Q1 2024 Protalix BioTherapeutics Inc Earnings Call & Business Update
Speaker Change: [music].
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Operator: Good morning, ladies and gentlemen, and welcome to the Protalix Biotherapeutics First Quarter 2024 Financial and Business Results Conference Call. As a reminder, this conference call is being recorded. I will now turn the conference over to our host, Mr. Mike Moyer of LifeSci Advisors, Investor Relations for Protalix. You may begin your count.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Photonics Biotherapeutics first quarter 2024 financial and business results Conference call.
Speaker Change: A reminder, this conference call is being recorded.
Speaker Change: I'll now turn the conference over to our host Mr. Mike Meyer of lifestyle Advisors Investor Relations for Photonics, you May begin your conference.
Mike Moyer: Thank you, operator, and welcome to the Protalix Biotherapeutics first quarter 2024 financial results and business update conference call. With me today are Dror Bashan, President and CEO of Protalix, and Eyal Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the results and the business and clinical updates was issued this morning and is available now on the Protalix website. Please take a moment to read the disclaimer about overlooking statements in the press.
Mike Meyer: Thank you operator, and welcome to the Calix Biotherapeutics first quarter 2024 financial results and business update conference call.
Mike Meyer: With me today are Dror, Bashan, President and CEO, Alex <unk> Rubin, Senior Vice President and Chief Financial Officer.
Mike Meyer: A press release announcing the results and the business and clinical update was issued this morning and is available now on the metallics website.
Mike Meyer: 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.
Mike Moyer: The earnings released in 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 U.S. Securities and Exchange Commission. I will now turn the call over to Dror Bashan. Dror.
Mike Meyer: Factors that could cause actual results to differ are described in the disclaimer and if a calix its filings with the U S Securities and Exchange Commission.
Speaker Change: I will now turn the corner all over.
Speaker Change: Sean.
Speaker Change: Sure.
Dror Bashan: Thank you, Mike, and welcome everyone to our first quarter of 2024 financial results and business update. I will begin by reviewing our recent accomplishments before handing the call to Eyal, who will provide a more detailed review of our financial results, and we will then open the line for questions.
Sean: Thank you, Mike and welcome everyone to our first quarter of 'twenty 'twenty, four financial results and business update call.
Sean: I'll begin by reviewing our recent accomplishments before handing the call to a Yahoo will provide a more detailed review of our financial results.
Sean: We then open the line for questions.
Dror Bashan: I will turn first to PRX115. As announced this morning, given the encouraging initial top-line results from the first... Seven cohorts of the companies.
Yahoo: I will turn first to <unk> 115.
Speaker Change: As announced this morning, given the encouraging initial top line results from the first.
Speaker Change: Seven cohorts of the companies.
Dror Bashan: Phase 1 First Study of our recombinant uric acid candidate, PRX-115, and following the review and acceptance of the safety data by the Safety and Monitoring Committee, the company has decided to expand the study by adding an eighth cohort. Consistent with the initial seven cohorts, the new cohort will consist of eight new subjects, and we'll analyze the higher dose of PRX-115 and the potential of a higher dose resulting in increased exposure time
Speaker Change: Phase one study.
Speaker Change: The study will be.
Speaker Change: Our recombinant <unk> candidates theatrics, one one site and following the review and acceptance of the safety.
Speaker Change: The safety and monitoring committee.
Speaker Change: And he has decided to extend the study by adding an eighth cohort consistent with the addition of seven quotes the new cohort will consist of 18 subjects.
Speaker Change: And we analyze the higher dose of theatrics 115, and the potential for higher dose exposure time.
Dror Bashan: In addition to extracting the first human study, the company also decided to commence preparations for a Phase II clinical trial of BRX115. PRX115, to remind you, is a recombinant-pegulated uricase product candidate produced using our ProCellExplained CellExpressions platform. The study is a double-blind, placebo-controlled, single-ascending dose.
Speaker Change: In addition to the extension of this what I see in human study. The company also besides it commenced preparations for a phase two clinical slides yeah rates 115.
Speaker Change: Yeah, I mean, it's 115 to remind you is a recombinant pegylated uricase product candidate produced using Gulfport Fedex Duane Sinn explore some sports platform.
Speaker Change: The study is a double blind placebo controlled thing.
Speaker Change: In ascending dose.
Dror Bashan: In First in Human Phase I Clinical Trial, the company designed to evaluate the safety, pharmacokinetics, and pharmacodynamics following a single dose of PRX-115 in subjects with elevated uric acid levels. Of the 56 randomized subjects enrolled in the study across seven cohorts, 42 subjects were treated with PRX-115, and 14 subjects were treated with placebo. GERD is the most common inflammatory arthritis, and it affects approximately 14 million adults in the U.S., over 7 million in Europe, and over 190 million in China.
Speaker Change: Especially in U E.
Speaker Change: In human Phase one clinical trial the company designed to evaluate the safety pharmacokinetics and pharmacodynamics.
