Protalix BioTherapeutics Inc (NYSEAMERICAN: PLX) is flying early on in the trading session this morning after the company announced news surrounding an expanded partnership. The news came with a hefty upfront payment and promise of potential revenue ahead. Of course, that excited investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The expanded partnership;
- what we’re seeing from PLX as a result; and
- what we’ll be watching for ahead.
PLX Announces Expanded Partnership
As mentioned above, Protalix BioTherapeuitcs is headed for the top early on in the marke this morning after news broke of an expanded partnership. In a press release issued early this morning, the company announced that it has expanded its partnership with Chiesi Farmaceutici S.p.A.
PLX and Chiesi entered into an exclusive U.S. license and supply agreement that grants Chiesi the United States rights surrounding the development and the commercialization of PRX-102. PRX-102 is a chemically modified version of the recombinant protein alpha-galactosidase-A and is under development for the treatment of Fabry disease. Previously, the company partnered with Chiesi for the development and commercialization of the treatment outside of the United States.
According to the new United States license and supply agreement, PLX will receive an upfront payment of $25 million. On top of the up front payment, Protalix will receive additional payments of up to $20 million in development costs that will be capped at $7.5 million a year. Additionally, the company is eligible to receive up to $760 million in regulatory and commercial milestone payments as well as tiered royalties ranging from 15% to 40% on net sales as a consideration for supply. In the release, the company said that it would continue to be the supplier of PRX-102 in both the development and commercial stages.
We are very pleased to expand our collaboration with Chiesi, a growing global company with well-established global commercial infrastructure with a fast growing commercial presence in the U.S. Chiesi’s global investment of $95 million in upfront payments and development costs reimbursement, and additional up to a maximum of $1 billion in potential milestone payments, combined in the two agreements reflects Chiesi’s true commitment to the Fabry space… Taking into consideration a $25 million upfront payment and shared development expenses, we expect our cash runaway to take us through the read outs of all of the Fabry clinical trials.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Protalix BioTherapeutics, the news proved to be overwhelmingly positive. After all, the expanded partnership has the potential to drive some serious revenue that will start with a $25 million upfront payment. So, it’s no surprise to see that excited investors are sending the stock on a run for the top this morning. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:52), PLX is trading at $0.50 per share after a gain of $0.058 per share or 12.99% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PLX. In particular, we’re interested in following the devleopment of PRX-102 to see how much of the more than $700 million in milestones the company earns. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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