West Coast Editor

Shares of Israel-based Protalix BioTherapeutics Inc. crashed on word that the company priced 10 million shares of its stock at only $5 per share, as Wall Street cut the firm's market cap - hefty after last summer's merger with the shell firm Orthodontix Inc. - severely down to size.

Thursday's market close left Protalix's shares (AMEX:PLX) at $6.31, down $29.75, or 83 percent, on news of the public offering.

Protalix's lead compound, glucocerebrosidase, targets Gaucher's disease and entered Phase III trials in August. It would compete with Cambridge, Mass.-based Genzyme Corp.'s Cerezyme (imiglucerase), the only approved product for the enzyme-shortage disorder, but is composed of a slightly different isoform. Everything else in Protalix's pipeline is much farther back.

In the Orthodontix merger, each ordinary share of Protalix is to be converted into about 594.5 shares of Orthodontix stock, leaving Orthodontix shareholders with about 0.84 percent of Karmiel, Israel-based Protalix on a fully diluted basis. (See BioWorld Today, Aug. 23, 2006.)

Majority shareholders of Miami-based Orthodontix - including Glenn Halpryn, president of the firm, and Phillip Frost, former chairman and CEO of Ivax Corp., also in Miami - bought $15 million in Protalix stock, or about 14 percent of the company. UBS Investment Bank is acting as sole book-running manager for the Protalix offering, with CIBC World Markets Corp. serving as co-manager. Protalix has granted underwriters a 30-day option to buy up to 1.5 million more shares to cover overallotments, if any.

As of June 30, Protalix had about $22.4 million in cash and cash equivalents, an amount that the company said in its second-quarter earnings report should allow Protalix to "maintain its current planned development activities and the corresponding level of expenditures for at least the next 15 months."

In other financing news:

• Arrowhead Research Corp., of Pasadena, Calif., provided $2.4 million in capital to wholly owned subsidiary, Tego Biosciences Corp., which is working on therapeutics and other products based on the antioxidant properties of modified fullerenes, a highly structured, nanoscale form of carbon, similar to carbon nanotubes.

• MediciNova Inc., of San Diego, said it plans to publicly offer 6 million shares of common stock, granting underwriters a 30-day option to purchase up to an additional 900,000 shares to cover overallotments, if any. Pacific Growth Equities LLC is the sole book-running manager for the offering. HSBC, Punk, Ziegel & Co. and Rodman & Renshaw, LLC are co-managers.

• Reliant Pharmaceuticals Inc., of Liberty Corner, N.J., set the terms of its initial public offering of about 11.7 million common shares at a price between $25 and $27 per share. Reliant aims to trade on the NYSE under ticker symbol RRX. Goldman Sachs and Merrill Lynch are serving as co-lead underwriters. (See BioWorld Today, Aug. 14, 2007.)

• Xencor Inc., of Monrovia, Calif., raised an additional $15 million in its Series E round, bringing the total to $60 million. The additional money came from Oxford Bioscience Partners and Merlin Nexus, along with existing investor Novo Nordisk AS, of Bagsvaerd, Denmark. The first closing of the round took place a year ago. (See BioWorld Today, Oct. 19, 2006.)

• XTL Biopharmaceuticals Ltd., of New York, entered into definitive agreements with institutional investors for a private placement to garner $9.6 million in gross proceeds of ordinary shares, represented by American depositary receipts. The lead investors in the transaction are Perceptive Life Sciences Fund, Quogue Capital LLC, SCO Capital Partners and Versant Capital.