Protalix Biotherapeutics Inc (PLX) 2018 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Protalix BioTherapeutics First Quarter 2018 Conference Call. (Operator Instructions) I would now like to introduce your host for today's conference, Mr. Yossi Maimon, Chief Financial Officer. You may begin.

Thank you. Hello and actually good morning, everybody. Welcome to the Protalix BioTherapeutics first quarter earnings call. With me today is Moshe Manor, President and CEO. A press release announcing the result is available on our website and a Form 10-Q will be filed later tonight.

Please take a moment to read the disclaimer about forward-looking statements in the press release. The earning release and this teleconference includes forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors could cause actual results to differ or describe in the disclaimer as in our filing with the SEC.

I will turn now the call over to Mr. Moshe Manor.

Thank you, Yossi. Good morning and thank you all for joining us this morning. I'm happy to be here today to discuss progress Protalix has made over the past quarter. During the call I will provide a corporate update and then turn the call over to Yossi to review the company's financials.

Starting first with our lead program pegunigalsidase alfa, or PRX-102, for the treatment of Fabry disease. We have continued to open additional clinical trial sites for the BALANCE, BRIDGE, and BRIGHT studies. Patient enrollment is currently ongoing in nearly 50 sites. Enrollment remains on track to be completed by yearend.

With respect to the BALANCE study, blood samples have been collected for certain patients as part of the screening process and then tested for presence of anti-drug antibodies and neutralizing activities and the cause of activity in addition of such antibodies to PRX-102. We are very encouraged by the initial rate of such tests and are happy to report that the European Renal Association has accepted the data for a poster presentation that will be held on May 25th at the 55th European Dialysis and Transplant Association Congress in Denmark.

Also during the past quarter, we reported positive top-line results from our Phase 2a trial of OPRX-106 for the treatment of ulcerative colitis. As you may recall, OPRX-106 is a plant cell-expressed recombinant anti-tumor necrosis factor alpha in development for oral administration. When administrated orally and while passing through the digestive track, the plant cell functions as a natural delivery vehicle, having the unique attribute of a cellulose cell wall, which makes them resistant to degradation compared to proteins produced via mammalian cell expression.

The top line result demonstrated that the key efficacy end points of the study were met with 67 percent of patients experiencing a clinical response and 28 percent of patients experiencing a clinical remission. In addition, other secondary efficacy end points were also achieved including 72 percent of patients showing an improvement in rectal bleeding scores, 72 percent of patients demonstrating an improvement in fecal calprotectin, and 61 percent of patients showing improved Geboes score, which is a histopathological scoring for the assessment of disease activity in ulcerative colitis.

On top of that, OPRX found to be biologically active in the gut with no anti-drug antibody formation and without systemic absorption. This can potentially result in a safe therapy and a long-term response.

On the safety front, OPRX-106 was safe and well-tolerated with only mild to moderate adverse events, which were transient in nature. An oral presentation detailing the patient by patient results has been accepted for presenting at the Digestive Disease Week 2018 Annual Meeting in Washington, D.C., which is being held June 2nd through the 5th. The presentation will include significant new clinical data, which we believe further support the consistent benefit of patients over various endpoints.

I will now turn back the call to Yossi, who will provide the financial overview.

Thanks, Moshe. So for the first quarter ending March 31st, 2018, Protalix reported a net loss of $9.4 million or $0.06 per share, basic and diluted, compared to a net loss of $8.4 million or $0.07 per share, basic and diluted, for the same period of 2017, which also included -- which actually excluded a one-time cash charge of $52.3 million in connection with remeasurement of a derivative back in 2017.

Protalix reported a total revenues of $4.6 million for the first quarter of 2018 compared to $2.9 million for the same period of 2017. The increase is attributed primarily to increase in sales of taliglucerase alfa in Brazil.

Research and development expenses were $7.3 million for the first quarter of 2018 compared to $6 million for the same period of 2017. SG&A were $2.5 million for the first quarter of 2018 and 2017. As of March 31st, 2018, we had $41.3 million in cash. We expect to realize a reduction in operating cash consumption going forward mainly as the full effect of (inaudible) R&D support will come into play.

Lastly, I just wanted to touch upon a concern we've been hearing around upcoming potential dilution and especially, I guess, that's due to the increasing authorized request. I want to be clear that currently we do not have any plan for growing that [support] back in the near future. And while we cannot guarantee, of course, we believe that the next inflow of funds into the company would come in a non-dilutive manner, which is still on target for happening in 2018.

With that, I will turn now the call to the operator who will open up the call for questions from the audience. Operator?

(Operator Instructions) And our first question comes from the line of Ram Selvaraju from H.C. Wainwright.

Hi. Thanks very much for taking my questions. So I have two types of questions here. Firstly, with respect to the BALANCE, BRIDGE, and BRIGHT studies, can you confirm that all of the clinical sites that you originally planned to have involved in these programs are up and running, and open for enrollment, or if you're still awaiting additional clinical sites to come online? If enrollment proceeds in a manner that is, perhaps, a little slower than you originally projected, do you have the ability to bring additional clinical sites online? And how much of a difference do you expect that to be likely to make in the event of enrollment being slower than expected?

