Protalix Biotherapeutics Inc (NYSEMKT:PLX) Should Continue To Run Into Late 2017 And Beyond

On May 23, 2017, Protalix Biotherapeutics Inc (NYSEMKT:PLX) announced that it's poised to present data from its lead cystic fibrosis (CF) study at the upcoming European Cystic Fibrosis Society Conference. On the back of the news, the company started to run. By the end of the day its share price had gained 11%, and premarket trading on Wednesday added a further 5% to the advance. These are data that fell foul to a degree of market misinterpretation on their initial release – misinterpretation that we sought to realign as part of this coverage.Even with the latest run, the company remains down considerably subsequent to the misinterpreted release. Prerelease, Protalix went for $1.31 a share (April 11, 2017) and it's currently trading at just shy of $1 flat.Having seen markets respond to the most recent announcement with buying of the company, we expect the presentation itself to spark a continued advance and close the gap on the April/May decline. This serves up the potential for a very near-term 30% run. Beyond that, and as the asset in question matures towards commercialization, this initial gap closing should prove the start of a longer-term upside revaluation.Ahead of the presentation, then, here is what markets should be focusing on.As mentioned, the data relates to CF asset, specifically one called alidornase alfa, or PRX-110. It is created using the company's proprietary technology that allows for the production of drugs using plant cells as opposed to mammalian cells, which serves to dramatically reduce the cost of manufacture. Basically, the company takes already approved drugs and tries to re-create them using this just described technology, adding in an extra benefit here and there designed to serve as a differentiator if and when the assets in question gets to market.In this instance, the drug is an alternative (read: based on) a standard of care therapy called Pulmozyme. ­Without getting into the science into much detail, Pulmozyme is designed to thin out the mucus associated with cystic fibrosis, making it easier for patients to breath and clear their lungs. Alidornase alfa is designed to do the same.The latest data, the data that the company will be presenting at the upcoming conference, compared alidornase alfa to Pulmozyme and – as we highlighted last time – the comparison demonstrated that the former is a viable alternative to the latter. There is also a built-in benefit in that alidornase alfa isn't inhibited from an efficacy perspective by something called actin, whereas Pulmozyme is. This is a key point and it's worth illustrating with a chart (below).sourceWhat readers are seeing here is the impact that actin, which is a potent inhibitor of Pulmozyme and is found in high concentrations in CF patients’ sputum, has on the standard of care asset, and that it doesn't have this impact on the under-investigation asset.Now take a look at the second chart below.sourceThis one's a chart illustrating the topline from the above-referenced phase II trial. It shows that Protalix's asset brought about a mean absolute improvement in ppFEV1 (the primary severity measure and endpoint of the study) compared to baseline of 3.4 points. It also shows that, as compared to end of pulmozyme treatment (there was a washout period), this came in at 3.3 points. The Orkambi comparison is included as this drug will likely be taken with Orkambi (they target different aspects of CF) and so it's important to show that Orkambi isn’t doing all the work in the study difference.We're well aware that this was a very small trial, and that this makes the data, however positive, weaker than might be preferable. It doesn’t make it weak, however, just weaker. That's a key difference. It may well still be strong enough to serve as the basis for a partnership for Protalix on the program with a bigger, deeper-pocketed name, and we're guessing that's the goal of getting this data in front of the community by way of the upcoming conference presentation. If the company can pick up a partner there's a clear path to phase III and beyond, and plenty of catalysts on the cards between now and the pivotal completion.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.