Q2 2020 Protalix Biotherapeutics Inc Earnings Call

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Good morning, ladies and gentlemen, and welcome to the politics bio Therapeutics second quarter earnings call.

As a reminder, this conference is being recorded.

I would now like to turn the conference over to you our host Mr. Chuck the dollar.

Outside advisors Investor Relations Mr. dollar you may begin the.

Yes. Thank you very welcomed Telux fightsticks predicts its second quarter 2020 financial results and business update conference call.

With me today, our driver, Sean President and CEO, Alex and I always have been Chief financial Officer.

The press release announcing results any update was issued this morning, and it's available now Metallic's website.

Please take a moment is read the disclaimer about forward looking statements in the press release.

The earnings release, and this teleconference. A quick forward looking statements.

These forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results could differ materially from state.

Factors that could cause actual results to differ or described in the disclaimer.

Filings with the U.S. Securities Exchange Commission.

I'll now turn the call over to Mr. barbershop CEO.

Thank you Chuck and welcome everyone.

Thank you for joining us today for the company's second quarter Twentytwenty financial results in business update.

Today. These coding during at least one I will provide an overview the progress if all clinical programs and keep hoping to settlements. Following my remarks, I'll Chief Financial Officer, Yeah. When you review the Companys financial results.

[noise] before we open the line for questions I'm pleased to report that there are several months it'd be very productive.

No I suppose it seems topline data from a phase three breach study and importantly, a beautiful trx one or do you have submitted to the U.S. DHL may 20 Sevens.

In Twentytwenty of schools until the if the 80 subsidiaries as opposed to possibly.

We accomplish these important milestones one facing the challenges caused by the call, we'd 19 pandemic and I'm very much appreciate if im proud for their dedication of our entire company. Each shown during these I'm interested in times to accomplish this entire.

Doug and good companies DC.

Got.

It is everything is.

Oh, well meet wins to advancing over say the development programs achieving superior solutions for the treatment.

Deserve genetic disorders, such as fabry disease.

No. Please let me review the recent highlights in the league in more detail [noise].

On may.

28.

2020, we have announced a very significant Muslims whole company. The submission of a beautiful theory, it's wonderful to for the treatment of adult patients with fabry disease to the U.S.M.D.A.

Under the if the age said, we did that brought possibly.

The delay was submitted under 58 considered approval pathway in collaboration with all depend on when the commercialization Paul the kidney globally disease.

We all know awaiting a response from the F.D.A. regarding to produce a date, which we expect basins if the guidance to a cool any day.

Also we seem to find an indication from the 50 860 days fighting suffocation and in the meantime, we are working we scares me on the commercial launch preparation, we hope to have more to say about that into coming months [noise].

Yeah. They submission includes a comprehensive set of strictly Nicole clinically manufacturing data compiled for all completed phase one two clinical trials trx, one or two including the related extension study six succeeding the phase one two clinical trials trx, one or two the injuring clinical data from our phase three breached study which is.

The switch over study as well its safety data flow going clinical studies, a fabrics wanting to including extension studies.

As mentioned above the delay includes an interim data from our phase three breed screen becomes.

Hey tried felix wanting to for which we announced additional positive topline results. Following the completion of these studies. These 12 months open they must think it on switch over study evaluating the safety and efficacy opaque unique I'd see does alpha one milligram per kilogram infused every two weeks make each main objective.

For safety and efficacy.

And indicated substantial improvement [noise].

In renal dysfunction in both male and female patient switch from a gun to see does on fall marketed by Takeda known as reflected on Trx, one or two the study confirms our belief that you know rigs one or two could be an important part over the enzyme replacement therapy market than potentially offer a pay the patients the three patients a new treats.

Meant option for the Fabry disease.

We'll continue to take only justification spiritual team somebody disease into additional phase three studies the balance study, which is all confirmatory head to head double blind study, where its interim analyses resides which support our European filing at the first stage and we serve once completed two conversion expenses expected.

You know you from accelerated approval to traditional one.

The second ongoing studies, the bright study, which is an alternative dosing regimen study for which we expect to publish topline results. During the fourth quarter will this year again subject to go over 19, Pandemics illustration as it is going on worldwide.

These two clinical trials will complete the overall phase three development program for Fabry, which is a very very robust one.

No. Please let me turn Htwo pipeline by the end of July we announced a new nonbinding developing commercialization for emulation phobia likes 110, we sell come with USA.

