Hires Citigroup, Considers Possible Company Sale

Protalix BioTherapeutics Inc. hired Citigroup Inc. as the Israeli drugmaker considers a possible sale of the company after its first product won approval.

Protalix is reviewing possibilities for “product partnering, technology sharing and other strategic alternatives,” the Carmiel-based company said in a statement today. Pfizer Inc., which markets a drug for a rare genetic illness with Protalix, has expressed interest in buying the company, the financial newspaper Calcalist reported, without saying how it obtained the information.

Buying Protalix would allow Pfizer to keep all the sales of the medicine, known as Elelyso. The New York-based company also would gain Protalix’s know-how in making plant-based medicines. Protalix, which has a market value of about $589.8 million, surged the most in almost four years in New York trading.

“Pfizer is interested in Protalix’s manufacturing prowess,” Steve Brozak, an analyst at WBB Securities LLC who has a buy rating on Protalix, said in a phone interview from Clark, New Jersey. Protalix Chief Executive Officer David Aviezer “has in 20 years put together a company that has the technology that can change the way these very sophisticated products are made.”

When Elelyso was approved in May, Protalix and Pfizer became the first companies to win U.S. Food and Drug Administration backing for a drug made from a genetically engineered plant. The European Union’s drug regulator failed to back the product last year, saying a competing treatment from Shire Plc has exclusive market rights for 10 years.

Fat Buildup

Elelyso treats Gaucher disease, an illness that can cause fat to build up in the liver, spleen, bone marrow and nervous system. The market for the product is lucrative because of the severity of the symptoms and chronic nature of the illness, according to Protalix’s website.

Novartis AG and Merck & Co. also may be interested in buying Protalix, Calcalist reported. Representatives of Protalix, Citigroup, Pfizer, Novartis and Merck all declined to comment on the report.

Protalix is seeking $1 billion in a sale, though the largest shareholders may be satisfied with $700 million to $800 million, the newspaper reported. Biocell Ltd., which owns about 15 percent of Protalix’s stock, didn’t immediately respond to a call for comment.

Enzyme Replacement

Protalix gained 16 percent to $6.24 at 4 p.m. in New York, the biggest increase since June 26, 2009. The shares soared 19 percent to 22.60 shekels in Tel Aviv.

Elelyso replaces an enzyme missing in people with Gaucher disease, a genetic ailment that affects as many as one in 50,000 people in the U.S., according to the National Human Genome Research Institute. Sanofi also sells a drug for Gaucher called Cerezyme. About 1 in 14 individuals of Ashkenazi Jewish ancestry carries the mutated gene that can cause the illness.

Protalix and Pfizer are seeking to win marketing approval in Brazil, Chief Financial Officer Yossi Maimon said in December.