March 29, 2024

Earn Money

Business Life

Edited Transcript of PLX earnings conference call or presentation 12-Mar-20 12:30pm GMT

KARMIEL Apr 13, 2020 (Thomson StreetEvents) — Edited Transcript of Protalix Biotherapeutics Inc earnings conference call or presentation Thursday, March 12, 2020 at 12:30:00pm GMT

Protalix BioTherapeutics, Inc. – President, CEO & Director

Protalix BioTherapeutics, Inc. – SVP, CFO & Corporate Secretary

H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate

Jefferies LLC, Research Division – Senior Equity Analyst & European Pharmaceuticals Analyst

Greetings, and welcome to the Protalix Biopharmaceuticals Reports Fourth Quarter and Full Year 2019 Financial and Business Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Monique Kosse, Investor Relations at LifeSci Advisors. Thank you. You may begin.

Thank you, operator, and welcome, everyone. Thank you for joining us today for a discussion of Protalix’ Fourth Quarter and Full Year 2019 Financial Results. Leading the call today will be Dror Bashan, President and Chief Executive Officer of Protalix. He will be joined by Eyal Rubin, Chief Financial Officer of Protalix.

Before we begin, I would like to remind everyone that various statements made during this call will include forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those regarding the company’s future plans, prospects and strategy, financial goals and guidance, product attributes and pipeline, drivers of growth, expectations regarding reimbursement and other statements that are not historical facts. Management’s assumptions, expectations and opinions reflected in these forward-looking statements are subject to risks and uncertainties that may cause the actual results and/or performance to differ materially from any future results, performance or achievements discussed in or implied by such forward-looking statements, and the company can give no assurance they will prove to be correct and will not provide any further guidance or updates on the company’s performance during the quarter unless they do so in a public forum.

Please refer to the company’s March 12, 2020, press release and the risk factors included in the company’s filings with the SEC for a discussion of important factors that may cause actual events or results to differ materially from those contained in our forward-looking statements.

Prior to this call, the company issued a press release announcing its financial results for the fourth quarter and full year 2019 results. A copy of the release can be found on the Investor Relations page of the company’s website.

With that, I will now turn the call over to Dror Bashan, President and CEO of Protalix. Dror?

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [3]

Thank you. So good morning, and thank you for joining us today to review the company’s fourth quarter and year-end 2019 operations and recent highlights. During this call, I will provide an update on the clinical and corporate progress. And then I will ask our CFO, Eyal Rubin, to review the company’s financials before opening the lines for questions.

So 2019 has been a pivotal year for Protalix as we successfully expanded on the company’s strong foundation, grew our team and entered into a new phase of development as a world-class recombinant therapeutic company. We’re excited to continue our forward momentum through to 2020 toward commercialization of our Fabry program. And we believe Protalix is positioned for both near- and longer-term success.

We are extremely enthusiastic about the lead program, PRX-102, with 3 fully enrolled Phase III clinical trials ongoing. We believe we have a robust clinical program in the industry and — for the treatment of Fabry. And very significantly, we anticipate to file a BLA submission to the U.S. FDA for the coming quarter. Furthermore, we anticipate final results of our BRIDGE and BRIGHT trials in the first and second halves of 2020, respectively, which will further support our portfolio and evidence around PRX-102. Protalix is putting pressures and firing in all cylinders right now, and the energy among the entire staff reached new heights for 2019.

2020 is shaping up to be a banner year for the company. We look forward to advancing our clinical pipeline, expanding our sales in Brazil for the Elelyso treatment for the Gaucher disease and leveraging commercial opportunities to expand our global footprint in the treatment of Fabry disease.

I would like to review some of our major accomplishments over the last year, beginning, of course, with this morning announced financing. Today announcement of $43.7 million PIPE from some of the leading investors in Israel and the U.S. underlines Protalix’ commitment to bringing important treatment to the Fabry patient community. Our ability to secure this transaction under some of the most challenging market condition in over a decade is a strong indication for the deep interest in our technology and platform and serves as validation that our years of work with the Fabry community remains significant, continued importance to these patients. The additional capital will help us to progress our multiple ongoing clinical trials towards completion as well as to further develop our early-stage pipeline and serves to further reinforce our strong foundation as we look to another truly transformational year for Protalix.

