Q4 2021 Protalix Biotherapeutics Inc Earnings Call

Good morning, ladies and gentlemen, and welcome to the pro Talecris Biotherapeutics full year 2021 earnings call at this time.

All participants are in a listen only mode and the conference is being recorded I will now turn the conference over to our host Mr. Chuck Modelo of lifestyle advisors Investor Relations for <unk>. Thank you. Please go ahead.

Thank you Donna.

Welcome to the park, Alex Barth you to.

Physical year 2021 financial results and business update conference call.

With me today are Sean <unk>, President and CEO of College, and I, All Rubin Senior Vice President and Chief Financial Officer.

A press release announcing the results in the update was issued this morning and is available on <unk> 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 the photonics filing with the U S Securities and Exchange Commission.

With that I will now turn the call over to Mr. Sean sure.

Thank you for the introduction means production, Chuck and welcome everyone to Protonix fiscal year, 2021 financial results and business update call.

During this call we will review the progress of our key clinical programs mm.

Provides an update of some of our future plans.

Following my remarks, Mr. Eyal Rubin, our Chief Financial Officer will review, our financial results and we will then.

And then open the line for questions.

Very pleased with the progress we made during 2021 over the course of last year, we made significant strides in multiple fronts first we have finalized the balance phase III study and.

And we plan to share top line results of this study by next week.

We have reviewed with applicable regulatory agencies, all pathway for regulatory submissions for.

Well the U U we have reviewed the old pathway for submission of a marketing authorization agreement or MAA for PRA swallow too with European medicines agency or EMA.

Which was actually submitted in February of 2022.

Well the United States, we have reviewed the first wave of always submission of the biologics license application or BLA.

Oh, yeah rates, one or two of which we expect to be submitted to the FDA. Later this year I want to emphasize the close collaboration we continue to live with Oracle commercial cloud, though.

He has he global rare disease.

All aspects of Parex, one or two program and we thank them very much for their efforts and appreciate their partnership.

In parallel we invested resources you know early stage pipeline towards funds a number of programs.

Our goal is to continue to invest both human and financial capital into new product candidates and established most significant pipeline, while we maintain our focus in bringing pier rigs one or two to the finish line.

Finally, we strengthened our financial balance sheet in the second half of this year.

Last year actually.

We have sufficient cash runway until Q3 2023.

Let me now review our results.

And our expected milestones in greater detail.

At the end of 2021, we together with scares he completed the type a meeting with the FDA regarding pier rigs, one or two a BLA.

Oh, sorry.

At this meeting took place actually following a complete response letter we received in April of 'twenty, One 2021 with guidance received from the FDA. We in kids. He developed a pathway for Resubmission of the BLA for Parex, one or two and we expect to resubmit. The parents, one or two BLA to the FDA in the second half of this year.

We anticipate that that the tickets for the BLA Resubmission will include results from our phase III balance.

I'll start the clinical trial.

As mentioned, we expect to announce top line results next week at final analysis of the biomarker study is anticipated to be available later this year. After we have finalized all the analysis and discussion of the collected thus we believe that the balance results if positive together with our data set from the phase III.

Right and the phase III breach dry.

Mike provides a compelling case to the regulators to consider these important new potential treatment option for it does patients with fabry disease.

In February of 2022, we in kidney submitted an MAA to the European Medicines agency.

Therefore pier rigs, one or two for the treatment of adult patients with appropriate disease.

Vacation well validated confirming that all essential elements required for scientific assessments Hey were included in the application is.

M. A M E ease approved peer rates, one or two will be authorized for sale in the old members nations of the European Union. We are very excited to have achieved these milestones and we're looking forward to providing updates as they arise.

Turning to our early stage Python Parex 115 is a pegylated enzyme expressed by prosthetics for intravenous administration of recombinant jewelry cars.

And as we all starting as a potential treatment for refractory gout gout is the most common inflammatory arthritis in the United States affecting an estimated $9 2 million adults.

And then estimate the approximately 2% of the Gulf population is considered to have chronic refractory disease, you'll recall the enzyme converts uric acid. It while the nation will be choosy easily eliminated through yearend. However, do you regard the enzyme does not exist naturally in humans, we use prosthetics to express.

And optimize recombinant Eureka as Enzo, which we are designing to have any approach of life reduce immunogenicity and potentially longer term efficacy.

We have initiated toxicology studies LDL D C and we plan to initiate the phase one clinical study early next year.

They can run these peer rigs 119, which is a pegylated recombinant human human D. N S. One expressed by all system prosthetics and design to elongate Vietnam half life in the circulation for the treatment of Smith related diseases.

The FDA approved via those one during the alpha is for treatment of cystic fibrosis patients via inhalation.

Developing long acting do you not want to potentially customize the treatment of horizon medical condition in which net all uniform and we will update you as the program develops and we identify and we identify I'm sorry, an initial target indication.

I will now turn to a young for a review of our financials.

Please go ahead.

Thank you Dror and thank you everyone again for joining today's call.

Let me review, our fourth quarter and full year 2021 financial.

For the year ended December 31st 2021 we recorded revenues from selling a $16 7 million, an increase of <unk> 5 million or 3% compared to revenues of $16 2 million for the same period of 2020.

Revenues from license and R&D services for the year ended December 31st 'twenty, 'twenty, one or 'twenty.

$21 6 million compared to $46 7 million for the year ended.

December 31 2020.

Revenues from license agreements, representing the revenue recognized in connection with the kids He agreement.

The decrease is primarily due to lower cost incurred in the year ended December 31, 2021 in connection with the peer Rex problem.

Cost of goods sold was $16 3 million for the year ended December 31st 2021, an increase of $5 4 million or 50% versus $10 9 million for the year ended December 31st 2020.

