Brazil to build Protalix a plant as part of sophisticated tech transfer

The governments in many emerging markets are pressuring drugmakers to open manufacturing plants and transfer some technology so they don't have to be so reliant on imported meds. Brazil and Israel's Protalix BioTherapuetics ($PLX), which has developed a specialized plant-cell technology, are taking the concept to a whole new level.

Protalix has struck an unusual deal with Brazil in which the government will build a plant where the company will manufacture its Gaucher drug Uplyso, and at the end of a 7-year technology transfer, Protalix will hand over operation of the facility and the know-how to Fiocruz, an arm of the Brazilian Ministry of Health. At that point, Fiocruz will be the only supplier in Brazil of the the expensive drug for the rare condition. The drug sells for a reported $150,000 a year. In return, Brazil is buying at least $40 million of the drug each year during the 7-year arrangement. The two have agreed that the arrangement can be extended for up to 5 more years if the tech-transfer is not complete. Protalix uses a proprietary plant-cell process for making the drug. 

"Through this collaboration, we are able to strengthen our technological and industrial capabilities in the area of biologics manufacturing and improve the health of Brazilian citizens who are impacted by this rare disorder," said Dr. Alexandre Padilha, Brazil's Minister of Health.

Pfizer ($PFE) is partnered with Protalix for the commercialization of the Gaucher drug and so as part of the arrangement is giving up its stake in the drug in Brazil. Protalix will then pay Pfizer up to $12 million a year from its sales of the drug to Brazil.

Other countries have been using a variety of measures to entice, or bully, drugmakers into opening plants and hiring their people in an effort to build a domestic drug industry. Russia, for example, has warned drugmakers that if they do not build plants there, they could face tariffs on imported drugs. The country also has set up its public drug tenders to favor locally produced meds. Malaysia and some other countries are providing financing and incentives to get drugmakers to set up shop in their countries.

- here's the release