Protalix BioTherapeutics, Inc. Price & Performance (PLX)

Thank you, operator, and welcome to the Protalix Biotherapeutics Fiscal Year twenty twenty four Financial Results and Business Update Conference Call. With me today are Dhrbashan, President and CEO of Protalix and Eyal Rubin, Senior Vice President and Chief Financial Officer. Press release announcing the financial results and corporate updates was issued this morning is available now on the Protalix website. Please take a moment to read the disclaimer about forward looking statements in the press release. The earnings release in this teleconference include forward looking statements. These forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ described in the disclaimer and in Protalix's filings with the U. S. Securities and Exchange Commission. I will now turn the call over to Mr. Michon. Dror? Thank you, Mike, and thank you everyone joining the fiscal year of twenty twenty four financial results and business update call. Will begin by reviewing our accomplishments over the past year and recent progress. Following my remarks, Eyal will provide a detailed review of our financial results. We will then open the line for questions, of course. 2024 was a very good year for Protalix.

As we brought record revenues from our partners fully repaid our outstanding debt and continued to focus R and D efforts on PRX-one 15 PRX-one 19 and other early stage candidates. I would like to start with PRX-one 15. Is our recombinant PEGylated uricase candidate in development for the treatment of uncontrolled gout. We produce PRX-one 15 through our prosthetics platform.

As we have announced last quarter, we completed all cohorts in the first in human Phase one clinical trial of PRX-one 15. This study was a double blind placebo controlled single ascending dose study designed to evaluate safety, tolerability pharmacokinetics and pharmacodynamics following a single dose of PRX-one hundred fifteen in subjects with elevated uric acid level.

The results from this study were presented in the late breaking poster at Convergent Conference in November of twenty twenty four. A copy of the poster is available in the publications section of the Protalix website. Are pleased with the results from this first in human study, believe they support moving forward into patients. To that end, we have been preparing for a Phase II clinical trial of PRX-one hundred fifteen and have been in dialogue with regulatory authorities in The U. S. Regarding such [indiscernible] trial. Our goal is to initiate the Phase two study during the second half of this year. Turning now to El Fabrio. Throughout 2024, our commercial commercial partner Chiesi Global Rare Diseases continued to increase its focus on the Fabryo and invest heavily in its medical and commercial program. In December of twenty twenty four, we and Kiesi announced that the European Medicine Agency or EMA validated the variation submission for PEG unigalsetas alfa to label an additional less frequent dosing regimen of two milligram per kg.

Administered every four weeks in adult patients with Fabry disease in the European Union. The currently approved dose is one milligram per kg administered every two weeks. This application was supported by a revised population PK model and a new exposure response analysis from the clinical data from the previously completed BRIGHT Phase three program as well as its extension study. We look forward to working closely with both Kiesi and EMA throughout their review process. And I would like to emphasize that Kiazi deserves our sincere gratitude for their partnership with Protalix and their dedications to patients with Fabry disease. Our next pipeline candidate also being expressed through Protalix is PRX-one hundred nineteen. PRX-one hundred nineteen is a PEGylated recombinant human DNAS-one product candidate in development for the potential treatment of diseases associated with neutrophil extracellular traps. Or NETs. Preclinical studies are ongoing. As we have been discussing throughout the past year, we have been focusing our R and D efforts on early stage development assets to expand our product development pipeline. This includes leveraging our Protalix platform and pegylation capabilities. Evaluating drug delivery systems that may allow protective delivery of different modalities, and focusing our therapeutic areas to renal rare diseases.

We intend to continue this effort throughout 2025 hope to provide you with further updates as these programs become more mature. For now, let me say that I'm excited about our R and D efforts. And we are laying the groundwork for future developments that may be truly transformative. Finally, in September of twenty twenty four, we repaid in full all of the outstanding principal and interest under our under our 7.5% senior secured convertible promissory notes. The repayment was financed entirely with available cash. In addition, since December of thirty one of twenty twenty four, we have issued $9,908,000 shares of our common stock in connection with the exercise warrants we issued in 2020, generating proceeds of approximately $2,100,000 The warrants expired on March eleven of twenty twenty five Accordingly, no warrants remain outstanding. This is significant for Protalix, making our balance sheet stronger and enable us to continue executing our strategy. With that, it is now my pleasure to turn the call over to Eyal for review of our financials. Eyal, please.

Thank you, Dror. And thank you everyone for joining today's call. Let me review our fiscal year 2024 financials. We recorded revenues from selling goods of 53,000,000 for the year ended 12/31/2024, an increase of $12,600,000 or 31% compared to revenues of $40,400,000 for the year ended 12/31/2023. Increase resulted primarily from an increase of $11,800,000 in sales to Chiesi an increase of $600,000 in sales to Brazil and an increase of $100,000 in sales to Pfizer. We recorded revenues from license and R and D services of $400,000 for the year ended 12/31/2024 a decrease of $24,700,000 or 98% compared to revenues of 25,100,000.0 for the year ended 12/31/2023. Revenues from license and R and D services are comprised primarily of revenues we recognized in connection with our license and supply agreements with Kiesi. Revenues from license and R and D services for the year ended 12/31/2023 included the $20,000,000 regulatory milestone payment from Chiesi in connection with the approval by the U. S. Food and Drug Administration, the FDA, of El Fabrio granted during the period.

