Analyst Conference Summary

Biotechnology

conference date: May 14, 2021 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2021 (Q1, first quarter 2021)

Forward-looking statements

Overview: Received a Complete Response Letter because FDA could not inspect foreign manufacturing facilities by PDUFA date of April 27.

Basic data (GAAP):

Revenue was $11.3 million, down sequentially from $na million, and down from $21.6 million year-earlier.

Net income was negative $5.5 million, down sequentially from negative $na million, and down from $1.7 million year-earlier.

EPS was negative $0.14, down sequentially from negative $na, and down from $0.10 year-earlier.

Guidance:

Believes cash runway to Q2 2022.

Conference Highlights:

Dror Bashan, Protalix's CEO, said "While the receipt of the Complete Response Letter last month from the FDA was disappointing, we are encouraged that the FDA did not report any potential safety or efficacy concerns for PRX-102. We are working closely with the FDA and anticipate the required inspection and subsequent assessment will be completed once the FDA's travel restrictions are lifted. We continue to advance our earlier stage pipeline and anticipate continued progress throughout 2021. "

Received a Complete Response Letter on the PDUFA date, April 27, 2021. Protalix and Chiesi submitted the BLA for PRX-102, Pegunigalsidase alfa, for Fabry disease, 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. Now must resubmit, could be delayed further due to the FDA need to inspect facilities in Europe and Israel. The Phase 3 BALANCE and the BRIGHT trial have completed enrollment. Plans to request a type A meeting with the FDA by the end of July. Full Phase 3 results from the Balance trial are due in the next few weeks, which could serve for the EU filing.

Because of the CLR Protalix decided to raise funds by entering, in May 2021, a new agreement with Chiesi. Protalix recieved a $10 million milestone payment in exchange for a $25 million reduction in a later potential milestone.

On February 23, 2021, Chiesi and Protaliz, announced positive topline results from the phase III BRIGHT clinical trial, of PRX-102, 2 mg/kg every four weeks, in up to 30 patients with Fabry disease previously treated with agalsidase alfa (Replagal) or agalsidase beta (Fabrazyme). Topline results indicate that PRX-102 administered by intravenous infusion every four weeks was found to be well tolerated among treated patients, and stable clinical presentation was maintained in adult Fabry patients.

On December 30, 2020, Protalix and Chiesi announced final study results from the phase III BRIDGE clinical trial, a 12-month open-label, single arm switch-over study evaluating the safety and efficacy of PRX-102, 1 mg/kg infused every two weeks, in up to 22 Fabry patients. It showed substantial improvement in renal function as measured by mean annualized estimated Glomerular Filtration Rate (eGFR slope) in both male and female patients who were switched.

On February 17, 2021, the Company successfully completed a public offering of its common stock raising gross proceeds of approximately $40.2 million at $4.60 per share.

On February 10, 2021, Protalix entered into an exclusive partnership with SarcoMed USA for the worldwide development and commercialization of alidornase alfa (PRX-110), for use in the treatment of any human respiratory disease including, sarcoidosis, pulmonary fibrosis and other related diseases via inhaled delivery.

Expanded access program for PRX-102 was launched in October 2020.

Has other potential therapies in preclinical development. PRX115 and PRX119 could enter clinical trials in 2022.

Revenue generated by taliglucerase alfa sales was $4.5 million, up sequentially from $3.3 million, and down from $5.0 million year-earlier. $6.8 million of revenue was from licensing and R&D services.

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

Cash and equivalents balance ended at $70 million, up sequentially from $38 million. Debt is $55 million in convertible notes. Raised about $49 million in Q1 2021.

Cost of goods sold was $4.8 million. R&D (net of grants) expense $7.1 million. SG&A $3.1 million. Leaving an operating loss of $3.7 million. Financial expense $1.8 million.

Q&A summary:

Would PRX-102 be approved upon successful facility inspection? All topics have to be discussed with the FDA, including approval of the drug itself. [WM: So no guarantee even if facilities are approved.] The Type A meeting will give us clarification on how to go forward.

It could be possible to get a virtual inspection, but the FDA would have to agree to that.

We have no idea when the FDA could inspect our sights, even after a successful Type A meeting. After the meeting, we have to make a resubmission.

Impact of full approval of Fabrazyme? We plan to discuss that with the agency. Resubmission after the BLA is a six month process.

The CRL has no impact on the submission to the EU.

French facility issues? No comment on specifics, but working to resolve these issues with the FDA.

We are updating the briefing book, it could include more recent data for the new application.

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