Protalix to merge with Orthodontix after principal investor leads up to $21 million investment

By E. Janene Geiss

Philadelphia, Aug. 23 - Protalix Biotherapeutics Ltd. announced Wednesday that Philip Frost, former chairman and chief executive officer of IVAX Corp., has led a $15 million round of investment in Protalix.

Frost, together with The Frost Group, will invest $15 million in Protalix under a stock purchase agreement, in exchange for ordinary shares representing about 14% of Protalix on a fully diluted basis, and will receive a short-term warrant for an additional 5% of Protalix for an investment of an additional $5.3 million, according to a company news release.

After closing of the investment, Frost and Jane Hsiao, the former vice chairman of IVAX, will be joining Protalix's board of directors. The stock purchase is expected to close within a month, officials said.

Protalix also has entered into a merger agreement with Orthodontix, a publicly held company controlled by Frost, officials said.

Under the merger agreement, the existing shareholders of Protalix, excluding the Frost Group, will hold 85% of the shares of Orthodontix and the current shareholders of Orthodontix and the Frost Group will hold the remaining 15% of the shares of Orthodontix.

The merger is expected to close in the fourth quarter of 2006.

Following the merger, Orthodontix said it will change its name to Protalix Biotherapeutics Inc. and intends to apply for listing on a major stock exchange.

David Aviezer, the chief executive officer of Protalix, will serve as the chief executicve of the company.

This investment will allow Protalix to pursue advanced clinical studies for its enzyme therapy for Gaucher disease and advance additional drug development programs, officials said.

Protalix said it has completed phase 1 clinical studies for its enzyme therapy for Gaucher disease after receiving an Investigational New Drug approval from the Food and Drug Administration for use of its proprietary plant cell bioreactor system for the production of the human recombinant glucocerebrosidase.

Protalix is a Carmiel, Israel, biopharmaceutical company focused plant-cell-culture-expressed recombinant therapeutic proteins.

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