Q1 2022 Protalix Biotherapeutics Inc Earnings Call
Alexandra Schuman: 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.
Speaker 2: The St the.
Speaker 2: The.
Speaker 3: And this teleconference include forward-looking statements.
Speaker 3: 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 proalysis filings with the United States Securities and Exchange Commission.
Speaker 3: I will now turn the call over to MR drabassean drawer.
Dror Bashan: 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 month. Following my remarks, Eyal will provide a more detailed review of our financial results. We will then open the line for questions, of course.
Speaker 4: I will begin with a review of our progress and accomplishments over the first quarter, along with our plans for the coming month.
Speaker 4: Following my remarks, Yann will provide a more detailed review of our financial results. We will then open the line for questions, of course.
Speaker 4: We will then open the line for questions, of course.
Dror Bashan: Let me begin with a summary of the positive topline results announced in April from our Phase III balanced clinical trial of PRX-102 for the treatment of Fabry disease in adults.
Dror Bashan: We are very pleased to report that the trial successfully met its primary endpoint and that the data showed a favorable tolerability immunogenicity profile for PRX-102. We plan to provide the 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.
Dror Bashan: At our KOL event, which also took place in April, Dr. David Wornock from the University of Alabama in Birmingham described the balance study, the topline results of the balance study, and our next steps.
Dror Bashan: He also provided an overview of the $2 billion 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.
Dror Bashan: The company, together with its development and collaboration partner Chiesi global world disease called Chiesi currently plans to resubmit the biological license application, or BNA, to the FDA in the second half of this year, and continued to be on track to achieve that goal. It is intended that the BLA package will include the positive results from the company's three Phase III clinical trials, the balance bridge and the bright studies, and, of course, the company Phase I2 study which was conducted before.
Dror Bashan: And continued to be on track to achieve that goal. It is intended that the BLA package will include the positive results from the company's three Phase III clinical trials, the balance bridge and the bright studies, and, of course, the company Phase I2 study which was conducted before.
Dror Bashan: As announced last October, after the company and Chiesi participated in a Type A review meeting with the FDA, the company and Chiesi gained clarity on the pathway and the company believes that a compelling and consistent data set from both treatment by [inaudible] in 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 the European Medicine agency, or EMA on February 7th, 2022, which was subsequently validated by the EMA.
Speaker 4: The company carears gained clarity on the path way called through the company belie that ittailhas, a compelling and consistent data set from both treatment by evand ends in replacement therapy. Experienced patients for inclusion in the BLA resubution.
Speaker 4: In Europe . We intiously submitted the marketing authorization agreement of a for the PRX one or two with the European Medicine agency, or Emma, on February seventh, twentthousand and 22, which was subsequently validated by the EMA.
Dror Bashan: We believe Protalix is starting the transitional period. There was data from from the three Phase III studies demonstrating the potential of PRX-102 to be a good treatment for patients with Fabry disease. We have full in-house manufacturing capabilities, a commercialization plan with our global partner, Chiesi, and a clear pathway for the anticipated approval of PRX-102.
Dror Bashan: Additionally, we have a pattern 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 a global commercial world-class biopharmaceutical company.
Dror Bashan: Finally, our balance sheets provide us with sufficient case run way until Q3 of 2023, enough to support our plans for resubmission and potential approval in addition to continuing to develop our early-stage pipeline. We continue advancing our early-stage pipeline and we'll share the progress made once available.
Dror Bashan: I will now turn to Eyal to review our financial results. Eyal, please go ahead.
Eyal Rubin: Thank you Dror, and thank you everyone for joining today's call. Let me review our first quarter 2022 financials.
Speaker 5: Let me review our first quarter 2022 financials.
Eyal Rubin: For the quarter ended March 31st, 2022, we recorded revenues from the 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.
Eyal Rubin: Revenues from license and R&D services for the quarter ended March 31st, 2022 were $7.1 million, compared to $6.8 for the quarter ended March 31st, 2021. Earnings from license R&D services represent revenues the company recognizes in connection with its license and supply agreements with Chiesi.
