Analyst Conference Summary

Biotechnology

conference date: March 6, 2018 @ 5:30 AM Pacific Time
for quarter ending: December 30, 2017 (Q4, fourth quarter 2017)

Forward-looking statements

Overview: Continues pipeline development and discussions with possible partners.

Basic data (GAAP):

[the company released only full year 2017 numbers at the conference. The following Q4 2017 numbers are from the 10-K.]

Revenue was $2.4 million, down 68% sequentially from $7.5 million, and up 14% from $2.1 million year-earlier.

Net income was negative $15.1 million, down sequentially from negative $11.4 million, and down from negative $2.6 million year-earlier.

EPS was negative $0.11, down sequentially from negative $0.09, and down from negative $0.02 year-earlier.

Guidance:

none

Conference Highlights:

Moshe Manor, Protalix’s CEO, said “Looking ahead to 2018, we expect to generate and release more data regarding our clinical trials, and to continue the progress of our programs, both with potential partners and with our current partner, Chiesi Farmaceutici."

All revenue in Q4 2017 from Chiesi has been deferred.

For PRX-102, Pegunigalsidase alfa, for Fabry disease Phase 3 studies continued enrollment, with completion expected in 2018. 12-month interim data analysis expected in 2H 2018. It is a 24 month study. [See PRX-102 press release for details] In October the ex-U.S. rights were sold to Chiesi Farmaceutici S.p.A, with Protalix to receive $25 million upfront, an additional up to $25 million in development costs and an additional up to $320 million in potential regulatory and commercial milestone payments. If commercialized Protalix to receive tiered royalties ranging from 15% to 35% on net sales. PRX-102 received Fast Track designation in the U.S. and Orphan Drug designation in the EU.

For PRX-110, Alidornase alfa, for Cystic Fibrosis, the foundation grant is still under review. In active discussions with potential partners.

OPRX-106, an oral anti-TNF for ulcerative colitis Phase 2 top line results should be available in March 2018. Preliminary partnership discussions have begun.

An oral version of Humira is being worked on, no timeline for moving to clinical trials.

After the quarter ended $2.6 million of alfataliglicerase was shipped to Brazil.

Cash balance ended at $51.2 million, up sequentially from $33.5 million. During the quarter received $25 million from Chiesi. $52 million in convertible notes due in 2021 are outstanding. Cash used in operations for the full year 2017 was $10.0 million.

Believes has funding into 2020 using present cash only. Chiesi agreement could pay off a significant amount of convertible notes.

Q4 2017 figures not available. Cost of revenue was $ million, leaving gross profit of $ million. R&D (net of grants) expense $ million. SG&A $ million. Leaving an operating loss of $ million. Financial expense $ million, financial income $0 million.

For the full year 2017 revenue was $19.2 million, up from $9.2 million in 2016. Non-GAAP Net loss was $47.2 million; GAAP net loss was $85.3 million. Non-GAAP EPS negative $0.36.

Q&A:

Fabry program enrollment timeline? All three trials should finish enrollment in 2018.

Data readout timeline for Fabry? Too early to say which trial will finish first. Readouts will likely be in 2019.

PRX-110 future trials? We are talking to a couple of potential partners. Next would be a Phase 2b study. Question of whether to start first, or partner first; probably partner first.

2018 revenue? Alfataliglicerase guidance is difficult, given chopiness of orders from Brazil. But we are seeing more prescriptions there.

102 timeline, interim data? One year from last patient enrolled, so in 2019.

Chiesi commercial production timeline? Too early to say, maybe after clinical trial results.

How are partners seeing Humira oral candidate? Partners like the data, want to see the full 106 data. They are interested in the oral platform, not just a future Humira equivalent.

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