As we announced earlier this quarter with our commercialization partner, Chiesi, we received an agreement letter from the FDA for Initial Pediatric Study Plan for PRX-102 for the treatment of Fabry disease, which outlined an approach for PRX-102 to address the needs of pediatric Fabry patients. We plan to submit the BLA for PRX-102 via the FDA Accelerated Approval pathway next month based on data from the completed Phase I/II clinical trials of PRX-102 and ongoing Phase III BRIDGE clinical trial.

Earlier this year, we announced positive 12-month interim on-treatment data in the BRIDGE study. This demonstrates an important improvement for kidney — in kidney function in patients when switched from Replagal into PRX-102. This data helped to support our expected BLA filing under Accelerated Approval.

We have completed enrollment in the BALANCE study, our head-to-head Phase III trials of PRX-102 for the treatment of Fabry disease. This evaluates the safety and efficacy of PRX-102 compared to Fabrazyme on renal function in Fabry patients. To date, more than 66 patients are being treated in our extension studies after opting to continue treatment with our product PRO-1 — PRX-102.

We have also completed enrollment in our Phase III BRIGHT trial of PRX-102. This is an open-label switchover study to assess Fabry patients previously treated with either Fabrazyme or Replagal. And preliminary data showed PRX-102 administered over every 4 weeks resulted continuous active enzyme throughout the entire infusion interval. This could be a significant benefit to patients as infusions every 2 weeks in the current standard — is the current standard of care. To date, substantially all patients that were enrolled in this study remain on the 4-weeks dosing regimen, and we are continuing treatment under the 4-weeks dosing regimen in long-term extension study.

Finally, in 2019, we were able to grow our team and Board significantly. My own appointment to President and CEO and Director in May was followed by the appointment of Mr. Eyal Rubin as Senior Vice President and CFO in July 2019. And shortly thereafter, our Board of Director unanimously elected Zeev Bronfeld as Chairman of the Board. And only recently in December 2019, Protalix added the accomplished Pol Boudes and Gwen Melincoff to our Board. I’m very proud of our entire team’s commitment to the potential of Protalix. Despite years of current enzyme replacement treatments, there still remains an unmet medical need in the Fabry patients who continue to show progression (sic) [progressive] loss of kidney function. An accelerated approval of PRX-102 would bring hope to these patients much quicker, and that is the goal we all work towards every day.

I will now turn the call to Eyal to review the financials.

——————————————————————————–

Eyal Rubin, Protalix BioTherapeutics, Inc. – SVP, CFO & Corporate Secretary [4]

——————————————————————————–

So thank you, Dror, and thank you, everyone, for joining today’s call.

I would like to begin the financial update by congratulating the team on the completion of the recent financing. As announced in our press release this morning, Protalix successfully secured funding agreement to raise $43.7 million through a PIPE financing by a number of household-name, leading Israeli and U.S.-based investors, including Psagot Investment House, More Investment House, Highbridge Capital, UBS O’Connor, Rosalind Capital and Alrov Properties and among others. Rosario Capital and Houlihan Lokey served as financial advisers on this PIPE transaction.

Net proceeds from the financing will be used to advance our clinical programs and the commercialization of PRX-102 for the treatment of Fabry disease as well as to further develop our early-stage pipeline therapeutics and for general corporate purposes. Protalix will issue and sell via purchase an aggregate of 17.6 unregistered shares of our common stock at a price of $2.485 per share. We generated gross proceeds equal to approximately $43.7 million in this private placement. Each share issued was accomplished with a warrant to purchase 1 share of our common stock or the warrant shares at an exercise price equal to $2.36. The financing is further described in the Form 8-K, which was filed earlier today and in the securities purchase agreement attached to the Form 8-K.

Before getting into the 2019 numbers, I’ll also mention that in December 2019, we announced that Protalix held a special meeting of stockholders to propose the following 2 critical financial amendments, which stockholders ultimately approved: a reverse stock split, 1 for 10; and a reduction in the total number of shares of the company’s common stock that Protalix is authorized to issue from 350 million to 120 million shares. We thank our stockholders for this important vote and for the continued support of Protalix despite the challenging times in the markets.