Eyal Rubin: Earnings from license R&D services represent revenues the company recognizes in connection with its license and supply agreements with Chiesi.
Eyal Rubin: Cost of goods sold was $6 million for the three months ended March 31st, 2021, an increase of $1.2 million or 25% versus $4.8 million for the same period last year. The increase in the cost of goods sold was primarily the result of higher sales.
Eyal Rubin: Research and development expenses for the months ended March 31st, 2021 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 is primarily 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 study. Selling and general administrative expenses were $3.2 million for the few months ended March 31st, 2022, an increase of 0.1 million or 3%, versus $3.1 million for the same period last year.
Eyal Rubin: Financial expenses net were $0.4 million for the three months ended March 31st, 2022, a decrease of $1.4 million or 78%, compared to $1.8 million for the same period last year.
Eyal Rubin: The decrease resulted primarily from lower interest and [inaudible] amortization costs due to a decrease in the total principal amount of the company's outstanding notes.
Eyal Rubin: 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 issue 2024 notes effectively cutting the debt by about 50%.
Eyal Rubin: As of March 31st, 2022, our cash, cash equivalents, and short-term bank deposits are approximately $32.9 million, compared to $39 million as of December 31st, 2021. We believe that our current financial position provides us with sufficient cash runway through the third quarter of 2023.
Eyal Rubin: I will now turn the call back to you, Dror.
Dror Bashan: Thank you, Eyal. So thank you everyone for joining us on today's call. We look forward to the BMA submission in the US, 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.
Dror Bashan: We are extremely excited by the opportunity ahead of us and looking forward to bring 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: Thank you. We will now be conducting the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you 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 key. One moment please, while we pull for your questions. Our first question comes from the line of John Vandermosten with Zachs. Please proceed with your question.
John D. Vandermosten: Thank you and good afternoon, Dror and Eyal. I hope you guys are doing well. I wanted to ask about the clock stop coming up pretty soon for the EMA submission. Does the MMA 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?
Multiple speakers: We are waiting for the input. Okay, very good. And another thing related to the EU, now that the UK has left the EU, what's the process there to get access to that market? I think I looked it up and I saw 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?
Multiple speakers: 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? Yes, no problem, I mean, I think there is some kind of weird thing right now and I actually, I don't even know myself kind of how--It's a very good question, but I will get back to you shortly.
Multiple speakers: Sounds good. And let's see- I think you probably touched on this a little bit- anything that sticks out in your mind that needs to get done now that we're finish with the balanced trial for the FDA submission? I mean, I guess you're just compiling information and putting things together for that second half. Is there anything that sticks out in your mind that's particularly important there?
Dror Bashan: Everything will be [inaudible] if I may say. Indeed we are analyzing and finalizing the [inaudible] balance. You're looking at all four 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 is reflecting a very good safety profile. So it's actually just to look, if I may say, to connect the dot and see the full picture and strengthen the totality of the data, if I may say.
Speaker 8: thec of the ball. You're looking at all four clinical Tris. You know back and force include all the safety data we have, many hundreds of years, if I may say, exposure on the grapg, on the drug which?
Speaker 8: Reflecting a very good safety profile. So it's actually just to look.
Speaker 8: If I may say to connect the dot and see the full picture and you strengthen the totality of the data. If I may say.
John D. Vandermosten: 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 use and operations, and what was that difference attributable to?
Eyal Rubin: Obviously, the net loss includes the depreciation and includes non-cash such as the service compensation. It's not transferred one-for-one into the cash position. As we did mention, many times in the past, our quarterly net run rate is approximately $6 million a quarter and I think that if you run the numbers that's where we are for the past two plus years.
Multiple speakers: Oh sure, exactly. Alright, thank you so much. I appreciate it. That's all from me. So thank you, John and I will get back to you.
Operator: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad.
Operator: 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.
Speaker 6: And on behalf of fertalx. 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.