NEW YORK (AP) ¿ Shares of Protalix BioTherapeutics Inc. fell Tuesday as a newly announced licensing deal with Pfizer Inc. appeared to dispel hopes of a buyout.

Investors had been hoping Pfizer would make a move to buy Protalix. Instead, on Tuesday New York-based Pfizer licensed rights to a developing Gaucher's disease treatment, prompting a $60 million payment to Protalix.

"There were some expectations that it (Protalix) would be outright acquired," said Oppenheimer & Co. analyst Dr. Brian Abrahams. "But aspects of the collaboration itself are quite positive."

Protalix shares sank $1.09, or 11.1 percent, to $8.77 in afternoon trading. The stock has ranged from 96 cents to $12.50 over the past year.

Under the deal, New York-based Pfizer will gain worldwide licensing rights to Protalix's taliglucerase alfa, or Uplyso, while Protalix retains exclusive commercialization rights in Israel, where the company is based.

Taliglucerase alfa is an enzyme replacement therapy which has been designated an orphan drug by the Food and Drug Administration. Orphan drug status is given to drugs aimed at rare conditions or conditions that have a lack of treatments on the market. Incentives include seven years of market exclusivity following FDA approval, assistance in clinical trial design, a reduction in user fees, and tax credits.

Gaucher's disease is an enzyme disorder that can lead to liver and neurological problems. The drug candidate could be a competitor to Genzyme's Cerezyme.

"It's a billion-dollar plus space, so despite the fact it's a rare disease, it's a big market," Abrahams said.

Protalix will receive the $60 million upfront and is eligible to receive additional regulatory milestone payments of up to $55 million. Pfizer will pay for 60 percent of the expenses for the development and sales of the drug, while receiving 60 percent of revenue from sales.

Abrahams said Pfizer may buy Protalix at some point. Pfizer's interest in such a deal could grow as it gains more comfort with Protalix's technology and manufacturing capabilities, he said.

Pfizer, meanwhile, has been expanding into the biotech space over the last year and made a big jump in November when it paid $68 billion for rival Wyeth. But, it has also been cutting costs through its work force. Those cuts are likely to continue, with the new combined company expected to eliminate nearly 20,000 jobs by the time their integration is complete.

Pfizer shares added 57 cents, or 3.1 percent, to $18.74.
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