For the year ending December 31, 2019, Protalix recorded revenue from selling of goods of $15.9 million, an increase of $6.9 million or 77% compared to revenue of $9 million for the same period in 2018. The increase is primarily due to the higher sales of Elelyso in Brazil as well as the increase in sales of drug substance to Pfizer.

R&D expenses net were $44.6 million, an increase of $11.3 million or 34% compared to $33.3 million for the same period of 2018. The increase results primarily from an increase of $9.1 million in the clinical trial-related costs as well as a decrease of $2.1 million in grants received from the Israeli Innovation Authority.

SG&A expenses were $9.9 million, a decrease of $1 million or 9% compared to $10.9 million for the same period in 2018. The decrease resulted primarily from costs related to the company’s U.S. exclusive license and supply agreement that the company entered into in 2019 with Chiesi, our partner, which were not incurred in 2019.

Net loss for the year was $18.3 million or $1.23 per share, basic and diluted, compared to a net loss of $26.5 million or $1.8 per share, basic and diluted, for the same period in 2018.

At December 31, the company had $17.8 million in cash and cash equivalents.

I will now turn the call back to Dror.

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [5]

——————————————————————————–

Thanks, Eyal. So we continue to progress as a worldwide — as a world-class company, and 2019 was transformational from Protalix. And I have to take this moment and thank the many Fabry patients and investigators and other stakeholders in our 3 pivotal trials around the world, our tremendous scientific and technical staff for their dedication and efforts and our shareholders for their patience and support. Thank you again.

With that, I will now turn the call back to the operator, and we will open the call for questions from the audience.

================================================================================

Questions and Answers

——————————————————————————–

Operator [1]

——————————————————————————–

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

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [2]

——————————————————————————–

This is Boobalan dialing in for Ram Selvaraju. So I wanted to start off a little bit to get to know more about the Chiesi experience. Is Chiesi facing any business operation disruption due to the coronavirus in Italy?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [3]

——————————————————————————–

So first, thank you for the question. I think I will take the opportunity and wish everybody, not only who is listening to us but everyone, the best health possible, of course, and for them and for their family. This is very important.

The coronavirus is worldwide, and there is a pretty significant hit in Italy. As for Protalix, we don’t see any risk because it is in Italy. Protalix manufactures the product. Protalix runs the clinical trials. So actually, I think many of the employees of Chiesi, which, of course, exists and working and is a very successful company, in Italy, I think many of them work from home. So there is no harm, and there are ongoing discussions. So it’s true that they are not coming to — let’s say, to Tel Aviv to meet with us, but we are conducting on a daily basis discussions over video conferences or TCs, et cetera. So we don’t see any, let’s say, effect on the ongoing activities of Protalix ahead of submissions or clinical trials. Moreover, we are looking, of course, to make sure, and we have stocks, of course, in the different sites globally where the 3 clinical trials are ongoing to have enough material for the patients, of course, to make sure, and we do anything with any effort, of course, to make sure it will continue as planned.

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [4]

——————————————————————————–

Okay. So moving on, has the FDA indicated to you that it will only accept the BLA for review once the BRIDGE top line data becomes available in mid-2020?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [5]

——————————————————————————–

We expect to — if I heard you well, we expect to have the outcomes of the top lines of the BRIDGE 20 patients after 12 months by April of 2020, which is a month from today.

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [6]

——————————————————————————–

Okay. And with respect to the potential launch of PRX-102 in the United States, I’m curious like, what is Chiesi’s strategy to take the market share from competitors such as Fabrazyme? And do you have any details on pricing?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [7]

——————————————————————————–

So as you probably know, the sales and marketing rights are with Chiesi. They are working in the last couple of quarters to establish and already made a vast effort and investment, of course, to establish a sales and marketing platform on the ground both in the U.S. and the EU. They also bought a couple of assets in the rare disease area. And I think it is under their hands.

