Protalix Biotherapeutics Inc (PLX) 2025 Q3 法說會逐字稿

Greetings and welcome to the Protalix Biotherapeutics 3rd quarter financial and business results conference call. At this time, all participants are on a listen-only.

A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Moyer, Investor relations.

Thank you, sir. You may begin.

Thank you.

One moment please.

Thank you, operator, and welcome to the Protalix Biotherapeutics.

Third quarter 2025.

Financial results and business update conference call.

With me today are Jor Bashan, CEO of Palix.

And Gilad Mamla.

Senior Vice President and Chief Financial Officer. A press release announcing the financial results for the quarter and corporate updates was issued this morning and is available now on the Pelic website. Please take a moment to read the disclaimer and forward-looking statements in the press release. The earnings release and 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 in the Fertalix filings, and with the US Securities and Exchange Commission. I will now turn the call over to Mr. Bashan.

Drawer.

Thank you, Mike, and thank you everyone for joining this call. I will begin by reviewing our recent accomplishments.

Following my remarks, Gillard will provide a detailed review of our quarterly and year-to-date financial results, and then we will open the line for your questions.

We are pleased to report another strong quarter and a solid year-to-date performance. For the 1st 9 months of 2025, total revenues were $443.6 million, representing a 24% increase compared to the same period last year. Our total revenues for the third quarter were $17.9 million which reflects a decrease of 1% compared to the same period of 2024.

We recognize revenues from sales of our products to KE, Pfizer and fuelros in Brazil, and their purchases vary from quarter to quarter as they control their own inventories. Overall, these revenues reflect the continued commercial success of our enzyme replacement therapies and provide a strong foundation to support our research and development efforts.

On the regulatory front, as we have announced previously, PI, with our cooperation, has formally requested a re-examination of the negative opinion issued in October by the Committee of Medicinal Products for Human Use CHMP regarding the proposed every 4 weeks dose regimen for Fabio in Europe.

There should be no misunderstanding. This process has nothing to do with the currently approved every 2 weeks regimen, and the May 2023 approval of the every 2 weeks regimen in the EU is unaffected, and El Fabio remains available to patients in the EU. We remain confident in El Fabio's long-term potential, and we are working closely with KSI to provide additional data in context to support the re-examination of the once in 4 weeks regimen.

We believe could offer meaningful benefits to patients and caregivers.

Turning to our pipeline, we are particularly excited about PRX 115, our combinant pegylatedurICal candidate under development for the potential treatment of uncontrolled gout. Preparations for the phase 2 clinical trial are well underway.

We filed our ID for the phase 2 clinical trial of PRX 115 in October of this year, and the IND has become effective following the FDA standard 30 day review period. We continue our plans to initiate the trial later this year.

Based on the encouraging first in human data from a phase 1 clinical trial of PRX 115, we believe it has the potential to be best in class therapy, with a long acting profile that could improve patient compliance and outcomes. If successful, this program represents a significant opportunity in the market with a high unmet needs.

We look forward to updating you about the trial as data becomes available.

Finally, I would emphasize that our operating strategy remains focused on three pillars driving commercial success with Efabuo, advancing PRX 115 and other early stage pipeline programs, and maintaining financial discipline.

With a strong cash position and positive quarterly.

Net income, we are well positioned to execute on these three priorities.

Before we turn to the financial results, I want to introduce Gilad Mamluk to the call to this call. Gilad began serving as Protalix's Chief Financial Officer in August of this year, and this is his first earnings call for the company. I'm sure that I speak for everyone on this call, and I wish him much success in the new position. Welcome, Gilad, and I'll now turn the call over to you to present a detailed review of our financial results. Gilad, please.

Thank you to all and good morning everyone.

Total revenues from selling goods for the nine months ended September 30, 2025 were $43.1 million, an increase of $8.3 million, or 24%, compared to $34.8 million for the same period in 2024. These revenues consist of $18.6 million in sales of Fabio to Kerzi, $15.4 million in sales of Ai to Pfizer, and $9.1 million in sales of Elizo to Fiocruz in Brazil.