Dror Bashan: It is estimated that about 5% of gout patients are considered to have chronic refractory disease. The preliminary results from the first seven cohorts demonstrate that exposure to PRX-115 increased in a dose-dependent manner and that PRX-115 rapidly reduced plasma uric acid concentration to below 6 mg per deciliter over time following a single administration. With regard to safety, PRX-115 was found to be well-tolerated. 26% of the subjects treated with PRX-115 reported a study-related adverse event, and the majority of these were mild to moderate, and Transient in Nature. One subject in cohort number two experienced an anaphylactic reaction immediately following the start of the infusion, but the reaction was fully resolved. There were no other serious adverse events reported, and no adverse events were reported in the highest dose cohort numbers 6 and 7.
Speaker Change: Following a single dose of steroids 115 in subjects with elevated uric acid news of this is 56 bundle my subjects enrolled in this study across seven cohorts 42 subjects were treated with Spirit's 115, and 14 subjects were treated with placebo.
Speaker Change: D. C is the most common inflammatory arthritis entities.
Speaker Change: And it affects approximately 14 million of batching Jewish over 7 million in Europe in the 119 million China.
Speaker Change: These estimates are it's about 5% of adult patients occupancy that was funny.
Speaker Change: The disease.
Speaker Change: The preliminary results from the first seven cohorts demonstrates the exposure.
Two P M rigs one loan size increased in a dose dependent manner and at pier rigs 115 rapidly reduced plasma concentrations.
Speaker Change: Concentration to below six milligrams per deciliter.
Speaker Change: Over time following a single administration.
Speaker Change: With regard to the safety of Theatrics 115 was found to be well tolerated, 26% on this subject.
Speaker Change: 115 reported the study related adverse events.
Speaker Change: And the majority of these were mild to moderate in.
Speaker Change: And transient in nature.
Speaker Change: One subject in cohort number two experience and then let's see.
Speaker Change: Reaction immediately following the start of the infusion, but the reaction was fully responds.
Speaker Change: There were no other serious adverse events reported and no adverse events were reported in the highest dose cohort six and stay.
Dror Bashan: We look forward to updating you on the full results from the expanded trial following the completion of the new cohort. Our next pipeline candidate, Abel... Also being expressed through Protalix is PRX119, a pegylated recombinant human DNase 1 candidate in development for the potential treatment of diseases associated with neutrophil extracellular traps or NECs.
Speaker Change: We look forward to updating you on the full results from the expanded following the completion.
Speaker Change: The new cohort.
Speaker Change: Our next pipeline candidates.
Ben: Hey, Ben.
Ben: Also being expressed food plus that makes these pellets 119 P. M rates 119 is a pegylated recombinant human DNA was one can do they can developing for the potential treatment of diseases associated with neutral free extra send them up that's our niche.
Dror Bashan: Unknown Attendee, Dror Bashan, Eyal Rubin, Protalix Bio, Unknown Attendee, Boobalan Pachaiyappan, and have been observing various autoimmune, inflammatory, and fibrotic conditions. Animal studies with PRX119 have shown that our product candidate has the potential to be an effective treatment for these conditions. And additional proclinical studies of PRX119 are ongoing. In addition to PRX119, PRX1 and PRX115.
Ben: CECI formation of accumulation of the niche can result in different pathological.
Ben: And it has been observed in autoimmune inflammatory and fibrotic conditions animal studies, we see averaged 119 shown the adult product candidate has the potential to be an effective treatment for these conditions.
Ben: For clinical studies, just be on X one of them nine are ongoing.
Ben: In addition to Karen it's one one P. R. It's one and feelings on alongside.
Dror Bashan: The company is focusing its research and development efforts on early-stage development assets to build its product development pipeline. We look forward to providing you with updates on potential development candidates as they become more mature. Finally, as you know, our second approved drug, Lofaber, continues to gain approval. Regulatory Approvals for the Treatment of Adult Patients with Hebrew Disease
Ben: The company is focusing its research and development efforts on early stage development assets to build its product development pipeline.
Ben: Forward to providing you with updates on petition potential development candidates as they become more mature.
Ben: Finally, as you know our second approved drug at Farnborough continues to gain approvals.
Ben: The good not only approve us for the treatment of adult patients with Fabry disease. Most recently in January of this theory was approved in England.
Dror Bashan: Most recently, in January of this year, it was approved in Israel, and our commercial partner, Chiesi, Global Rural Disease, is committed to successful commercialization of El Fabrio, with launches underway in the United States, throughout the European Union, the UK, Switzerland, Israel, and additional markets where approvals have been granted. We are confident that Chiesi will continue to position El Fabrio for success, and we look forward to the continued growth of the El Fabrio franchise. Before turning the call to Eyal,
Ben: And Oh commercial pop kids eat Global road isn't is committed to successful commercialization of the popular with launches underway in the United States throughout the European Union, and the U K, Switzerland, and Israel and in additional markets Blair who was granted.
Ben: He has he will continue to position in February for success, and we look forward to the continued disposal football franchise.
Ben: Before turning the call to Liam.