And then secondly, with respect to the pipeline assets, particularly 106 and alidornase, can you give us, perhaps, some additional insight into strategic discussions that you may be having around these assets? And what do you anticipate might be a reasonable time line for the conclusion of those kinds of, for example, out-licensing discussions? Thank you.

Thanks, Ram. It's Yossi. I'll try to tackle those one at a time. So I think in terms of the number of sites that we envisioned, so, yes, I think all the sites are up and running. All of them are recruiting patients. Obviously, I think that -- and maybe theoretically, the more sites we'll have, the more enrollments will come along. But I think that we're satisfied with where it is today. And it's relatively spread well out the U.S. and actually global. So I think that on this front, I think that we are set, even with more sites that we envisioned initially.

In terms of the pipeline, I think that as we mentioned and as Moshe specifically just mentioned now, I think that we're going to have a very interesting opportunity to discuss in more detail and with new significant clinical data around the 106 in the DDW conference, which is about a month from now. I think that there's going to be a decent amount of new clinical information that is going to be relevant that I believe will further support the consistency of the efficacy that we have seen in patients throughout the different end points that we have looked, including new ones that we will share, and also across almost all patients as we will share detailed per patient results as well.

I think it's too early to say and I think we've been talking about it for too long about executing this. All I would say and I want to refrain from saying exactly when, there's a lot of interest, but I want to be careful this time not to over-promise. We want to over-execute. So I'll leave it at that. There's interest. I don't want to go into more detail than that.

And our next question comes from the line of Peter Welford from Jefferies.

Got a couple. Firstly, just on Brazil. I know it's a difficult topic to predict anything, but after the (inaudible) first quarter, I wonder if you can give us any sort of updates in terms of orders that you've seen or shipments, and how we should think about Brazil.

Going on then to just the data from 102. Are you still expressing that there is unlikely to be any readouts from the PRX-102 trials during this year and it's more likely to be in the 2019 before we see any data?

And then just on partnerships. I totally understand you don't want to provide any details at this stage, but can you just perhaps comment. If you compare 110 to 106, are there any additional data sets you think you need or would like to get in house either pre-clinical or clinical before you can finalize discussions? Or do you think now for both those programs all the data you have are available to proceed and close potentially a deal? Thank you.

So I'll start with Brazil then -- yes, I think we want to be very careful about saying anything about shipments. Maybe all I can say is that we do see an increase in number of patients on our [brand]. Period. Full stop. That's a fact and that we can say.

How will that -- and in a significant manner, I don't have the exact numbers, but I would say it's a significant increase from going from one quarter to another. When and if will that be translated into shipments, we still don't know as it's very -- the visibility is low and it remains that way. I guess that's just the way it works in Brazil; at least that's our experience. But we do see that we have more patients on the drug. That's all we can say, and I want to be careful what I say more beyond that. And this is very -- a very good indication, but I think we'll be more excited to see that translated into dollars.

In terms of readouts for 102, I think in 2019 -- we don't expect to have any data in 2018. I think that we will start reporting end of enrollments for each of these trials in 2018 but data will be in 2019. Although, as Moshe indicated now and also in the press release, we will have interesting data from patients that have been screened for the BALANCE study about presence of antibodies for long-term patients on Fabrazyme, the level of neutralizing antibodies, and then how will these -- how these basically have reacted when introduced to 102. I think that has been a question a lot of people were wondering, and I think that we're excited to share more data in less than a month. I think it's three weeks away.

In terms of partnership, I think that we basically have completed all trials that we want to have. I think that, again, with 106 data, full data, to be disclosed in the DDW in June, I think then it will be the open and shut for everybody to have a deeper look into the data. And I think that this is when we will have more in-depth discussions around this asset at least. So short answer is, yes, I think we're done.

Peter, this is Moshe. Just to [complete], on the 106, definitely we have the data including the pre-clinical and other lab data, and we are continuing to analyze that. But all of this data is additional data that will further support the [whole wide] concept for 106. On 102, I think what we just said and we will release the data, as we said, in two weeks on the course of activity, that's an important factor. But we can say at this point of time is this -- the data really supports the notion of bringing a superior product to the market over, let's say, the existing [ELT]. So that's really in a good direction, what we are expecting; clinically as well.

And at this time, I'm showing no further questions. I'd like to turn the call back over to Yossi Maimon for any closing remarks.

Hi. This is Moshe. So thank you all for joining us on the call this morning. We look forward in just a few short weeks to sharing with you the clinical data presentation both on PRX-102 and OPRX-106 that will be presented at the European Renal Association, European Dialysis and Transplant Association Congress, and the Digestive Disease Week Conference. The data will be announced publicly around the same time it is being presented at the conference. We will also post a presentations and the poster on our website for you to review.

And with that, I would like to thank you all for your continued support and have a great day. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.