The remaining decrease resulted from the completion of our revenue generating research and development obligation with respect to El Fabrio and as El Fabrio was approved in The United States, and the European Union in May 2023, from the completion of the regulatory process related to the review of the biologic license application, the BLA and the marketing authorization the MAA, for El Fabrio by the FDA and EMA respectively. A result of the completion, of the Fabry Clinical Program in 2023, we expect to generate minimal revenues from Lifespan R and D services other than potential regulatory and commercial milestone payments. Cost of goods sold was $24,300,000 for the year ended December 31, 2024, an increase of $1,300,000 or 6% compared to cost of goods sold of 23,000,000 for the year ended 12/31/2023. The increase in cost of goods sold was primarily the result of increase in sales to Chiesi. In addition, during the year ended 12/31/2023, a portion of the cost for certain drug substance sold were recognized as research and development expenses not cost of goods sold as such drug substance was produced as part of our research and development activities. For the year ended 12/31/2024, our total research and development expenses were approximately $13,000,000 comprised of approximately $7,100,000 of salary and related expenses, approximately $2,400,000 subcontractor related expenses, approximately 900,000.0 of materials related expenses and approximately $2,600,000 of other expenses.

For the year ended 12/31/2023, our total research and development expenses were approximately $17,100,000 comprised of approximately 7,800,000.0 of salary related expenses, approximately $6,300,000 subcontractor related expenses, approximately 600,000.0 of materials related expenses and approximately 2,400,000.0 of other expenses. Total decrease in research and development expenses was $4,100,000 or 24% for the year ended 12/31/2024, compared to the year ended 12/31/2023. The decrease in research and development expenses resulted primarily from the completion of our preclinical program and the regulatory process related to the BLA and the MAA review of Infabrio by the applicable regulatory agency. Selling, general and administrative expenses were 12,200,000.0 for the year ended 12/31/2024, a decrease of $2,800,000 or 19% from $15,000,000 for the year ended 12/31/2023. The decrease resulted primarily from a decrease of $1,800,000 professional fees and approximately $1,000,000 in salaries and related expenses. Financial income net was 200,000.0 for the year ended 12/31/2024 compared to financial expenses net of $1,900,000 for the year ended 12/31/2023. The difference resulted primarily from a decrease of approximately $1,400,000 lower interest and related expenses due to the conversion of notes in 2023 and the September 2024 payment in full of the outstanding principal interest payable under the remaining notes as well as an increased interest income net of $700,000 For the year ended 12/31/2024, we recorded income taxes of approximately $1,200,000 an increase of $900,000 or 300% compared to income taxes of $300,000 for the year ended 12/31/2023.

The income taxes resulted primarily from the provision for the current taxes on income mainly derived from GILTI income mainly in respect of Section 174 of The U. S. Tax Cuts and Jobs Act or the TCJA Effective in 2022, Section one and seventy four of the TCJA requires all U. S. Companies for tax purposes to capitalize and subsequently amortize R and D expenses that fall within the scope of Section 174 over five years for research activities conducted in The U. S. And over fifteen years for research activities conducted outside of The US rather than deducting such costs in the current year. Cash, cash equivalents and short term bank deposits were approximately $34,800,000 at 12/31/2024. Income for the year ended 12/01/2024 was approximately $2,900,000 or $0.04 per share basic and diluted compared to $8,300,000 or $0.12 per share basic and $0.09 per share diluted for the same period in 2023. I will now turn the call back to you Dror.

Thank you, Eyal. To conclude, 2024 was an exciting year for Protalix as we are building our foundation for the future. We are gearing up for our anticipated Phase two study of our gout candidate PRX-one hundred fifteen, and we continue to make progress on our early stage R and D efforts. I'm confident that our strategy, balance sheet three streams of revenues will enable the next phase of pipeline development for Protalix. We look forward to updating you on our progress as we continue to drive innovation and create long term value for both patients and stockholders. Now, I would like to ask the operator to open the call for questions. Please.

Thank you. You. Before pressing the star keys. Our first question comes from the line of Ram Selvaraju with H. C. Wainwright. Please proceed with your question.

Hi, thank you very much for taking my questions. And congratulations on what has been an excellent and landmark year for Protalix. I wanted to first of all ask about in the long run, what you expect to be able to provide in terms of revenue guidance based in particular on the royalty stream from El Fabrio and what you anticipate Chiesi would permit you to say about how the revenues from El Fabrio are progressing.

The line was bad. Can you repeat the question please?

Yes. It was specifically about guidance, when you expect you might be able to be in a position to provide such guidance, particularly as it pertains to the royalty based revenue coming from El Fabrio and what you expect Chiesi to permit you to say about how revenues from El Fabrio are progressing.