Dror Bashan: I want to emphasize our strong cash position provides us with sufficient cash to enable the repayment of our convertible notes due in September of this year and for our ongoing operations. In addition, we expect sales to Chiesi to gradually continue as they anticipate future approvals and launches in additional countries. With that, it is now my pleasure to turn the call over to Eyal for a review of the financials. Please, Eyal.
Liam: I want to emphasize our strong cash position provides us with sufficient cash to enabled the repayment of our convertible notes due in September of this year.
Liam: And for our ongoing operations. In addition, we expect Sage two kids eat to gradually continue as they anticipate future approvals and launches in additional countries.
Young: With that it is normally pleasure to turn the call over to a young for a review of the financials. Please.
Eyal Rubin: Thank you, Dror, and thank you, everyone, for joining today's call. Let me review our first quarter 2024 financial results. We recorded revenues from selling goods of $3.7 million for the three months ended March 31st, 2024, a decrease of $1.4 million, or 27%, compared to revenues of $5.1 million for the three months ended March 31st, 2024. The decrease resulted primarily from a decrease of 1.1 million in sales to Pfizer and of 0.3 million in sales to Brazil, which decreases resulted primarily from the timing of delivery
Ayal: Thank you Dror and thank you everyone for joining trade school and review, our first quarter 2020 for financials.
Speaker Change: We recorded revenues from selling goods excuse me 7 million for the three months ended March 31st 2024, a decrease of one 4 million or 27% compared to revenues of $5 1 million for the three months ended March 31st 2022.
Speaker Change: The decrease resulted primarily from a decrease of one 1 million shares to Pfizer and a $43 million and cents to Brazil, which is which.
Speaker Change: Decretion resulted primarily from the timing of delivery.
Eyal Rubin: We recorded revenues from licensed and R&D services of 0.1 million for the three months ended March 31st, 2024, a decrease of 4.4 million or 98% compared to revenues of 4.5 million for the three months ended March 31st, 2022. Licensing and R&D services revenues are comprised primarily of revenues we recognize in connection with the QIES agreement.
Speaker Change: We recorded revenues from license and R&D services of 41 million for the three months ended March 31st 2024, a decrease of $4 4 million or 19, 8% compared to revenues of 545 million for the three months ended March 31st 2023.
Speaker Change: Revenues from licensing. These services are comprised primarily of revenues we recognized in connection with the kidney.
Eyal Rubin: The decrease resulted primarily from the completion of our research and development obligations with respect to Alfabrio and as Alfabrio was approved in the U.S. and the EU in May 2023, following the completion of the regulatory processes related to the review of the BLA and the NAA for Alfabrio by the FDA and the EMA, respectively. Cost of goods sold was $2.6 million for the three months ended March 31st, 2024, a decrease of $0.5 million or 16% from $3.1 million for the three months ended March 31st, 2022. The decrease in cost of goods sold was primarily the result of decreased sales to Pfizer and to Brazil.
Speaker Change: The decrease resulted primarily from the completion of our research and development obligations with respect to a flywheel and as a father was approved in the U S and EU in May 2023 from the completion of the goldstrike processes related to the review of the BLA in the NDA for Fabry O E M D M D.
Speaker Change: Okay.
Speaker Change: Cost of goods sold was $2 6 million for the three months ended March 31st 2024, a decrease of <unk> 5 million or 16% from cost of goods sold of $3 1 million for the three months ended March 31st 2022.
The decrease in cost of goods sold was primarily the result of the decrease in sales besides it to.
Speaker Change: To Brazil.
Eyal Rubin: For the three months ended March 31st, 2024, our total research and development expenses were approximately $2.9 million, comprised of approximately $0.5 million in subcontractor related expenses and approximately $1.5 million in salary-related expenses. Approximately 0.2 million of materials-related expenses and approximately 0.7 million of obvious expenses. For the three months ended March 31st, 2023, our total research and development expenses were approximately $5.8 million, comprised of approximately $3.5 million of subcontractor-related expenses, approximately $1.5 million of salary and related expenses, approximately $0.1 million of material-related expenses, and approximately $0.7 million of other.
Speaker Change: For the three months ended luxury first 2024, our total research and development expenses.
Speaker Change: $2 9 million comprise of approximately <unk> 5 million subcontracting related expenses, approximately one 5 million in salary and related expenses.
Speaker Change: Approximately 2 million of materials related expenses and approximately <unk> 7 million of Javier.
Speaker Change: For the three months ended March 31st 2020 to me I told research and development expenses were approximately $5 8 million.
Speaker Change: Comprised of approximately $2 5 million of subcontractor related expenses.
Speaker Change: Proximity 1.5 million salaries and related expenses.
Speaker Change: Approximately $1 million of materials, and an extensive and approximately $27 million of other expense.
Eyal Rubin: Total decrease in research and development expenses for the three months ended March 31st, 2024 was $2.9 million, or 50% compared to the three months ended March 31st, 2020. The difference in research and development expenses primarily resulted from the completion of our Fabry-Klinka program and the regulatory processes related to the BLA and the NEA review of alfabrio by the applicable regulatory agencies.
