Protalix Biotherapeutics Inc (PLX) 2022 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Protalix First Quarter 2022 Financial and Business Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I will now turn the conference over to your host, Alexandra Schuman of LifeSci Advisors, Investor Relations for Protalix. You may begin your conference.

Thank you, operator, and welcome to the Protalix BioTherapeutics First Quarter 2022 Financial Results and Business Update Conference Call. With me today are Dror Bashan, President and CEO of Protalix; and Eyal Rubin, Senior Vice President and Chief Financial Officer.

A press release announcing the results and the update was issued this morning and is available now on the Protalix website.

Please take a moment to read the disclaimer about forward-looking statements in the press release. The earnings release and this teleconference include forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and in Protalix's filings with the United States Securities and Exchange Commission.

I will now turn the call over to Mr. Dror Bashan. Dror?

Thank you, Alexandra, and welcome, everyone, to our first quarter 2022 financial results and business update call. I will begin with a review of our progress and accomplishments over the first quarter, along with our plans for the coming months. Following my remarks, Eyal will provide a more detailed review of our financial results. We will then open the line for questions, of course.

Let me begin with a summary of the positive top line results announced in April from our Phase III BALANCE clinical trial of PRX-102 for the treatment of Fabry disease in adults. We are very pleased to report that the trial successfully met its primary endpoint and that the data showed a favorable tolerability and immunogenicity profile for PRX-102. We plan to provide a final analysis of the BALANCE study in the third quarter of this year after we have completed all analysis and discussions of the collected data.

At our KOL event, which also took place in April, Dr. David Warnock from the University of Alabama at Birmingham described the BALANCE study, the top line results of the BALANCE study and our next steps. He also provided an overview of the $2 billion market -- Fabry market, described the need for additional therapies and the potential of PRX-102 to meet a significant unmet need of the Fabry community patients.

The company, together with its development and collaboration partner, Chiesi Global Rare Disease or Chiesi, currently plan to resubmit a biological license application or a BLA to the FDA in the second half of this year and continue to be on track to achieve that goal. It is intended that the BLA package will include the positive results from the company's 3 Phase III clinical trials, the BALANCE, BRIDGE and the BRIGHT studies and, of course, the company Phase I/II study which was conducted before.

As announced, last October, after the company and Chiesi participated in a Type A end-of-review meeting with the FDA, the company and Chiesi gained clarity on the pathway for approval. The company believes that it has a compelling and consistent data sets from both treatment-naive and enzyme replacement therapy, experienced patients for inclusion in the BLA resubmission.

In Europe, we and Chiesi submitted the Marketing Authorization Agreement or MAA for the PRX-102 with European Medicine Agency, or EMA on February 7, 2022, which was subsequently validated by the EMA.

We believe Protalix is starting a transitional period. The [robust data] from the 3 Phase III studies demonstrating the potential of PRX-102 to be a good treatment for patients with Fabry disease, with full in-house manufacturing capabilities, a commercialization plan with our global partner, Chiesi and a clear pathway towards the anticipated approval of PRX-102. Additionally, we have a pipeline of existing early-stage program that we will be highlighting as the progress in development. Our strategy is to continue investing in new product candidates to support our goal of becoming global, commercial, world-class biopharmaceutical company.

Finally, our balance sheet provides us with sufficient cash runway until Q3 of 2023, enough to support our plans for resubmission and potential approval, in addition to the continuing to develop our early-stage pipeline. We continue advancing our early-stage pipeline. We'll share the progress made once available.

I will now turn to Eyal to review our financial results. Eyal, please go ahead.

Thank you, Dror, and thank you, everyone, for joining today's call. Let me review our first quarter 2022 financials.

For the quarter ended March 31, 2022, we recorded revenues from selling of goods of $9 million, an increase of $4.5 million or 100% compared to revenues of $4.5 million for the same period of 2021.

Revenues from licenses and R&D services for the quarter ended March 31, 2022, were $7.1 million compared to $6.8 million for the quarter ended March 31, 2021. Earnings from license and R&D services represent the revenues the company recognized in connection with its license and supply agreements with Chiesi.

