Tel Aviv Market Ends Sharply Higher Despite Tensions With Syria

Business in Brief | Judge warns of dangerous growth in unregulated investments ■ Protalix shares soar on pact with Chiesi for U.S. rights to PRX-102 ■ Ituran buying Latin American connected-car company Road Track

TheMarker
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Visitors standing in front of a stock market ticker screen at the Tel Aviv Stock Exchange (TASE).
Visitors standing in front of a stock market ticker screen at the Tel Aviv Stock Exchange (TASE).Credit: Bloomberg
TheMarker

Judge warns of dangerous growth in unregulated investments

Unusually large amount of available capital combined with low interest rates have caused a rise in offers for investments that are not regulated by the Israel Securities Authority, said Judge Khaled Kabub, vice president of the Tel Aviv Economic Court and a leading expert on financial crime in Israel. He said many promoters were exploiting loopholes in the law defining securities to avoid the cost of filing a prospectus and complying with ISA rules. “This ambiguity creates uncertainty about which investments are subject to ISA supervision. In addition, it leaves many ways to evade the umbrella of regulatory oversight and the regulatory obligations that apply to supervised investments,” Kabub said in a lecture last week, saying he believed the courts must begin interpreting the law more broadly to protect investors. “The lack of ISA supervision could lead to huge losses on investments managed by unprofessional managers and, in other cases, even to fraud,” he warned. (Ido Baum)

Protalix shares soar on pact with Chiesi for U.S. rights to PRX-102

Shares of Protalix BioTherapeutics soared Tuesday after  the drug developer said it had reached an agreement giving U.S. rights to Italy’s Chiesi Farmaceutici to develop and commercialize its flagship drug. The agreement entitles Protalix to an up-front payment of $25 million from Chiesi and additional payments of up to $20 million in development costs for its PRX-102 drug candidate for the treatment of Fabry disease. Protalix said it could also receive up to $760 million in regulatory and commercial milestone payments as well as tiered royalties ranging from 15% to 40% on net sales. Protalix will continue to be the manufacturer of PRX-102 for clinical development and commercial purposes. “Taking into consideration a $25 million up-front payment and shared development expenses, we expect our cash runaway to take us through the readouts of all of the Fabry clinical trials,” said Protalix CEO Moshe Manor. Protalix shares closed up 15.3% at 1.86 shekels (51 cents). (Yoram Gabison)

Ituran buying Latin American connected-car company Road Track

Israel’s Ituran said Tuesday it acquired 81% of the Latin American company Road Track Holding for $91.7 million to expand services out of its core vehicle-location and fleet management services. With annual revenue of about $96 million, Road Track provides a connected-car platform to 550,000 subscribers in the automotive market. Its customers include two global automobile manufacturers as well as car dealers, insurance companies and fleet operators. “Our expectations are that following the closing, the combined business will have around 1.8 million subscribers with revenues run-rate of close to $400 million, making it a game changer for our company,” said Ituran CEO Eyal Sheratzky. Payment will be $75.7 million in cash, $12 million in shares and $4 million paid out in shares as a bonus over the next three years to senior management, after which Ituran will buy the rest of Road Track. Ituran shares were up 7.5% at $33.05 midday local time in New York. (TheMarker)

Tel Aviv market ends sharply higher despite tensions with Syria

Investors shrugged off the downing of a Syrian fighter jet and rising tensions in the north to take shares sharply higher Tuesday. The benchmark TA-35 index ended up almost 1% at 1,560.42 points, while the TA-125 advanced more than 0.9% to 1,395.38, on relatively high turnover of 1.05 billion shekels ($290 million). Bank and tech shares were the biggest gainers: Bank Hapoalim ended up 1.6% at 25.61 shekels and Mizrahi Tefahot up 1.3% at 70.09 while TowerJazz paced gains for technology stocks, climbing 3.3% to 85.40. Mazor Robotics added 2.6% to 113.80 and AudioCodes jumped 8.8% to 32.11 after reporting quarterly earnings of 14 cents a share, 4 cents above the Zacks Consensus Estimate. Delek Group rose 3.8% to 518.90 after the holding company announced a buyback plan for 350,960 shares at 520 shekels each. On the losing side, mall developer Melisron shed 1.9% to 141.70 amid reports it was under pressure from major apparel retailers to lower rents. (Assa Sasson)

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