Speaker Change: Total decrease he used his development expenses for the three months ended March 31st 2024, It was $2 9 million or 50% compared to the three months ended March 31st 2023.
Speaker Change: The decrease in research and development expenses, primarily resulted from the completion of our preclinical programs and then roof trusses you link it to the BLA and MAA review.
Speaker Change: Fiber, you'll find the applicable regulatory agency.
Speaker Change: Selling general and administrative expenses were $3 1 million.
Eyal Rubin: Selling General Administrative Expenses were $3.1 million for the three months ended March 31st, 2024 and for the three months ended March 31st, 2020. Financial income net was 0.1 million for the three months ended March 31st, 2024 compared to financial expenses net of 0.5 million for the three months ended March 31st, 2020. The chain resulted primarily from high interest income on bank deposits and lower note interest expenses due to note conversions executed in 2020.
Speaker Change: At March 31st 2024, and for the three months ended March 31st 2022.
Speaker Change: Can I ask on income nets.
Speaker Change: $1 million from the two months ended March 31, 2024, compared to financial expenses net of $2 5 million for the three months ended March 31st 2023.
Speaker Change: The change resulted primarily from higher interest income on bank deposits and lower notes interest expenses due to node conversions executed in 2023.
Eyal Rubin: For the three months ended March 31st, 2024, we recorded a tax benefit of approximately 0.1 million compared to income taxes of 0.2 million for the three months ended March 31st, 2024. Income taxes recorded are primarily from the provision for current taxes on income mainly derived from U.S. taxable global intangible low-tax income, GILT, mainly in respect of Section 124 of the U.S. Tax Cuts and Job Act, Cash and Cash Equivalents in Short-Term Bank Deposits were approximately $48.5 million at March 31, 2023.
Speaker Change: Hello Timna.
Timna: Any first 'twenty 'twenty four we recorded a tax benefit of approximately <unk> 1 million compared to income taxes of $2 million from the three months ended March 31st 2023.
Timna: Income taxes recorded that primarily from the provision for taxes on income mainly derived from U S tax of a global intangible low taxed income guilty, mainly in respect of sexual one for me for the U S tax cuts and jobs.
Timna: Cash and cash equivalents and short term bank deposits of approximately $48 5 million at March 31st 2024.
Eyal Rubin: As Dror mentioned, we believe our cash position is sufficient to enable the repayment of our converter notes due September 2024 and for our ongoing operation. The net loss for the three-month-ended March 31, 2024 was approximately $4.6 million, or $0.06 per share basic and diluted compared to an end loss of $3.1 million or $0.05 per share basic and diluted for the same period in 2020. I will now turn the call back to you, Dror. Thanks, Eyal.
Timna: And Joe mentioned, we believe our cash position is sufficient to enable the repayment of our convertible notes due September 2024 and for our ongoing operations.
Net loss for the three months ended March 31st 2034 was approximately $46 million for it.
Timna: 0.0, $6 per share basic and diluted compared to a net loss of $2 1 million or 0.0 $5 per share basic and diluted for the same period in 2023.
Joe: I'll now turn the call back to usual.
Dror Bashan: Thanks, Eyal. In closing, I would like to express my confidence in Protalix at its current standing. We've reviewed with you our strong cash position. We have three streams of revenues, sales to Brazil, sales to Pfizer, and, of course, sales to Piazzi. We are pleased with the interim results from our PRX 115 clinical study, and we look forward to continued momentum through the rest of this year. We are continuing to leverage our expertise to develop a pipeline of early-stage assets with the potential to address rare diseases with high unmet needs. We look forward to updating you on our progress as we continue to drive innovation and create long-term value for both patients and stakeholders. Now, I would like to ask the operator to open the line for questions. Thank you.
Speaker Change: In closing I would like to express my confidence in probiotics and its current spending we've reviewed with you our strong cash position. We have three streams of revenues shows the Brazil sales to Pfizer and the school status.
Speaker Change: We are pleased with the interim results from me for Mike.
Speaker Change: From our PR rates 115 clinical study and we look forward to continue to the continued momentum through the rest of this year. We are continuing to leverage this expertise to develop a pipeline of early stage assets with the potential to address rare diseases with high unmet.
Speaker Change: We look forward to updating you on our progress as we continue to drive innovation and create long term value for both patients and stakeholders.
Speaker Change: Now I.
Speaker Change: I would like to ask the operator to open the line for questions.
Speaker Change: Thank you.
Operator: If you would like to ask a question at this time, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Speaker Change: If you'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.
Speaker Change: You May press Star two if you like to remove your question from the queue.
Speaker Change: Her participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one melon. Please open call for questions. Thank you.
Operator: One moment, please, while we poll for questions. Thank you. Thank you. And the first question comes from the line of Ram Selvaraju with H.C. Wainwright. Please proceed with your question.
Speaker Change: Thank you and the first question comes from the line of Robert Self Russia with H C. Wainwright. Please proceed with your questions.