Cost of goods sold was $6 million for the 3 months ended March 31, 2021 (sic) [March 31, 2022], an increase of $1.2 million or 25% versus $4.8 million for the same period last year. The increase in cost of goods sold was primarily the result of higher sales.

Research and development expenses for the 3 months ended March 31, 2021 (sic) March 31, 2022 , were $8.8 million, an increase of $1.7 million or 24% compared to $7.1 million for the same period last year. The increase primarily is the result of subcontractors costs related to the completion of the company's Phase III clinical trial of PRX-102 and maintaining the company's related extension studies.

Selling, general and administrative expenses were $3.2 million for the 3 months ended March 31, 2022, an increase of $0.1 million or 3% versus $3.1 million for the same period last year.

Financial expenses, net, were $0.4 million for the 3 months ended March 31, 2022, a decrease of $1.4 million or 78% compared to $1.8 million for the same period last year. The decrease resulted primarily from lower interest and better amortization costs due to a decrease in the total principal amount of the company's outstanding notes. In the August 2021 exchange transaction, the company exchanged an aggregate principal amount of $57.92 million of the 2021 notes for cash and an aggregate principal amount of $28.75 million of newly issued 2024 notes, effectively cutting the debt by about 50%.

As of March 31, 2022, our cash, cash equivalents and short-term bank deposits were approximately $32.9 million compared to $39 million as of December 31, 2021. We believe that our current financial position provides us with sufficient cash runway through the third quarter of 2023.

I will now turn the call back to you, Dror.

Thank you, Eyal. So thank you, everyone, for joining us on today's call. We look forward to the BLA resubmission in the U.S., hearing from the EMA on the MAA submission in Europe and working closely together with our partner, Chiesi, to successfully bring PRX-102 to the market. We are extremely excited by the opportunity ahead of us and looking forward to bringing this important potential treatment option for adult patients with Fabry disease.

Now I will turn the call back to the operator and open the line for questions, please.

(Operator Instructions) Our first questions come from the line of John Vandermosten with Zacks.

I wanted to ask about the clock stop coming up pretty soon for the EMA submission. Does the MAA give any indication of things that they may ask prior to the clock stop? Or do you pretty much have to wait and see what they want to know?

We are waiting for the input.

Okay. Very good. And another thing related to the EU, now that the U.K. has left the EU, what's the process there to get access to that market? I think I looked up and I saw there are about 900 individuals that might benefit from PRX-102. Is there anything additional that needs to be done there? Or are they still kind of hanging on in terms of accepting approvals by the EMA?

So, John, this topic, I have to verify and get back to you maybe later today, tomorrow, okay? I think I know the answer, but I prefer to answer you accurately. Okay? If it's okay?

Okay. Yes, no problem. And I mean that's -- I mean I think they're in some kind of weird thing right now. And actually, I don't even know myself kind of how...

Yes, yes. But it's a very good question, John, so -- but I will get back to you shortly.

Sounds good. Sounds good. And -- let's see, and any -- I think you probably touched on this a little bit, just anything that sticks out in your mind that needs to get done now that we're finished with the BALANCE trial for the FDA submission? I mean I guess you're just compiling information and putting together -- putting things together for that second half. Is there anything that sticks out in your mind that's particularly important there?

Everything is reported, if I may say. So indeed, we are analyzing and finalizing the (inaudible) of the BALANCE, looking at all 4 clinical trials back and forth, including all the safety data. We have many hundreds of years, if I may say, exposure on the drug which reflecting a very good safety profile. So it's actually just to look, if I may say, to connect the dots and see the full picture and strengthen the totality of the data, if I may say.

Okay. Last one for me is just a finance cash flow question. Eyal, can you explain the difference between the net loss and the cash from operations or the cash used in operations? And what was attribute -- that difference was attributable to?

Yes. Obviously, the net loss includes the depreciation, includes noncash, such as the share risk compensation. It's not transferred 1:1 into the cash position. As we mentioned many times in the past, our quarterly net burn rate is approximately $6 million a quarter. And I think that if you run the numbers, that's where we are for the past 2-plus years.

John, and I will get back to you.

(Operator Instructions) There are no further questions at this time. And on behalf of Protalix, this does conclude today's teleconference. We do appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.