Protalix-Pfizer Tag Team Against Genzyme: BioBuzz

CARMIEL, Israel (TheStreet) -- Investors can be tough to please. Protalix Biotherapeutics(PLX Quote) opened lower Tuesday even though the company signed a worldwide marketing deal for its Gaucher drug with Big Pharma giant Pfizer(PFE Quote).

Protalix shares were off 13% to $8.59 in early trading, likely due to initial disappointment that Pfizer did not acquire the small Israeli drugmaker outright. Pfizer is paying $60 million upfront for rights to Protalix's drug Uplyso, an amount that may also be striking Protalix holders as a bit light.

Still, the big picture looks bright for Protalix, which now has formidable partner with which to compete against Genzyme(GENZ Quote) for Gaucher patients.

Protalix is expected to file Uplyso for regulatory approval soon. If the drug is approved next year, it will come to market as Genzyme is still reeling from supply interruptions of its Gaucher drug Cerezyme, caused by the viral contamination and temporary shutdown of a key manufacturing facility in Boston.

"In our view, the improved access to global pharmaceutical markets through Pfizer elevates the [Uplyso] threat to Cerezyme and implies potential downside to Cerezyme estimates," wrote JPMorgan biotech analyst Geoff Meacham in a note to clients Tuesday morning.

He adds, "Indeed, Genzyme has not faced competition in the Gaucher market until the supply constraint, and we believe the longer-term threats from [Uplyso] and Shire's(SHPGY Quote) velaglucerase are real."

The marketing agreement between Protalix and Pfizer is for Uplyso only, but Protalix is developing drug candidates for rare genetic disease, including a drug for Fabry's disease, which could conceivably compete against Genyzyme's Fabrazyme.