Ram Selvaraju: Hi, thanks very much for taking my questions. I wanted to ask specifically about PRX115 and whether you could delineate for us the specific gout sub-population in which you anticipate this drug candidate might be utilized if approved, and what the competitive landscape currently looks like, as well as what types of advantages you anticipate 115 might have against those drugs. I think in particular, you know, we are talking about a commercially available product called CRISTEXA.
Speaker Change: Hi, Thanks, very much for taking my questions I wanted to ask specifically about P. Rx 115, and whether you could delineate for us These specific gout.
Speaker Change: Population and which you anticipate this drug candidate might be utilized approved and what the competitive landscape currently looks like as well as what types of advantages you anticipate 115 might have against those drugs I think in particular are you.
Speaker Change: You know we are talking about a commercially available product called KRYSTEXXA. So perhaps you can enumerate for us whether you believe 115 will have advantages on efficacy safety and convenience or if you anticipate a.
Ram Selvaraju: So, perhaps you can enumerate for us whether you believe 115 will have advantages in efficacy, safety, and convenience, or if you anticipate PRX115 advantages in only one or two of those three categories and how you expect the drug's advantages to ultimately demonstrate themselves. I realize that it's relatively early in the drug development process, but was hoping you could enlighten us on this. Thank you.
Speaker Change: Advantages on only one or two of those three categories and how you expect that drugs advantages too.
Speaker Change: Ultimately demonstrate themselves I realize that it's relatively early in the drug development process.
Speaker Change: You could and license.
Dror Bashan: So, thanks, Ram. As you know, we have finalized the final group. The first 7 cobalts, you know, it's the first, you know, it's a single-dose study, so... We want to be careful, but still, we are optimistic. We're moving to cohort number eight, as we mentioned, and we are potentially saying that this potential drug will address, I would say, uncontrolled... We, as mentioned, initiate, you know, the preparations for the phase two study, which will be, of course, a multiple-dose study, and we will be much smarter.
Speaker Change: Thank you.
Speaker Change: So thanks to them.
Speaker Change: As you know we have finalized the findings are good.
Speaker Change: The first seven quotes you know, it's just because you know the singer those study.
Speaker Change: So.
Speaker Change: We want to be careful but CTO optimistic we're moving to gross number eight as we mentioned and we weird.
Speaker Change: <unk> seen these potential drug we'll address I would say uncontrolled.
Speaker Change: Gout patients okay.
Speaker Change: As mentioned, we initiated the preparations for the phase two study, which will be closely multiple dose study.
Speaker Change: Do we.
Speaker Change: We will be much smelter right now and we hope to see.
Dror Bashan: Right now, we hope to see... We hope to see, I want to be careful, improved safety and better frequency of the drug. Thank you. You know, from efficacy, by the end of the day, we want to reduce the uric acid, of course, below six or way, way below six, in a way which will be as consistent as possible throughout a full year or longer, but let's see. We think that the results we see right now are encouraging, and this is why we move on. Close the studio. [inaudible] Not only with the safety comment but, of course, also with our board when we got the green light to prepare a face-to-face meeting.
Speaker Change: We hope to see I want to be careful in Poland.
Speaker Change: Safety.
Speaker Change: And.
Speaker Change: And better frequency.
Speaker Change: The drug.
Speaker Change: Thank you.
Speaker Change: You know from a efficacy by the end of the day.
We want to reduce the risk I see of course below seeks a way way below six.
Speaker Change: In a way, which would be as consistent as possible throughout.
Speaker Change: Full year, all you won't be yours, and let's see we are very we think of that the results we see right now.
Speaker Change: Bridging this is why we move on them.
Speaker Change: Well, we just started deal.
Speaker Change: And I'll put the CSR and of course, we got to we discuss at the board.
Speaker Change: Tony would you say has to come from what schools also with our board when we got the greenhouse to prepare a phase two.
Dror Bashan: Right now, today, as you know, ChrisTexa is on the market with ONCE in two weeks. As far as we know, and there is a product by Sobi that's supposed to enter the market I don't know, next year, something like that.
Tony: Right now today as you know.
Tony: KRYSTEXXA is on the market with once in two weeks.
Tony: While as we know and degrees of product by somebody that's supposed to enter the market.
Tony: Next year something like this.
Dror Bashan: Just to clarify, assuming that you move into phase two, would you expect the efficacy endpoints used in Phase II to include things like reduction in flares or reduction in TOFI? And are you expecting to be able to position 115 as a direct competitor to Cristexa, or do you expect, ultimately, 115 to be utilized in patients who either are not considered candidates for Cristexa because of some safety concerns or are refractory to Cristexa? I think, Lukas.
Tony: Just to clarify are assuming that you'll move into phase two.
Tony: What do you expect the efficacy endpoint used in phase two to include things like reduction in flares or reduction in Tau Phi.
Tony: And are you expecting to be able to position the 115 as a competitor.
Tony: A direct competitor to KRYSTEXXA or do you expect ultimately 115 could be utilized in patients who either are not considered candidates for KRYSTEXXA because of some safety concern or are refractory to KRYSTEXXA.
