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Protalix BioTherapeutics, Inc. (PLX - Snapshot Report) recently signed a supply and technology transfer agreement with Fundação Oswaldo Cruz (Fiocruz), a Brazilian Health Ministry Arm, for Uplyso (alfataliglicerase). Uplyso is the company’s proprietary enzyme replacement therapy for treating Gaucher disease, which is a rare lysosomal storage disorder that affects very few people worldwide.

According to the agreement, the transfer of technology is expected to complete in seven years. The transfer is intended to provide Fiocruz with the capability and skills needed for the Brazilian government to build its own production facilities, at its own expense, to provide efficient supply of Uplyso, taking sustainability, quality and cost-effectiveness into consideration.

As per the agreement, Fiocruz will be purchasing Uplyso for at least $40 million in the first two years, and at least $40 million per year in the following years. Fiocruz is required to purchase a minimum of $280 million worth of Uplyso, failing which Protalix is not bound to close the final stage of the transfer. If needed, the agreement can be extended for another five years to complete the transfer. The additional years will carry the same terms of the arrangement, including the minimum annual purchases.

The technology transfer agreement is expected to become effective in one month, once approval is received from the Brazilian National Institute of Industrial Property.

Protalix has a commercialization partnership with Pfizer Inc. (PFE - Analyst Report), for alfataliglicerase. In order to facilitate the technology transfer agreement, Protalix amended its agreement with Pfizer. As per the amended agreement, Pfizer returned its commercialization rights in Brazil to Protalix for a maximum payment of $12.5 million from the company’s net profit each year of the agreement.

We note that Uplyso received regulatory approval in Brazil in Mar 2013. Uplyso, which is marketed as Elelyso outside Latin America, was approved by the FDA and Israel’s Ministry of Health in May 2012 and Sep 2013, respectively.

Currently, other approved therapies for type I Gaucher disease include Cerezyme and Vpriv. Additionally, Zavesca is another approved therapy and is the only oral medication approved for patients suffering from mild to moderate type I Gaucher disease, and on whom enzyme replacement therapy cannot be carried out.

Protalix currently carries a Zacks Rank #1 (Strong Buy). At present, companies like Jazz Pharmaceuticals Public Limited Company (JAZZ - Analyst Report) and Santarus, Inc. also carry a comparable rank.

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