Total revenues from selling goods for the three months ending September 30, 2025 were $17.7 million, a decrease of $0.1 million or 1% compared to $17.8 million for the same period in 2024.

Its revenues consist of $8.8 million in sales of Ko Fabio, $2.8 million in sales of fertilizer to Pfizer, and $6.1 million from the sales of fertilizer to Fiocruz in Brazil.

As was mentioned, we recognize revenues from sales of our products to our partners Ky, Pfizer and Fiocruz in Brazil, and their individual purchases change from quarter to quarter as each of our partners controls its own inventories. As a result, the orders we receive from our partners may not be timed in relation to the pace of patient acquisition and retention, and accordingly, our product sales to our partner may not reflect patient demand for the product.

We recorded revenues from licensed and R&D services of $0.55 million for the nine months ended September 30, 2025, an increase of $0.1 million compared to $0.4 million for the same period in 2024.

For the three months ending September 30, 2025, we recorded revenues from licensed and R&D services of $0.2 million, an increase of $0.1 million compared to $0.1 million for the same period in 2024.

Revenues from licensed and R&D services are comprised mainly of revenues we recognize in connection with our license and supply agreement with KG.

Other than potential regulatory milestone payments that may become payable, we expect to generate minimal revenues from licensed services now that we have completed the clinical development of Bio.

The cost of goods sold for the nine months ending September 30, 2025 was $22.4 million, up $2 million or 10% from $20.4 million for the same period last year, reflecting increased sales to Kerzi and Pfizer for the nine-month period, partially offset by decrease in sales to Fiocruz.

For the three months ended September 30, 2025, the cost of goods sold was $8.3 million, a decrease of $0.1 million or 1%, from $8.4 million for the same period in 2024.

The decrease was mainly the result of the decrease in sales to Kerzi and Pfizer for the quarter, partially offset by the increase in sales to Fiocruz.

Research and development expenses for the nine months ended September 30, 2025 totaled $13.9 million, an increase of $5.1 million or 58% compared to $8.8 million for the prior year period.

For the three months ended September 30, 2025, total research and development expenses were approximately $4.5 million, an increase of $1.5 million or 50%, compared to $3 million for the same period of 2024.

The increase for both the 3- and 9-month periods was mainly due to preparations for a planned Phase 2 clinical trial of PRX-115, which we view as a strategic investment in our pipeline and long-term growth.

Selling, general and administrative expenses for the nine months ended September 30, 2025 were $8.2 million, down $1 million or 11% from $9.2 million for the same period last year.

The decrease resulted mainly from lower salary and selling expenses.

For the three months ended September 30, 2025, selling, general and administrative expenses were $2.9 million, an increase of $0.3 million or 12% compared to $2.6 million for the same period in 2024.

The increase resulted mainly from an increase of $0.1 million in salary and related expenses, and an increase of $0.2 million in selling expenses.

Financial income, net was $0.01 million for the nine months ended September 30, 2025 compared to financial income, net of $0.1 million for the same period in 2024.

The decrease resulted mainly from exchange rate costs and lower interest income on bank deposits, which was partially offset by lower note interest expenses due to the September 2024 repayment in full of all the outstanding principal and interest payable under our then outstanding convertible promissory note or the 2024 notes.

For the three months ended September 30, 2025, financial income, net was $0.1 million compared to financial expenses, net of $0.1 million for the same period in 2024.

The difference resulted mainly from lower notes interest expenses due to the September 2024 repayment in full of all the outstanding principal and interest payable under the 2024 notes.

We recorded tax expenses of approximately $0.3 million for the nine months ended September 30, 2025 compared to tax expenses of approximately $0.4 million for the same period in 2024.

For the three months ended September 30, 2025, we recorded a tax benefit of approximately $0.1 million compared to tax expenses of approximately $0.6 million for the same period in 2024.

Our tax expenses and benefits result mainly from taxes on GILTI income under the US Tax Cuts and Jobs Act of 2017, the US One Big Beautiful Bill Act, which was signed into law in July 2025 and includes a restoration of the current deductibility for domestic R&D expenditure beginning in 2025 with transition options for previously capitalized amounts.