Dror Bashan: I think first we have to finalize, of course, and we are planning a meeting with regulators both in the US and the EU to address our potential design of Phase 2 and the overall clinical program. Then, I think we will be smarter to answer you on the first one. On the second one, yes, the intent is indeed to compete on the market for the uncontrolled gout patient.
Speaker Change: Okay. Thank you.
Speaker Change: First we have to finalize the schools, we are planning a meeting.
Speaker Change: Regulators, both in the U S and the U K.
To address the power and potential design of the phase two and the overall typical program then I think we'd really be smarter too.
Speaker Change: Answer you on the first one on the second one yes.
Speaker Change: The intent is indeed to compete on the market the uncontrolled gout patients.
Speaker Change: Thank you very much.
Speaker Change: Yeah.
Youre welcome.
Operator: Thank you. As a reminder, to ask a question today, press star 1. The next question is from the line of John Vandermosten with SACS. Please answer your question.
Speaker Change: Thank you.
Minder and ask a question press star one.
Speaker Change: The next question is from the line of Jon Vander Molson Whats ex please proceed with your questions.
John D. Vandermosten: Thank you, and good afternoon, Dror and Eyal. So for 1.1.5, I believe the patients are infused once, and then you're observing them over a three-month period. How do the PK levels trend over that period?
Speaker Change: Thank you and good afternoon, Dror and ill.
Speaker Change: So for 115, I believe that patients are infused once and then you're observing them over a three months period, how do the PK levels trend over that period.
John D. Vandermosten: You're asking about the, you know,
Speaker Change: You're asking about the in our rating for seven cohorts, yes.
John D. Vandermosten: Yes. Yeah, and I'm assuming that probably has a similar decline rate.
Speaker Change: Yes, exactly and I'm, assuming that you didn't know.
Speaker Change: Probably a similar decline rate.
Speaker Change: Yeah.
Dror Bashan: So, you know, we didn't want to show the full picture until we had the full data of all eight cohorts. So once we have everything together, including, of course, the safety data, which is most important, we will share it properly.
Speaker Change: So you know we we did look the yet we wanted to show the full picture. Once we had the food don't go all eight cohorts so ones would be live everything together, including of course, the safety data, which is most important is we wouldn't share it appropriately.
Speaker Change: We didn't want to show I would say hostile.
John D. Vandermosten: Okay, and does that three month period seem like the right interval to use, or maybe more frequently? You know, as you mentioned, one of the competitors has a much shorter interval between dosing, and that does seem like a little bit longer period of three months. Do you think in the future it might change for phase two? Or how do you think about that?
Speaker Change: Okay and does that three months period seemed like the right interval to use or maybe more frequently and as you mentioned one of the competitors has a has a much shorter interval between dosing and that does seem like a little bit longer period of three months, what do you think in the future it might change for the phase two.
Speaker Change: Or how do you think about that.
John D. Vandermosten: So John, maybe I missed what you meant by three months. Can you repeat that, please? Um, so yeah, just looking at, you know,
Speaker Change: So Joe maybe I mean, what do you mean.
Joe: Three months can you repeat it. Please so so yeah just looking at you know the trial design discuss them in the clinical trials I think you're observing patients over three months period with one infusion and I'm wondering what the ultimate infusion periodicity would be based on what you've seen so far.
John D. Vandermosten: So, yeah, just looking at the trial design discussion in the clinical trials, I think you're observing patients over a three-month period with one infusion, and I'm wondering what the ultimate infusion periodicity would be based on.
Joe: Yeah.
Speaker Change: Well I think I don't follow your question I am very sorry.
Speaker Change: Okay. No problem, we can we can follow up no no. Please.
Dror Bashan: Well, I think I don't understand your question. I'm very sorry. Okay, no problem. We can follow up later. No, no, please. What we see, and we are very much encouraged, are good results, reducing the uric acid level, of course, fast and significant. And therefore, we move into cohort number eight. Once we have all the data, we will share it transparently, of course.
Speaker Change: What what we see and we are very much encouraged.
Speaker Change: These good results, reducing the uric acid live and of course Boston sequels.
Speaker Change: And therefore, we move into cohort number eight once we have all the data we will share with transparency of course.
Dror Bashan: Okay. I think, John, that the fact that we're monitoring patients over three months doesn't necessarily indicate that the infusion intervals are going to be once every three months. Obviously, we have to follow, as you all mentioned, the full set of data, the PK, the PD, and the safety, and then make a judgment call ahead of phase two about what the intervals and what the dosing is.
Speaker Change: Okay.
Speaker Change: I think John that the fact that we are monitoring patients over three months doesn't necessarily indicate that the IV infusion each of us are going to be once every three months. Obviously you have to follow as Joe mentioned, the full set of data in the PK, the PD and safety and then make a judgment call ahead of the phase two odd to see what the Internet was and what the dosing is gonna be.
Speaker Change: Yeah.
Speaker Change: Okay great.
John D. Vandermosten: Great, and then you mentioned that one of the patients experienced an anaphylactic reaction. What did you do to alleviate it?
Speaker Change: Great and then you had mentioned that the one of the patients experienced anaphylactic reaction.