Intending to these little piece for the treatment of pulmonary sell those these which is a rare disease close close by inflammation, usually occurring in the lungs and lymph nodes cellphone made was formed in 2017 to investigate for only one hour inflammation seen in patients with Spano Socal doses direct one open he's a very promising.

Sure.

[noise] as we continue to expand in advance of pipelines products I want to high that's an important New addition to the company's research and development team.

The beginning of July we've announced the appointment of yet. So you can be H.D. is a vice president research and development. Yeah, I did a great condition 12 team and brings valuable perspective, we saw her extensive experience in big Romney pharmaceutical R&D in both scientific operations administrative functions.

She will be video, but she will be if any but also to the company and will play a key role in all future success.

I also want to take the opportunity and think Oh founder.

Dr. So you'll see showed you the who retired there's all previous head of research and development. We think you'll see for scientific entered into up a national vision and his tireless efforts that led to use foundation founding and building photonics, we wish him a great success in the future no before turning over to a yard filling up their don't know.

Financials, I want to see things [noise].

Well employees for their tireless efforts, especially during the last six months of these cobiz 19 pandemic in restrictions well businesses are starting to open. The pandemic you speed impacting business is needs writing globally, well continue to operate and we have much to do fall within the next few months, we're very excited here, though province.

But even more excited by the nature in front of house with that I will now turn the call over to a yard to review all financials yuppies.

Thank you George and thank you everybody for joining today's call.

Briefly reviewing the financial support Siemens ended June Thirtyth 2020, we recorded revenue from selling of goods of 3.6 million compared to revenues of 3.4 million for the same period off 2019.

Revenue from license in R&D services for the three months ended June Thirtyth 2020 were 7.3 compared to revenue of 8.8 million for the same period off 2090.

Revenues from life is an IDR comprised primarily of revenues we recognized in connection with a license five years with kids.

The decrease is primarily due to the completion or two on the three phase three clinical trial.

Oh fewer rigs, one or two as well as low cost related to our faced rebalance clinical trials parents, one or two for the treatment of fabry disease.

Cost of goods sold for three months ended June Thirtyth 2020 were 1.8 million compared to 2.7.

The decrease is primarily due to a changing cost structure as well as were royalties paid to the Israeli innovation authority.

R&D expenses for the three months ended June Thirtyth were 9.2 million compared to 13.3 million for the same period of 2090.

The decrease as I previously mentioned was primarily due to the completion of two out of three phase three clinical trials reduce costs related to a pretty balanced clinical trial as well as a decrease in cost related to manufacturing or driving development and solve those manufacturing drugs yeah cost.

We recorded as inventory already.

We expect research and development expenses to continue to be up from our primary expense as we entered into a more advanced stage appears oh preclinical and clinical trials for certain of our crop for Kate candidates.

As Joe mentioned.

As you know <unk> expenses were 2.2 million for a few months ended June Thirtyth 2020, compared to 2.1 for the same period in 2090.

At June Thirtyth, 2020, or cash cash equivalents, a short term bank deposits were approximately 40 million compared to approximately 17.8.

On December of last year.

We'll now turn the call back to you George Thank you very [noise].

So we've had a very productive first half of 2020 and real excited about the rest of this year.

It is rewarding to see the progress we have made on the development of life saving drunk utilizing our especially technology products.

With that I would like to thank everybody and we'll open the lines for questions. Please.

Thank you well now be conducting a question answer session. If you like to ask a question. Please press star one on your telephone keypad a confirmation total indicate your line is in the question Q. You May proceed start to if he'd like to remove your question from the Q.

For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.

One moment, please probably call for questions.

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Sure it anyone wish to ask a question press star one on your telephone keypad that star one.

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Ladies and gentlemen, we have a question from.

Mr.

[laughter] hi.

Okay and H.C. Wainwright. Please go ahead.

Hi, This is borland dialing in for rounds of Roger can you hear me okay.

Yes, we hear you with.

Okay. Thank you so much for that.

By.

Thing your comment on other like Okay. It's so hard to 19.

That's helpful color like though during two care 21, pure tiny and then maybe if you can give me some quantitative metrics there will be helpful. On do you expect significant headwind for the reminder of the year on the if so what kind of sad to you you have in place.

The good because it 19 related impact on the other lagerfeld in Brazil.