We recorded a net loss of $1.1 million for the nine-month period ended September 30, 2025 or $0.01 per share, basic and diluted, compared to a net loss of $3.6 million or $0.05 per share for the same period in 2024.

For the three months ended September 30, 2025, net income was approximately $2.4 million, or $0.03 per share, basic and diluted, compared to net income of $3.2 million or $0.04 per share and $0.03 per share diluted for the same period in 2024.

At September 30, 2025 we had $29.4 million in cash and cash equivalents and short-term bank deposits which we believe are sufficient to satisfy our capital needs for at least 12 months from the date we issue our quarterly report for the quarter ended September 30, 2025.

Overall, this result reflects strong execution and financial discipline as we continue to invest in our pipeline while maintaining a solid balance sheet.

Back to you.

To conclude, we are proud of our progress over the course of 2025 so far. We delivered strong year-to-date financial performance. We advanced PRX 115 towards a phase 2 initiation.

And continue to strengthen our commercial foundation with Elb. We believe these achievements position for targets for the long-term growth and value creation.

We appreciate your continued support and look forward to updating you on our progress in the coming months. Operator, please open the line for questions.

(Operator instruction)

Ram Salvajo with HD Wainwright.

Thanks so much for taking my questions and congratulations on all the recent progress. I first of all wanted to ask if you could provide us with any granularity regarding the timeline for the anticipated re-examination of the CHMP opinion on the every 4 week dosing regimen of El Fario. Secondly, I wanted to see if you had any additional comments on the evolving competitive landscape and treatment refractory gout and what implications this may have for the ultimate size of the commercial opportunity for PRX 115. And then lastly with respect to ongoing financial reporting, I was just wondering if you anticipate further predictability of the royalty-based revenue recognition related to El Fario sales going forward or if you anticipate any additional sources of volatility that may impact how you recognize revenue stemming from sales of El Fario.

Thank you.

So thank you, Ram. So I will answer you one by one if it's okay. On the 1 in 4 weeks reexamination request, we expect to have an answer on Q1 of 2026, and of course we'll update accordingly. This is one.

With regard to the gout, indeed there are multiple developments, mainly EUR1 mechanism of action based, if I may say. When we look at the gold market, we see, or we foresee a significant increase in the overall gold market in the next 5 to 6 years.

And we think that within the uricosis or the uncontrolled gout patients that required uricosis, it will grow as well. And if indeed our phase 2 will be successful, so potentially we have a product that can take very nice market share from this, I would say increased pool.

On the third one, we continue. Gillard will add if there are any, will tap, of course, we continue to recognize what we sell to Ky's inventory, and I'm not aware of any major change. KD does well on the market. We are optimistic when we look into the future, and this is it.

I would just add to that round that we have good credibility in terms of our revenues and. We do hope to, give some more visibility also in our annual report, but as we are limited in what we can say, given our agreement with Casey and Casey is a privately held company.

Thank you very much for all of those responses. I just had one other quick one maybe for Gilad, regarding the cash runway guidance. I just wanted to clarify whether this is based solely on the expenditures, the operating expenditures that you expect, or if this is factoring in the continued receipt of royalty-based revenue on El Fario.

It's based on both, and as I said, we have good predictability regarding the world stream.

And this includes, of course, the expenses associated with the phase 2 trial on PRX 115, right? Yeah.

Definitely.

Okay, thank you.

Thank you, ma'am.

John Van der Muysen with Zaxx.

Thank you and hi door and welcome to the call Gilad.

Regarding the CHMP decision on the every 4 week dosing, does it make sense to run a new trial to get the information that the EMA might be looking for to get that different dosing regimen?

Assuming that it, assuming that that they they don't find a favorable decision.

Okay, right now, Kerry submitted a request for reexamination. They will put their arguments together and In the coming months, and then there will be discussions and within the CHMP and a verdict will be given, of course, as I mentioned in Q1 of 2026.

If it's positive, great. If it's not positive, Jery will discuss internally and he will take a decision.