Speaker Change: What did you do to alleviate it it seems like it was it was it was easily resolved, but I was just wondering if there was any any specific characteristics of that patient or if it was I mean, it's about that.
Dror Bashan: It seems like it was easily resolved, but I was just wondering if there were any specific characteristics of that patient, or if it was... No, I mean it's... It was, I think it was the first patient or second patient in cohort number two. It was six minutes into the infusion, meaning it was very fast. And it was resolved, and was taken care of by the Unknown Attendee, Dror Bashan, Eyal Rubin, Protalix Bio: Dror Bashan, Eyal Rubin, Protalix
Speaker Change: It was I think it was the first patients a second patient cohort number two equal six means that maintenance into the excusing, meaning very fast and it was resolved was taken care of by then.
You know physicians into and the team over the center and this is the only one to 10.
Speaker Change: And this such a reaction.
Speaker Change: And that's as we mentioned are.
Speaker Change: The majority of the.
Speaker Change: I'm sorry.
Dror Bashan: Side effects, if I may say, were mild to moderate, and as we went up the cohorts in 6 and 7, no AEs were recorded.
Speaker Change: I can say were mild to moderate and as we went up the cohorts.
Speaker Change: And six and seven no aes were reported.
Speaker Change: Mhm.
John D. Vandermosten: And then looking ahead to phase two, you know, I think you just have sites in Australia right now. I guess as you look towards a more advanced trial, would those sites be more scattered around the globe? And are there any particular geographies that look attractive for that?
Speaker Change: Okay.
Speaker Change: Then looking ahead to a phase two you know I think you just have sites in Australia right now I guess as you look towards a more advanced trial.
Speaker Change: With those sites be more scattered around the globe and are there any particular geographies that look attractive for that.
Dror Bashan: So we will... You know, we have not chosen yet, but we have, you know, the last few candidates to choose from as a CRO. I think it will be We will probably move to the U.S. and other continents as well. Okay. Okay.
Speaker Change: So we will.
Speaker Change: You know, we we did not close yet, but we haven't but you know the last thing very few candidates to choose from who is a CLO.
Speaker Change: I think it will be a.
Speaker Change: We will move probably to the U S and other continents as well okay.
John D. Vandermosten: Okay, sounds good. And then there was also a mention of looking forward to R&D spend. And I guess the three areas are 115, 119, and other early stage assets. And how do you think about the breakdown of R&D towards those three different areas? I mean, it sounds like probably 115 is going to be the main consumer of R&D. But what about the other two?
Speaker Change: Sounds good and then there was also I mentioned of looking forward R&D spend and I guess the three areas are 115119 and other early stage assets and how do you think about the breakdown of R&D towards those three different areas I mean, it sounds like probably one five is going to be the main.
Speaker Change: Consumer of R&D, but what about together.
Speaker Change: So look the.
Speaker Change: The main concern of R&D I would say all.
Speaker Change:
Dror Bashan: So, look, the main content of R&D, I would say, of a... Product under R&D, as you mentioned, will be 1.15.
Speaker Change: Product on the R&D as you mentioned it would be 115, we want to be careful.
Dror Bashan: We want to be careful with the spend. As we mentioned, We sit on, I would say, 48 million dollars at the end of the quarter, which would be enough, I emphasize this, and I will close the loop in a minute, which would be enough to pay off the debt by the beginning of September of this year, meaning we will be, by the end of the year, from the beginning of September, a company with no debt and enough cash to maintain our operations.
Speaker Change: We just spend.
Speaker Change: As we mentioned.
Speaker Change: We see total I would say $4 million to $8 million end of the quarter.
Speaker Change: And which would be enough emphasize it.
Speaker Change: Closed the roofing, I mean, which would be enough to pay the debt by the beginning of September of this year, so meaning we will be by the end of the year rise from the beginning of September the company with no debt and enough cash to maintain operations. No. This is why they do you ever coming one five is our main R&D expanding and extend and in addition.
Dror Bashan: Now, this is why PRX 115 is our main R&D expansion, and in addition, we will invest, I would say, in early research candidates to, you know, potentially address real unmet needs in blood disease, but, you know, the intent is not to go, I would say, above our capabilities at this moment, of course, because we want to keep the company solid and stable. We enjoy three streams of revenues. We assume the ones to Chiesi will gradually grow, and we are pretty confident. Of course, we trust Chiesi, and we think they do a very good job, so gradually, this will grow and will enable us to be, I would say, financially stronger.
Speaker Change: And we will invest I would say early research.
Speaker Change: Debates.
Speaker Change: Two.
And you know potentially address unmet needs in disease, but you know the intent is no.
Speaker Change: To go I would say about our R&D capabilities at this moment of course.
Speaker Change: Because we want to keep the company solely been stable we enjoy a three streams of revenues we assumed the ones do gears you will gradually.
Speaker Change: Pretty much confident of course.
Speaker Change: We trust you seem to be doing very good job, so granularly decent growth and we need to enable us to be I would say financially stronger.
