Protalix Biotherapeutics Inc (NYSEMKT:PLX) Still Has Plenty Of Run Room

At the beginning of January, we looked at Protalix Biotherapeutics Inc (NYSEMKT:PLX), in this piece. At that time, our thesis was simple, and our reason for highlighting the company – even simpler. Basically, we thought that the company was incredibly undervalued at its then-PPS, and that given its underlying fundamentals, there was a high chance of a near-term upside revaluation. At the time, the company was trading for around $0.40 a share. At last close, the company traded for $0.62 a share – a 50% upside revaluation in a matter of weeks. Even in the wake of this appreciation, however, and with a current market capitalization of circa $76 million, we still feel the company is undervalued. Not only that, but we see a number of near-term catalysts as likely to hit press and rebalance this undervaluation. In other words, this one was a January runner, but there is plenty of room left in it yet.Here is what we're watching.By way of a brief introduction, Protalix is a development stage biotechnology company, which has created a technology that has the potential to change the way we treat patients across a host of different indications. Specifically, the system is called ProCellEx, and it uses plant cells to create drugs that are currently only producible from mammalian cells. This plant cell production reduces the cost by around 10 times, and – as we mentioned last time – has resulted in a partnership with Pfizer Inc. (NYSE:PFE). The partnership saw the latter come on board with Protalix’s first approved product, a drug called Elelyso, which targets Type 1 Gaucher disease.At the time of our previous coverage, the company has just put out interim data from its phase 2 study of a drug called AIR DNase, which is a reformulation of a currently approved drug called DNase that looks to overcome one of the key drawbacks of the latter. Specifically, Protalix's candidate resists actin inhibition, and in doing so, should improve clinical benefit considerably. Topline data from this study is set for release this quarter, and it is this report that we are watching as a major near-term catalyst for the company. The run seen across the last few weeks is undoubtedly attributable to speculative entries ahead of this release in anticipation of some positive data (based on the results inferred by the interim release).That isn’t all with this company, however. Cash is incredibly strong, reported at $80 million as things stand, which will see it capitalized through end 2019. Revenues are already incoming, and should increase in magnitude based on the above discussed Pfizer license and the one region for which Protalix retained rights to Elelyso, Brasil.Looking slightly longer-term, we should see a phase 3 readout initiate relating to a Fabry disease asset, which again is based on the above-mentioned technology and seeks to overcome drawbacks of the current standard of care, as well as a phase 2 read out from an ulcerative colitis asset within a similar time frame. Combine the company's pipeline, and it is looking at around $8 billion in market potential. Even if the majority of its development assets fail, and just one reaches commercialization, there is at least $1 billion in market potential to go at in the US alone.As a brief note of caution, chances are we are going to see some degree of pullback very near-term as the shorter term traders take profits off the table. As mentioned above, however, we believe the surge volume (and the concurrent surge in share price) is reflective of traders picking up an exposure ahead of the cystic fibrosis topline, and as such, we should see these positions held until at least data release. This means any correction could be an opportunity to pick up an exposure ahead of a return to the upside momentum at a discount.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.