And if — I don’t want to discuss, if I may say, pricing because I don’t have the data right now. This is it in a nutshell. We believe that the outcomes of the BRIDGE, the BRIGHT, the mechanism of action are such that if indeed we get approval by the end of this year as planned and we get on the market next year, we will be able to start to take market share from either new diagnosed patients or from the current commercial products. To tell you exactly how much market share and how exactly it will be done, I’m — not right now hold the information, if I may say. But I can assure you that the team that’s on the ground both in the U.S. and in EU is experienced. It comes from the — let’s say, the usual suspects, if I may say. And there are many, many hundreds of years of experience combined, of course, in each of the continents to establish a very good sales and marketing team.

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [8]

——————————————————————————–

Understood. And what are your current expectations for Elelyso revenue from Brazil?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [9]

——————————————————————————–

Can you repeat the question? I don’t — I could not hear you. I don’t hear you well, I’m sorry.

——————————————————————————–

Eyal Rubin, Protalix BioTherapeutics, Inc. – SVP, CFO & Corporate Secretary [10]

——————————————————————————–

Expectations in Elelyso…

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [11]

——————————————————————————–

What are the current expectations for Elelyso revenue from Brazil?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [12]

——————————————————————————–

So in 2019, we reported about $9.1 million of sales. We expect a growth of about 10% to 15% year-over-year for the next couple of years. I don’t know what will happen in 5 years, of course. It will be, I think, less responsible to say. This is by patients. We see, as I mentioned, I think, in the previous calls, high alignment between the number of device and the orders and the number of the patients. We already have something like close — something like around 25% of the treated patients in Brazil or treated Gaucher patients in Brazil. We expect it to grow again, about 10%, 15% year-over-year in the next couple of years.

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [13]

——————————————————————————–

Understood. And any update on the business development activities with respect to OPRX-106 and PRX-110?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [14]

——————————————————————————–

At present, I don’t have news on that. We are — as I mentioned, we have engaged and we actually finalize the project these days. We have engaged with a scientific advisory firm a couple of months ago. They have reviewed our capabilities, technology, pipeline, structure, et cetera. We are reviewing it with our management and Board in order to, if I may say, refine the strategy or a way going forward for the next, say, few years, and we will come out opening to the market soon about it.

As part of it, we’ll be — of course, this is what we do with 110 or 106 or each of the molecules that we have in our pipeline.

——————————————————————————–

Boobalan Pachaiyappan, H.C. Wainwright & Co, LLC, Research Division – Equity Research Associate [15]

——————————————————————————–

Okay. And one final question if I may. Has the company made any progress in potentially monetizing the protein manufacturing technology platform?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [16]

——————————————————————————–

We — I mean all I can say, that we are working on potential collaborations right now based on our platform. This — actually expressing protein through plant cells.

——————————————————————————–

Operator [17]

——————————————————————————–

Our next question comes from the line of Peter Welford with Jefferies.

——————————————————————————–

Peter James Welford, Jefferies LLC, Research Division – Senior Equity Analyst & European Pharmaceuticals Analyst [18]

——————————————————————————–

I’ve got 3, please. Firstly, just with regard to — sorry to come back to this, but the COVID-19 situation. I appreciate that obviously, your manufacturing in Israel is presumably unaffected by this. But just from the point of view of the clinical trials, I guess could you give us some sort of visibility in terms of the patient follow-ups? Because obviously, all your patients are enrolled now, which is a good thing in the sense that you’re not trying to get new patients. But equally, I guess now therefore, you’ve got all those patients in the study, it’s important that you’re still able to follow those patients up. And you don’t have the flexibility at this point now to change sites or reallocate clinicians. So I wondered if you could give us some sort of an update as far as procedures you’ve got in place or plans to be able to ensure follow-ups can be completed so that the trials can be completed successfully.

Secondly then just on the financials, obviously, very good there in doing the capital raise. Can you give us some sort of outlook maybe for cash burn this year, and apologies if you’ve said this at the start of the call, or some sort of guide as to how we should be thinking about the run rate of OpEx during the course of this year?

And then just finally then on — with regards to the Chiesi. Could you just outline for us as when the first milestone — or remind us rather when the first milestone will come from Chiesi? And what triggers that milestone?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [19]

——————————————————————————–

So thank you. I will address the first one. The first question itself that we are working closely with IQVIA, which actually our vendor, to run the clinical trials in order to see that we are prepared adequately, of course, to the extent possible to maintain the clinical trials and continue them. It could be either by home visits or supporting with the patient to come to the hospitals once in 2 weeks for their infusion. We hold all kinds of preparation discussions. We make sure that we have enough, of course, material, either our drug or Fabrazyme, on site.