The increase was primarily from one time and factoring costs incurred while preparing for the than anticipated FDA approval of the pure XOMA, two BLA and higher manufacturing costs.

R&D expenses for the year ended December 31st 2021 were $29 7 million, a decrease of $8 5 million or 22% compared to $38. Two for the year ended December 31st 2020.

Decrease is primarily due to the completion of the three phase III clinical trials appear Exxon or two as Troy mentioned.

We expect R&D expenses to continue to be our primary expense as we enter into a more advanced stage of preclinical and clinical trials for certain of our product candidates.

Elaborated by door earlier.

Selling general and administrative expenses were $12 7 million for the year ended December 31st 2021, an increase of $1 6 million or 14% versus $11 1 million for the year ended December 31st 2020.

The increases all the primarily from an increase in corporate costs related mainly to ensure.

Financial expenses net was $7 1 million for the year end December 31st 2021.

These are $2 1 million or 23% compared to $9 2 million for the same period of 2020.

As of December 31st 2021, our cash cash equivalents and short term bank deposits were approximately $39 million compared to $38 five.

As of December 31st 2020.

As Joe mentioned earlier during the third quarter was 2021 successfully completed a note exchange to effectively lowered the aggregate principal amount over our then outstanding convertible notes to $28 $75 million and to extend the maturity of the remaining notes from 2021 'twenty 'twenty four.

We believe that our current financial position provides us sufficient cash runway through the third quarter of 2023.

I will now turn the call back to usual.

Thank you yeah. So thanks to all of you joining us for today's call and we look forward to working closely together, we scarcely used to collaborate with the FDA and EMEA to bring the pier rigs one or two to market.

As I mentioned in my opening remarks, we are extremely extremely excited for the opportunity for Resubmission, which lies.

I'm sorry.

As I mentioned in my opening remarks, we are extremely excited for the opportunity to Resubmission for Resubmission, which lies ahead in second half of 2022. Our aim is to bring forward. These important potential treatment option for adult patients with disease.

Now I will turn the call on the call back to the operator and let's have your questions.

Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.

The Star Keys, once again Thats Star one to register a question at this time.

Our first question is coming from Jon Morrison of sacks. Please go ahead.

Hey, good afternoon, yeah. Good to hear your voices again are in the.

The bright study what was the trigger for switching the one patient from the four week regime to the two week regime.

Again, please in the balance study.

I'm sorry in the bright study sorry, yeah in the bright study what was the trigger for switching the one patient from the four week to the two week regimen.

But I don't I don't have the answer in front of me was if you can speak about one patients out of 30 that were enrolled.

Well, we look into it and we can get back to you.

Because I noticed that you know all the patients are supposed to be in the four week regimen, and then one of them shifted to the the two week and I was just wondering what if there was a trigger or something that then shifted that high I assume there was a trigger we will verify the.

And that will revert of course, okay sounds good sounds good and then on KC rare disease have they started sales yet is there do they have a sales team in place already.

So when your product rolls on you know do they already have.

Yes.

Establish a rare disease business as I think most of the three years ago, if I remember when they both go okay, well I'll say it and they have recruited.

Yeah.

Enough, if I may say infrastructure, well well experience for you if I may say from the main the <unk>.

You know from her disease companies and other companies with experience so actually please.

Please remember that we were ahead of approval actually a year ago close to a year ago. So they do have enforced stopped doing that.

Called marketing.

The white term will speak about say just patient advocacy.

Marketing.

And market access et cetera on the ground with I assume many hundreds of years of experience in each of the continents ready to go.

That's great that's great news.

And then last question for me is on the Resubmission of the peer excellent two BLA Resubmission is the only thing that you're waiting on there really is the the results from the balance study. The final results to submit that or is there something else that also needs to get completed before you resubmit.

We are actually.

You know once we open the door.

Our results in shell.

And then there would be a couple of months to find out the results of the balanced out doing established you'll see us all which is a clinical study report.

And then in parallel it actually and this is he's not on the critical path, but it's gonna be radios, where it is of course, the freedom and finish it.

All the <unk>.

Dot there around it.

And actually beyond that there is nothing else so.

So this is this is why we all get to we will be moving to find myself into a final steps of player submissions. Later this year once the C has always done.

Assuming.

It will take another few weeks, you'll know QA process that the tests are very funny everything is okay and then we move on.

Okay. Thanks for the detail door I'll hop back into you. Thank you. Thank you Sir.

Once again, ladies and gentlemen that is star one to register any questions at this time.

Yeah.

We have additional questions coming from Jonathan sacks. Please go ahead.

Thanks, Thanks for taking my follow up on just a couple of questions on on the forecast for next year for R&D.

You mentioned something about that you know that we're going to maybe see a incremental increase year over year. As you know had about $30 million and R&D expense for 2021.

What do you see as the the direction of that in 2022.

I assume that they are net net they were gonna see more investments in the preclinical data in the early stage pipeline and you're on the expense of pure X one or two as we you know.

Progress in the submission obviously, it's not going to be part of the R&D as we expect most of the regulatory cost to be behind us. So nothing that I guess, we're going to be in the same neighborhood, maybe a couple of millions more.

Significant is going to be only a I think a new deployments of the capital from one or two it seems all the trials are done and most of the expenses are already behind us.

Deploying them into the new.

All the early pipeline that we have.

Okay. That's helpful. Thank you.

Okay.

Thank you at this time I'd like to turn the floor back over to Mr. <unk> for closing comments.

Thank you for that.

So all I ask is to thank you again for the time and I Hope we will have a good news next week.

And then we will update you of course accordingly, thank you very much.

Ladies and gentlemen, thank you for your participation. This concludes today's event you may disconnect. Your lines have log off the webcast at this time and enjoy the rest of your day.

Okay.

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