Analyst Conference Summary

Biotechnology

conference date: November 6, 2023 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2023 (Q3, third quarter 2023)

Forward-looking statements

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

Basic data (GAAP):

Revenue was $10.3 million, down sequentially from $35.1 million, and down 16% from $14.2 million year-earlier.

Net income was negative $1.9 million, down sequentially from $19.3 million, and up from negative $3.6 million year-earlier.

EPS (diluted) was negative $0.04, down sequentially from $0.21, but up from negative $0.7 year-earlier.

Guidance:

none

Conference Highlights:

Dror Bashan, Protalix's CEO, said "We continued our efforts this quarter towards turning Protalix into a fully-sustainable biopharmaceutical company with a growing pipeline of differentiated proprietary assets. With the approval of Elfabrio® by the U.S. FDA and the European Medicines Agency earlier this year, we are pleased to see our commercial partner Chiesi Global Rare Diseases hit the ground, both in the United States and the European Union. Additionally, Chiesi is continuing to position Elfabrio for future growth with additional approvals worldwide. Our strong balance sheet coupled with our growing revenue stream allows us to focus on the continued development of our growing pipeline of assets, including PRX-115, our recombinant PEGylated uricase in development for the potential treatment of severe gout. We are continuing to enroll patients in our Phase I clinical trial evaluating the safety, pharmacokinetics, pharmacodynamics and immunogenicity of PRX–115, and look forward to continuing to progress this product candidate forward, We are proud of our achievements and look forward to an exciting future as a company with a proven platform and two approved drugs, a rich pipeline of product candidates in lucrative markets, a world-class team of dedicated employees, strong financial support with a solid balance sheet and an increasing stream of revenues."

On May 10, 2023 the FDA approved Elfabrio (pegunigalsidase alfa) for Fabry disease. Also with Chiesi. 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. On August 15 chiesi announced the UK granted marketing authorization. On September 11, 2023 Switzerland granted approval.

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 was $10.2 million. Taliglucerase alfa for Q3 2023 was $7.2 million, down y/y on lower sles to Pfizer; and $3.0 in sales of Elfabrio to Chiesi. Revenue from license and R&D services was $0.2 million

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 42 patients dosed by November 6, and dosing completion around the end of 2023. Top line results are expected in mid-2024. 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 ?net related diseases.

Cash and equivalents balance ended at $41 million, down sequentially from $48.2 million. Debt is $20.2 million in convertible notes due in 2024.

Cost of goods sold was $4.9 million. R&D (net of grants) expense $3.7 million. SG&A $3.7 million. Leaving an operating income of negative $1.9 million. Taxes $0.1 million. Financial income $0.2 million.

Q&A selective summary:

Sequential drop in revenue, expect for 4th quarter? Decrease in sales to Pfizer and Chiesi. Sales to Chiesi originally were sales for inventory. No Q4 revenue guidance, given that we get no guidance from Chiesi and Pfizer.

Elfabrio approvals? Note UK and Switzerland are not in EU, so needed specific approvals. Does not have data on size of Fabry market in UK.

PRX-115 trial exclusion criteria? The participants are volunteers with hyperuricemia. Emphasis is on safety and dosage. But will be for severe gout patients.

Cost structure? We only need to run manufacturing 3 to 4 months per year.

Capital structure? We are hoping revenue will increase and we will begin to accumulate cash. We see no need to raise money in the immediate future. We expect fluctuations in the demand from Chiesi as they enroll paitents and build up inventory.

PRX-119? Will gather preclinical data then have a go or no-go meeting.

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