Analyst Conference Summary

Biotechnology

conference date: June 1, 2020 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2020 (Q1, first quarter 2020)

Forward-looking statements

Overview:

Basic data (GAAP):

Revenue was $21.6 million, down sequentially from $3.8 million, and up from $10.4 million year-earlier.

Net income was $1.7 million, up sequentially from $0.3 million, and up from negative $ million year-earlier.

EPS was $0.10, up sequentially from $0.02, and up from negative $0.50 year-earlier.

Guidance:

none

Conference Highlights:

Dror Bashan, Protalix's CEO, said "During the quarter, we were able to close a $43.7 million private placement. Furthermore, the topline results from the completion of our Phase III BRIDGE study and the subsequent BLA submission for PRX–102 announced in May prove that Protalix has actually gained momentum by leaning into this unprecedented challenge. I am convinced now more than ever that our team is positioned for long-term success and look forward to continuing our momentum through the rest of this year and into 2021."

Protalix and Chiesi submitted the BLA for PRX-102, Pegunigalsidase alfa, on May 27, 2020 via the FDA's Accelerated Approval pathway based on data from the completed Phase I/II clinical trials of PRX-102 and the ongoing Phase III BRIDGE clinical trial. The Company had announced positive 12-month interim on-treatment data from the first 16 out of the 22 adult patients (9 males and 7 females) enrolled in the BRIDGE Phase III open label switch-over study of PRX-102 for the treatment of Fabry disease. The interim data demonstrate a mean improvement in kidney function, in both male and female patients, when switched from agalsidase alfa (Replagal) to PRX-102. The Phase 3 BALANCE and the BRIGHT trial have completed enrollment. In February 2020, Protalix and Chiesi announced the receipt of an agreement letter from the FDA for the Initial Pediatric Study Plan (iPSP) for PRX-102 for the treatment of Fabry disease.

Protalix on March 11, 2020 secured securities purchase agreements to raise proceeds equal to $43.7 million through a private financing with a number of leading Israeli and U.S. investors. 17.6 million shares paired with warrants to purchase one share at $2.36 were issued

On March 16, 2020, the Company announced that it has agreed to conduct a feasibility study with Kirin Holdings Company to evaluate the production of a novel complex protein utilizing ProCellEx. The Company received a non-refundable payment of $1.0 million and Kirin will provide research funding for cell line engineering and protein expression studies on the target protein.

Revenue generated by taliglucerase alfa sales was $5.0 million, up sequentially from $3.8 million, and up from $3.5 million year-earlier. $16.6 million of revenue was from licensing and R&D services.

On February 6, 2020, Protalix and Chiesi announced the receipt of an agreement letter from the FDA for the Initial Pediatric Study Plan (iPSP) for PRX-102 for the treatment of Fabry disease, outlining an agreed-upon approach to address the needs of pediatric Fabry patients.

For PRX-110, Alidornase alfa, for Cystic Fibrosis, for now the focus is on other programs, to conserve cash.

OPRX-106, an oral anti-TNF for ulcerative colitis Phase 2 top line results were positive. In discussions with portential partners.

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

Cash balance ended at $36.7 million, up sequentially from $17.8 million. Debt is $51 million in convertible notes. Protaliz is eligible to receive a milestone payment from Chiesi when if the 102 BLA is approved.

Cost of revenue was $3.4 million. R&D (net of grants) expense $10.3 million. SG&A $3.2 million. Leaving an operating income of4.7 $ million. Financial expense $3.0 million.

Q&A summary:

Timeline for approval? Waiting for PDUFA, depends on if they give priority review.

Chiesi experience in U.S.? They have an office in Boston with extensive experience in drug sales. They are preparing for the potential launch next year.

Covid effects on trials? Nothing so far.

Other licenses? We are working on other collaborations, we will report them as they occur.

Do you expect an FDA advisory committee meeting? First we need to see if the FDA accepts the application and gives us a PDUFA date.

Will a facility inspection be needed? We wee expected in July 2019, we are ready for another inspection if necessary.

The recently issued warrants have not been exercised, they are blocked for six months.

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