So thank you for the cool and ER has to say that the yes. So far during the first half of 2020 and comparing the two quarters and yeah. We don't see yeah any impact of cooking 19 on our sales yeah based on the forecast and the shipment that they were already really.

<unk> Yeah, we believed that the a 2020 is gonna be in the same neighborhood as 2019. So all in all we can say a that the for now at least we don't see any impact yeah, we took a or various measures to make sure that we switch patients to homecare and.

Yeah, we're monitoring get yeah, obviously, the impact and the epidemic.

Yeah very closely so why at this point the yeah, there's nothing really to I report.

Okay, that's what I call it pretty helpful Hum.

Get rid of but so next year embryonic longer don't always approved by the <unk> might end up this year and how long the drug re launch in the you're afraid and then I wonder whether you have any thoughts related to pricing on rather the pricing would be no. Other discard the fabrazyme or would it be at a premium.

<unk>.

So thank you for that so with him.

You know once we received the PDUFA do we know when do they expected approval date and I assume the drugs will be launched a shortly after.

Its full pricing this is something which easily.

You know we scares the no commercial partner Paul notes at all global partner full says a marketing and this is not as to the best of my knowledge is not done yet.

No I'm sure we will update the Golden once we know something.

Okay, No that's very helpful. Yeah I'm done.

The sarcoma collaboration so what can you say beyond what started out in your opening remarks, and then for the non binding come should be converted into a binding contract well any financial data we disclose at a later day on the yeah I have forgotten.

Yes. So thank you for the question Yeah. We are working on obviously the a full license agreement. The once they are going to be ready as it probably get it company. We will obviously a issue a press release.

With regards to the financial terms of the deals I guess it the like most of those licensing deal. The financial terms are gonna be we de Ya reduction.

Or are there other than to say I guess it. They the parties will have to agree if and when a rule Dixon disclose those the financial aspects of the a the agreement.

Okay and roughly the same question does this Berkshire license cover on really called Bernard.

Workers or does it include other indications.

Yeah, it's only for pulmonary sarcoidosis and yes, they have options for this indication, but right. Now. These are the main development and these are the main unfold.

On how strongly capitalized and cycle Mad and what does it extend up the clinical development plan.

Michael Knott intends to pursue the Rx one ones at all.

Well you know something when there's a private company so.

You know we signed an agreement if indeed, if we license agreement we decided to me the.

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It's a diesel real time for license agreement there there is no pick up financing pick up on felt for me.

There.

<unk> to move on these a indicates unfold.

Okay.

Excuse me.

Sorry, sorry, [laughter] no again, just to emphasize and integrate their food license agreement wouldn't be fine.

Yeah, I mean with many other terms and conditions on both sides of course, but clearly after we were very fine there is enough.

Resources, if I may say.

To move DC Brooks food into.

And laser clinical stage schools.

Okay, and one final comment there's a lot from how should we think about modeling the R&D costs for the remainder of the year.

So again can you repeat the question I could hardly hear you Im sorry.

How should we think about modeling the R&D costs for the remainder of the either.

Yes. So thank you for the question they R&D costs. They are should the U.S. staying the same based as the first half yeah, but obviously a gradually it's going to yeah keep on decreasing yeah don't forget that as more and more patients are being switched from the main studies to the extension studies were fully funded Mckenzie Army.

I see the R&D expenses, the yeah, we record our lower a hopefully in so far we haven't seen any material impact of the copy 19, a ah. So hopefully that stays the same thing you will see a decrease in R&D expenses overtime A.M.T. older patients are gonna be switched to the Oh.

And then the only R&D expenses are going to be on our pipeline, obviously as drew mentioned.

Yeah, we are working to advance and your pipeline. So you might see an increase there and but again nothing to do you can compare to a full fledged <unk> phase three actually three clinical trial phase three that they we conducted in the last the a couple of years.

Okay, Alright, I guess, how much that's it from me.

Thank you. Thank you very much.

Ladies and gentlemen, there are no questions at this time I'd like to kind of core back over to Mr. Gore Lasan CEO for closing remarks.

[noise]. So thank you for that and they all I often say there. Thank you for the time. We are we were pleased to report always audits and we are optimistic domestic 12 very soon the PDUFA date from D.A. and to continue our progress over the clinical program and report accordingly, so thank you and be safe ever.

Buddy.

This concludes todays teleconference. You may disconnect your lines at this time and thank you for your participation.

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