So first, thank you. Nokia is a private company. We have discussed it in the past, so we are not revealing data on the number of patients and or I would say estimated revenues from Chiesi. What we can say that they do well, actually every week that passes they add patients [indiscernible] We have reported now, if I may say, we think a nice outcome of revenues from different three streams, including Chiesi. Chiesi, along the years, will grow Clearly, you can I mean, royalty most of the revenues will be based on royalty from Chiesi to Protalix, which is a higher margin We say it also in our website, it is written over there that we estimate north to $100,000,000 in revenues from Kiesi 02/1930 estimation, of course? Under what we see in front of our eyes. If the ones in four weeks will fly, it a nice upside, will be higher of course. And we can as I mentioned, it's a higher margin revenue. So as time goes by, and it cannot be I think, judged by the quarter, We have to be to understand we sell to Chiesi's inventory. So we do not sell to their I would say, direct sales.

So in time, in one point years, two years, it will be more ongoing, if I may say, and then we can see a growing I assume, we expect at least steady stream of revenues of higher margin that what we sell to Brazil or to Pfizer from ELISA. [indiscernible] and we cannot give guidance for 2025. As I mentioned, we sell to inventory and but again, just to emphasize, KSI does well. We are pleased with the picture. And we consider this collaboration as positively strategic to Protalix.

Great. And then with respect to PRX 119, I was wondering if you could briefly delineate the differences between PRX119 and your historical program that I believe was designated PRX110? And also if you could provide us with some framework, some frame of reference regarding the size of the market opportunity in NETs that you previously mentioned. For PRX-one hundred nineteen going forward? Thank you.

Sure. So what I can say that PRX-one119 is actually a long acting DNR. PRX-one10 was an acute one. We are finalizing as we speak, if I may say, the indication selection We would like to finalize a couple of activities in addition to another I would say, preclinical model. Then we will update the market. I hope within the coming 1 or 2 quarters. On the size, once we have the indication, we can update about the potential size at least.

Okay. And then lastly, with respect to PRX, hundred 15, I was just wondering if you could provide us with any details regarding the total aggregate cost of the phase two study that you are running. As well as the timeline to release of potential top line data. As well as strategically what you anticipate doing assuming positive results from this study.

Would you expect to take forward clinical development of this asset yourself?

Or at that juncture look to identify a potential development and commercialization partner. Thank you.

So currently, we plan to finance the Phase two without current means. So And we have the means, as we mentioned, we have sufficient, if I may say, resources to finance our operations, including the early R and D and the Phase two of the 115. About the cost, we see something, I would say, north of $20,000,000 on the third parties expenses or expected payments. This is not including labor or internally. Don't forget, we produce it with our own Protalix. So there is a portion which we do it significant portion by ourselves. As for top line results, we estimate something like two years from today. It depends on the pace of enrollment of course. Please understand first patient in will be second planned to be in the second half of this year. I assume that if indeed the outcome will be positive, makes sense that we look for a commercial partner.

Thank you very much. Of course.

Thank you. Our next question comes from the line of John Vandermosten with Zacks SCR. Please proceed with your question.

Thank you. And Yale, do you have the 4Q of Fabio revenue number handy? [indiscernible] I can pull them up. Go on. Yeah.

I'll ask another one while while you pull that up.

Okay.

So on on 01/15, you know, I saw you guys had a poster out. And and I was wondering if you could elaborate on the mechanism of action for 4115 and its and its impact on the urate crystals. Does it actually go after them? I just wanted some clarity on how how that how that mechanism is.

John, I don't fully understand what you mean. Maybe you can define it differently.

Sure. So PRX-one hundred fifteen, I was I was reading through the poster, and it provided a small amount of detail on how it works. And, I I assume it eliminates the uric crystals, does it some other mechanism of action of how it affects gout? And I wanted to see if you had some clarity on that.

What we use is [indiscernible] certain source, which is different than KRYSTEXXA for the sake of our discussion. We have our I would say specific peg to cover the enzyme, which is covered I would say, almost completely. What we see so far and I want to be careful in humans, with hyperuricemia, which participate in the Phase I study that we reduced the uric acid in I would say, quickly, of course, And we see pretty long periods of time that actually [indiscernible] I would say the level of the uric acid is very low. Once we get into patients with, I would say, refractory gout or severe gout, and have results, we can update about the fact of how it does with the tophires and the overall disease.

Okay, great. And just, you all were able to find find that. I know you're gonna file the the ten ten k later. I just was gonna put it in my model. 10 k was filed already, by the way.

Oh, it was? Oh, okay. I didn't see it. Alright. Well, I'll just find it there. That that's all I have this morning. Thank you.

Okay.

Thank you.

Ladies and gentlemen, there are no other questions at this time. I'll turn the floor back to Mr. Bashan any final comments.

So thank you, and thank everybody, that joined the call. We hope to continue and provide good results in the following quarters, of course. We see [indiscernible] high probability, I would say, bright future for Protalix. So thank you very much.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.