Protalix gets $15 million investment as part of merger; Theravance sees positive telavancin trial results

By Sheri Kasprzak

New York, Aug. 22 - Israeli biotech company Protalix Ltd. led news on Tuesday with word that it will raise $15 million from an investment connected to the company's reverse merger with Orthodontix, Inc.

Some of Orthodontix's majority shareholders, including Phillip Frost and Glenn Halpryn, agreed to buy roughly 14% of Protalix's outstanding stock in a private placement. The investment comes with warrants equal to 5% of the company's outstanding shares.

The placement is slated to close in a month.

Under the terms of the merger, all of the shares of Protalix will be converted into 594.5 million shares of Orthodontix. The merger is slated to close in the fourth quarter.

"We are excited by the breadth of Protalix's unique plant cell culture bioreactor platform, the quality of the management team and the prospects for the company's products and technology, particularly its lead product for the treatment of Guahcer disease, which is progressing through the clinical development process," Frost said in a statement. "Based upon its unique capabilities to manufacture safe and efficacious recombinant proteins for a number of therapeutic areas, we expect that Protalix will establish itself over the coming years as an innovative leader in this area."

"We are privileged to have Dr. Frost join us as a shareholder and board member," said Protalix chief executive officer David Aviezer in a news release. "We believe that this investment, made by a top-tier industry leader, provides important recognition to Protalix's technology and vision."

Protalix, based in Carmiel, Israel, is a biotechnology company focused on developing beta interferon, antibodies, hormones and veterinary vaccines. Miami-based Orthodontix provides billing and payroll services to orthodontists' offices.

Telavancin gets positive results

Theravance, Inc. received positive results in the Atlas I and Atlas II trials of its telavancin injectable antibiotic used to treat skin and skin structure infections.

The trials comprised two multi-center, multinational, double-blind, randomized phase 3 clinical studies of the drug.

In the trials, telavancin showed a 90.6% cure rate against vancomycin's 86.4% cure rate. Vancomycin is Eli Lilly Inc.'s comparable product.

Also, telavancin showed a microbiological eradication rate of 89.9% versus 85.4% against vancomycin.

Even so, one sellsider said the results are actually more beneficial for Cubist Pharmaceuticals, Inc. since the product did not show superiority against that company's Cubicin product.

"Should be good news for [Cubist]," the market source noted.

In fact, on Tuesday, Cubist's stock climbed by a penny, or 0.04%, to close at $22.26 and gained another 74 cents, or 3.32%, in after-hours trading (Nasdaq: CBST).

Conversely, Theravance's stock (Nasdaq: THRX) slipped Tuesday, losing 12 cents to close at $25.28 and giving up another 28 cents in after-hours trading.

Based in South San Francisco, Calif., Theravance develops and commercializes therapeutic products to treat respiratory diseases, bacterial infections and gastrointestinal dysfunctions.

GammaCan stock sinks

After announcing its collaboration to develop VitiGam with Life Therapeutics Inc., GammaCan International Inc. saw its stock take a dip on Tuesday.

The stock fell by 10.53% after the collaboration was announced in the morning. The stock lost 8 cents to settle at $0.68 (OTCBB: GCAN). Meanwhile, Life Therapeutics' stock remained unchanged at A$1.62 (Australia: LFE).

Under the terms of the collaboration, the two companies will develop VitiGam, a drug used to target metastatic malignant melanoma in the third and fourth stages. Life Therapeutics will share the costs to develop the drug and will also supply plasma for the project.

"We are extremely pleased to be working with Life Therapeutics on the development of VitiGam for the U.S. and Australian markets," said Patrick Schnegelsberg, GammaCan's CEO, in a statement. "This brings GammaCan yet another significant step closer to the planned clinical trials of VitiGam to treat malignant melanoma, a cancer with a significant unmet medical need."

GammaCan, based in Kiryat Ono, Israel, develops and commercializes anticancer drugs. Atlanta-based Life Therapeutics collects hard-to-find hyperimmune plasma for investigation new drug studies and trials.

Possis stock lifts by 3.6%

Possis Medical, Inc. got the green light from the Food and Drug Administration Tuesday to market its GuardDOG Occlusion System to treat peripheral vascular disease. The nod sent the company's stock up by 3.58%.

The stock gained 34 cents to close the session at $9.84 (Nasdaq: POSS).

The GuardDOG system, according to a statement released by Possis, allows physicians to manage local blood flow while employing interventional techniques and devices to treat vascular diseases.

"We are excited about the potential of the GuardDOG system," said Robert Dutcher, the company's CEO, in a statement. "Peripheral vascular disease is a potentially limb- and life-threatening condition, and the GuardDOG Occlusion System provides a new option for controlling local blood flow and facilitating infusion of therapeutic or diagnostic fluids, as well as delivery of interventional devices."

Minneapolis-based Possis develops medical devices aimed at treating cardiovascular and vascular diseases.

Vical to develop HIV vaccine

Elsewhere, Vical Inc. said it will enter a phase 1 clinical trial of a prime-boost vaccine to prevent or control diseases in HIV patients.

The news sent the company's stock up 2%, or 10 cents, to close the day at $5.10 (Nasdaq: VICL).

The vaccine, according to a news release from Vical, was developed at the Dale and Betty Bumpers Vaccine Research Center at the National Institute of Allergy and Infectious Diseases. It incorporates HIV genetic material from the three most important HIV subtypes, clades A, B and C, which cause roughly 85% of all HIV infections.

"Antiviral drugs has dramatically improved the outlook for HIV-infected individuals, but complicated treatment regimens, serious side effects and increasing drug resistance call for better long-term solutions," said Vijay Samant, the company's CEO, in the release.

"A post-infection vaccine that would allow the immune system to suppress viral loads could provide significant benefits both to prevent disease symptoms in the individual and potentially reduce disease transmission between individuals We are excited that our collaborators at the VRC have advanced into human testing with this novel vaccine application."

Vical, located in San Diego, develops DNA-based technologies used to treat life-threatening illnesses.

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