Analyst Conference Summary

Biotechnology

conference date: August 7, 2023 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2023 (Q2, second quarter 2023)

Forward-looking statements

Overview: Working on launches by Chiesi of Elfabrio (PRX-102) in Europe and the United States, post FDA approval in May 2023.

Basic data (GAAP):

Revenue was $35.1 million, up sequentially from $9.6 million, and up from $8.8 million year-earlier.

Net income was $19.3 million, up sequentially from negative $3.1 million, and up from negative $5.3 million year-earlier.

EPS (diluted) was $0.21, up sequentially from negative $0.05, and up from negative $0.11 year-earlier. The number of shares outstanding rose to 83.2 million from 47.3 million year-earlier.

Guidance:

Has a cash runway to the first quarter of 2024.

Conference Highlights:

Dror Bashan, Protalix's CEO, said "2023 has been a transformational year for Protalix thus far. We are very proud to have received regulatory approval for Elfabrio in both the United States and the European Union, a significant milestone for adult Fabry disease patients and their families alike. Our commercial partner, Chiesi Global Rare Diseases, has the expertise and global reach to maximize the potential of Elfabrio, and Chiesi has already launched the product in the United States. As the second approved drug from our proprietary platform, this approval not only validates our recombinant protein expression platform but also our strong clinical and regulatory expertise in rare diseases. We now turn our focus to strengthening our rare disease pipeline programs and building a sustainable portfolio. We extend our gratitude to our team and dedicated partners for their commitment to our programs and more importantly to patients in need." Focus going forward is further develpment of the pipeline.

On May 5, 2023, with partner Chiesi Global Rare Diseases, the EMA approved Elfabrio (PRX-102, pegunigalsidase alfa) for the treatment of adult patients with Fabry disease.The Company and Chiesi submitted an MAA to the EMA for PRX-102 on February 24, 2022.

On May 10, 2023 the FDA approved Elfabrio (pegunigalsidase alfa) for Fabry disease. Also with Chiesi.

In Q2 2023 Protalix received a $20 million milestone payment from Chiesi.

The Fabry market is about $2 billion. There is competition for it.

In June 2023 Protalix was added to the Russel 3000 index.

Revenue from sales of taliglucerase alfa for Q1 2023 was $3.4 million; from license and R&D services was $20 million; and $11.7 in sales of Elbabrio to Chiesi, which is working to bring the drug to global markets.

On March 27, 2023, Protalix announced that the first patient was dosed in a Phase I clinical trial of PRX–115, a recombinant PEGylated uricase product candidate under development as a potential treatment for severe gout. Enrollment continues, with 16 patients dosed by August 7, and dosing completion around the end of 2023. The FIH trial is a double-blind, placebo-controlled, single ascending dose study designed to evaluate the safety, pharmacokinetics, pharmacodynamics and immunogenicity of PRX–115 in approximately 56 patients with elevated uric acid levels (>6.0 mg/dL) and no previous exposure to PEGylated uricase.

PRX-119 still in preclinical work on identifying a potential target.

Cash and equivalents balance ended at $48.2 million, up sequentially from $33 million. Debt is $20.1 million in convertible notes due in 2024.

2022 Cost of goods sold was $6.1 million. R&D (net of grants) expense $4.5 million. SG&A $4.0 million. Leaving an operating income of negative $20 million. Taxes $0.3 million. Financial expenses $0.8 million.

Q&A selective summary:

Elfabrio launch, pricing? Chiesi is private, 100% responsible. Launched in U.S., being approved country by country in the EU. Hope to share more later. We are very pleased with Chiesi.

PRX-115 uric acid levels? Wait for data, goal is to reduce uric acid levels.

Pipeline stategy? Refined pathway going forward. In rare genetic space. Our system for plant-based products is agnostic. We will develop products until we can find a partner, though longer term we could develop therapies internally.

Elfabrio pediatric or other future studies? We produce the drug for Chiesi, they have a long-term plan including a pediatric and a pregnant woman study. Chiesi is developing a deep, long-term plan.

Revenue flow through? Inventory build? 15% to 40% royalties plus milestones. So far our sales were for inventory buildup, which earns us royalties. We are not providing projections, but we believe in Q3 will continue to build inventory, then over 2 to 3 years sales should build. We recognize revenue as soon as we sell inventory to Chiesi.

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