So as far as we know, as of today, it looks that things are going well, I assume this is, if I may say, a general point for all clinical trials or probably the hundreds, if not thousands of clinical trials globally. We do take, if I may say, extreme measurements to ensure to the best that we can that this clinical trial, inclusive of the extensions, will be continued as planned. This is one.

So I will take the second question. If you don’t mind, Eyal, will answer you. So maybe, Eyal, you will take the third one?

——————————————————————————–

Eyal Rubin, Protalix BioTherapeutics, Inc. – SVP, CFO & Corporate Secretary [20]

——————————————————————————–

Of course. So thank you, Peter, for joining this call. With regard to the burn rates, as in previous year, we anticipate that at least the first half, unless something unexpected will happen, and in this crazy market, you can never anticipate or project, but we will keep the $7.5 million net burn rate, for the first half of the year. Obviously, as we go deeper and deeper into the trials and extensions, since they are fully funded by Chiesi, so our burn rate is going to decrease. So we should expect a decrease in the second half of this year.

With the financing and the expected cash flow projections, we believe that the secured financing will keep us in the year — for the next 2 years based on our internal plan and budget.

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [21]

——————————————————————————–

But Peter, I would like to add that I think by securing this, say, close to $44 million with the cash we have in hand as we reported, to the extent that I can foresee, of course, we are — we have enough cash or secured enough cash to continue and work, if I may say, in peace, if I may say, until at least the minimum without doing anything else, the end and the final results of the BALANCE study, which is actually supposed to be by Q1, I believe, 2022. I assume that you do not expect me just to sit on my hands. So I hope there will be more to do. I hope we will be able to cut and collaborate with third parties on our technology and do other things, but this to be followed, of course.

——————————————————————————–

Peter James Welford, Jefferies LLC, Research Division – Senior Equity Analyst & European Pharmaceuticals Analyst [22]

——————————————————————————–

And sorry, just to be clear, I guess, which is my third question. The sufficient funds for 2 years, that presumably excludes a milestone from Chiesi, which I think we should get on U.S. approval assuming that happens around the end of this year or early next year?

——————————————————————————–

Eyal Rubin, Protalix BioTherapeutics, Inc. – SVP, CFO & Corporate Secretary [23]

——————————————————————————–

Yes. So with regards to your third question about the milestones, so the FDA approval obviously triggers the milestone. The interim analysis also triggers one. Obviously, we cannot disclose the figures, but as you rightfully so said, this is going to be a triggering event for getting those milestones from Chiesi.

——————————————————————————–

Peter James Welford, Jefferies LLC, Research Division – Senior Equity Analyst & European Pharmaceuticals Analyst [24]

——————————————————————————–

Understood.

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [25]

——————————————————————————–

But Peter, just to emphasize, maybe I did not understood fully your question. Even with — just by the money that we have raised and we have in cash, without this additional milestone, not that we are not expecting them, don’t get me wrong, of course, we are secured until the end of our Fabry program. And I think it’s an achievement by its own.

——————————————————————————–

Peter James Welford, Jefferies LLC, Research Division – Senior Equity Analyst & European Pharmaceuticals Analyst [26]

——————————————————————————–

Yes. That’s also understood. I just wanted to make clear that, that was what you were inferring, that yes, the cash is sufficient beyond the first quarter ’22 BALANCE excluding any milestones. So the milestones then should extend that runway beyond that?

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [27]

——————————————————————————–

Yes, sir.

——————————————————————————–

Operator [28]

——————————————————————————–

It appears we have no additional questions at this time. So I’d like to pass the floor back over to management for any additional concluding comments.

——————————————————————————–

Dror Bashan, Protalix BioTherapeutics, Inc. – President, CEO & Director [29]

——————————————————————————–

Okay. So again, thank you very much for everybody, and I wish everybody the best health and meeting you again next quarter.

——————————————————————————–

Operator [30]

——————————————————————————–

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. Again, we thank you for your participation, and you may disconnect your lines at this time.

Source Article