Okay, and it sounds like you're still on track for a, start of the trial for PRX 115 before the end of the year. What does the timeline look like for that, if you, if you get started in the next few weeks in terms of top-line readout and, enrollment and everything?

We, yes, indeed, we plan to start screening patients in a few weeks. In Q3 of 2027, we expect top results.

Okay, and, you've identified there's, you want to have several different assets in your development pipeline, and I know you have 3 right now listed, and I'm, I was just wondering what's emerging as a follow on to PRX 115 as another candidate.

So we hope to update the market soon, PRX 119. I hope that we will be, if indeed we'll pass all the models and the tests that we are going through or the final test, we will update about the mechanism of action and the specific indication.

Okay, and then a last one for me, I know you've been getting a few additional approvals in different geography, geographies for, or Kya he has, new approvals. Has anything emerged recently since the last update in terms of that?

I'm not aware of anything significant or something I'm aware of.

Okay, thank you. There is a long list. There is a long list of markets cases under submission or planning to submit, for the next few years to come, so we are not concerned on this front. This is part of the further expansion of Al Fabio globally.

Sounds good and I guess you'll you'll disclose that, as it, as it happens. I know it's in the past you've disclosed them in the queue.

Yes, we will disclose it accordingly and properly.

Great thank you.

Oel Minke. Please proceed with your question.

Hi. I'm just an individual investor, but I have a couple of questions for you. Number one is there seems to be a pattern of basically receivables going up at the end of the year and then being cleaned up at the, at Q1. Now, so far, $9.9 million has been basically paid off from, the Q3, the end of Q3 receivables.

And basically from what I've seen, it looks like the Brazil and the Pfizer amounts that have been sold this year are basically.

Probably 5%, 4 or 5% above the whole of last year and assuming that they have about 10% growth, that means that they haven't got much.

Well, a lot of orders to get this year.

Now, based on these assumptions.

I mean is there any kind of Indication of like what kind of numbers you could be doing with. I mean, what is your capacity based on what is being paid every time that you basically sell a product to.

Is there any kind of a ballpark number or something like that?

That would be question number 1.

Question number 2 is, do you guys have any kind of anticipated, Rar&D growth during the phase two of the 115 because you guys are looking at a fully sizable phase two.

Which is actually pretty nice because you can prove your your candidate pretty nicely with that, but that's costing a lot of money.

So I mean I have a lot of other questions but I'm going to stop it there so that you guys can have some some time to actually take it, think it over and and then so thank you.

So.

Sure. So regarding the first question of field and we are not providing guidelines as noted and also in terms of our revenue, something we mentioned is that, we are buying the inventory. So if you look at the revenues, there is no direct link, of course there is a link, but there is no direct link between the revenues and the revenues of Kerry, for example, because if Kerry is buying the inventory in the last quarter of 2024 just for the example, then they may buy less in the first quarter and vice versa.

So it's it's a bit, it's a bit, it may be a bit misleading to TRY to. To TRY to relate that directly, I can tell you that they keep going that without providing any guidelines and the numbers which we cannot give. I can say that they are going nicely the way we see that in terms of the R&D vote, yes, definitely we take, this expense into account, the PRX 115, and as we said, we have enough cash for more than 12 months to fund this trial.

John Van der Moysen with Zach.

Great, thanks for letting me, ask another one.

The last question maybe, wonder what, your guide or what your thoughts are in terms of cash burn for 2026 and how that might, split between R&D and SG&A.

So as I said, we are not, we cannot provide guidance at that stage.

Okay, even for your Cost?

Correct, but what we did say is that, and I also, replied to the previous question, we said that we have enough cash for more than 12 months, and we, of course, we have in mind that we are funding the PRX 115 phase two trial.

Okay, all right, thank you.

We have now reached the end of our question-and-answer session. I would now like to turn the floor back over to the door for closing comments.

So thank you everybody for the time and we will keep updating you and we will connect next quarter, please.

Thank you.

This concludes today's teleconference. You may disconnect your lines at this time.

Thank you for your participation.