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An Opportunity To Get In To Protalix Biotherapeutics Inc (NYSEMKT:PLX) Ahead Of Wider Market Awareness

An Opportunity To Get In To Protalix Biotherapeutics Inc (NYSEMKT:PLX) Ahead Of Wider Market Awareness
Written by
Chris Sandburg
Published on
February 14, 2017
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On Monday, February 13, 2017, Protalix Biotherapeutics Inc (NYSEMKT:PLX) announced that it would be presenting at the 13th Annual WORLDSymposium 2017 in California. On the back of the announcement, the company gained just short of 30%, and currently sits 200% up on its year open market capitalization. Here at Insider Financial we regularly make calls as to what we think the future holds for development stage biotechnology companies. The sector is one of our most covered. Many of these calls prove correct, and Protalix is no exception.Back on January 9, we published this piece claiming the company was undervalued at its then current price of $0.40 a share. Between January 9 and January 30, the company ran up to a little over $0.63 a share. After the run, we published this piece maintaining our thesis that it was still undervalued, even subsequent to a close to 60% gain.At last close, Protalix went for $1.31.With this run in place, what are our expectations for the company now? Can the upside continue, and if so, what is going to drive it?To answer the first question, in a word, yes. We think the upside can continue, however, there is an addendum. Chances are on the back of the current run we will see some degree of correction, as short-term traders (many of which picked up a position on the back of our January highlighting of the company) take profits off the table. Subsequent to a correction, however, we see the upside momentum returning, and breaking through the just mentioned $1.31 highs.So, the second question, what's going to drive this break?Well, again to come out with a short answer, Protalix's pipeline.As we have noted in the past, the real value in this company lies in its ability to create a class of therapies far cheaper, and far more efficiently, than current standard of technology allows. We went into detail on this in our previous coverage, but by way of a quick reintroduction, Protalix uses plant cells to create therapies currently only created with mammalian cells, and this dramatically reduces the cost of production. And when we say dramatically, we mean by a factor of 10. This drives value on two fronts.The first, through the creation of therapies under license for other entities (a contract manufacturing sort of deal, if you will). The second, through the development of a proprietary pipeline of treatment.Near-term, this second front is where we see value creation.The company has developed three drugs that are currently in various stages of clinical trials, PRX-102, 110 and OPRX-106, targeting Fabry disease, cystic fibrosis (CF) and ulcerative colitis (UC) respectively. Each of these drugs is basically a reformulation of the current standards of care in their respective spaces, but with certain deficiencies removed, altered and – in turn – overcome. Basically, the company is trying to bring currently approved treatments to market, but with a slight (but clinically significant) improvement over legacy standards.The first two of the above mentioned three drugs are in phase 3 trials right now, and the third is in a phase 2 study. If these trials can produce positive data, Protalix will be looking at multi-billion dollars worth of market potential, and data to date suggests that positive data should be a shoo-in.So why has the recent news moved the company so much?Simply because, as yet, this one remains somewhat under the radar. Further, because markets believe that as it moves out from under the radar, investors will sit up and take notice of its promise, and pile into the stock in an attempt to gain exposure ahead of wider markets. The upcoming presentation will put the data in front of a large number of potential investors and members of the scientific community, and as such, should start the ball rolling from a market awareness perspective (or at least keep the ball rolling, or make it roll a little faster and farther than it is at present).Protalix has $80 million cash on hand right now, and should be funded through the end of 2019, meaning all of its current programs (read: the above three drugs) should have no trouble reaching the end of the ongoing studies.We will be updating our subscribers as soon as we know more. For the latest updates on PLX, sign up below!Disclosure: We have no position in PLX and have not been compensated for this article.

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