Protalix BioTherapeutics (PLX) - Taliglucerase Alfa FDA approval

Catalyst:  2011/2/25

Drug candidate:  Taliglucerase Alfa

Indication:  Gaucher disease

About Gaucher disease:  Gaucher disease, the most prevalent lysosomal storage disorder, is caused by mutations in the human glucocerebrosidase gene (GCD), which have been mapped to chromosome 1 q21-q31, leading to reduced activity of the lysosomal enzyme glucocerebrosidase and thereby to the accumulation of substrate glucocerebroside (GlcCer) in the cells of the monocyte-macrophage system. This accumulation leads to the visceral manifestations of hepatosplenomegaly, anemia and thrombocytopenia, as well as to the skeletal features and less frequently also to lung involvement.

About Taliglucerase alfa:  Taliglucerase alfa is a plant cell expressed recombinant glucocerebrosidase enzyme for the treatment of Gaucher disease. Expression of proteins in plant cell culture is highly efficient, does not require post-expression modification of the protein, and is not susceptible to contamination by agents such as viruses that are pathological to humans.

Note:  Taliglucerase alfa was granted orphan drug designation by the U.S. Food and Drug Administration.  A New Drug Application (NDA) for taliglucerase alfa has been accepted by the FDA and assigned a Prescription Drug User Fee Act (PDUFA) action date ofFebruary 25, 2011.  Taliglucerase alfa is available to patients with Gaucher disease in the United States under an Expanded Access protocol as well as to patients in several member states of the European Union, Israel and other countries under Named Patient provisions.

Trading Map

Because Taliglucerase alfa's approval is widely expected, the upside is likely priced in already.  Nevertheless, expect a $1-3 pop after FDA's announcement.  The general consensus is that Protalix (PLX) could reach $10-12 with approval.  With the PDUFA just around the corner (2/25), Mar $10 call options seem like a great buy.  Look to sell these either BEFORE the catalyst or IMMEDIATELY after.  After PDUFA, expect a quick sell off as traders scramble to sell on the news - look to snatch up Mar $12.5 put options.  Good luck!

** Don't forget.  The FDA is notorious for releasing the announcement ahead of schedule and there has been rumors on the street about Taliglucerase alfa's approval as soon as tomorrow.  As a result, people should get in on the play by tomorrow (2/18) at the latest!