John D. Vandermosten: Got it. And then looking at the cash flow statement, there was an increase in contracts liability that added to your cash, positive cash flow from operations. And I was wondering if you could give us, give me a clue. And maybe it was obvious, I just missed it. But what that was related to on that contracts liability.
Speaker Change: Got it and then looking at the cash flow statement. There was a there was an increase in contracts liability that added to your cash.
Speaker Change: Positive cash flow from operations and I was wondering if you could give us a give me a clue and maybe it was obvious I just missed it but what that was related to on that contract's liability.
Eyal Rubin: Yeah, so as I mentioned a couple of times in the past, our sales to Chiesi are based on ADA projections, and as Dror mentioned, we feel, believe, and we see evidence that they're doing a good job in terms of penetration. But the orders that they're placing, obviously, depending on their levels of inventory and the timing of release of the batches, as you all know, Chiesi is also the fill- So the increase in contractual obligations is batches that basically Chiesi is releasing now, but they have already paid for, and it's going to go, obviously, into revenues in the next quarter or two.
Speaker Change: Yeah, So as I mentioned, a couple of times in the past.
Speaker Change: I sell speakeasy are based on a projection and as Joe mentioned we.
Speaker Change: Believe and we see this as a.
Speaker Change: Good job in terms of penetration, but the orders did that pudding, obviously, depending on their levels of inventory and the timing.
The release of the batches as you all know he is he's also the fill and finish exactly a contractor.
Speaker Change: So the increase in contractual obligation is batches.
Speaker Change: Acyclic kids eat a releasing now but they've already paid for it.
Speaker Change: And it's Gonna go way Odyssey into revenues in the next quarter or two.
Eyal Rubin: We didn't record the revenues there, but the cash is there. Obviously, cash doesn't grow on trees, but the fact that the crash grew, as you mentioned, on contractual obligations means that they keep on selling. And as Dror mentioned, gradually, we believe that they're going to take a significant market share and position themselves in a very strong and meaningful way.
Speaker Change: Yeah. So we didn't have quite the revenues there, but they are the cashier there obviously catch doesn't grow the trees.
Speaker Change: The fact that the crash grew as you mentioned and contractual obligations means that they are they keep on selling where we could sell it to them and they are as Joe mentioned gradually to leave it there.
Speaker Change: It takes a significant market share and position themselves.
Speaker Change: We are very strong and meaningful way.
John D. Vandermosten: Great, very good. And last question regarding the RISE study in Japan. You know, I know you're not conducting that, but I was wondering if Keyes had given you any indication on when a BLA might be submitted to the Japanese authorities.
Speaker Change: Great very good and last question regarding the the rise study in Japan, you know I know you're not conducting that but I was wondering if kids you had good given you any indication on when a BLA might be submitted to the Japanese authorities.
Dror Bashan: I don't have the details, Eyal, maybe you do, but as far as I know, the study is ongoing.
Speaker Change: Hey, I don't say it.
Speaker Change: I don't have the details maybe you have as far as I know the study is ongoing.
Eyal Rubin: Yeah, the study is ongoing. Obviously, we have the data; we know how many patients were obviously enrolled. But since it's KV proprietary data, obviously, we're not allowed to share it.
Speaker Change: Yes, the studies I'm going obviously, we have the data.
Speaker Change: We know how many patients we're aware obviously enrolled a change it's a yeah kidney proprietary data honestly when I loved Sherri yeah. They are working as I mentioned and I mentioned, a couple of times, we see the progress and to see their seriousness in terms of the trials that we're conducting the robustness of the programs and obviously the e-commerce.
Eyal Rubin: They are working, as Dror mentioned, and I mentioned a couple of times. We see the progress, and we see their seriousness in terms of the trials that they are conducting, the robustness of the programs, and, obviously, the commercial operations on the ground, both in the US and outside the US. So, as soon as they complete the study, they'll probably announce or allow us to announce the VLA submission. Okay, great.
Speaker Change: Operations on the ground both in they are in the U S and outside the U S. Yeah. So as soon as they are then complete the study.
Speaker Change: Really announced yet will allow us to announce.
Speaker Change: L a submission in Japan.
John D. Vandermosten: Okay, great. And is Kesey already selling some rare disease products in Japanese markets?
Speaker Change: Great and is that he is you're already selling some rare disease products in Japanese market.
Speaker Change: Okay.
John D. Vandermosten: I don't control that, I'm sorry. Dr. Justin Marchegiani I know they got a bunch of different products that I just– yeah, I hadn't thought to– thought to look at that. Look that up.
Speaker Change: They don't control the I'm, sorry, and I know they got.
Speaker Change: A bunch of different products that I, just yeah, I I haven't thought to start to look at that look that up but alright, well. Thank you guys. Appreciate the responses to my questions take care. Thank you.
John D. Vandermosten: But alright, well, thank you guys. I appreciate the responses to my questions. Take care.
Speaker Change: Thank you. Thank you.
Operator: Thank you. At this time, there are no additional questions. I will hand the floor back to management for any further remarks.
Speaker Change: Thank you at this time there are no additional questions I will hand, the floor back to management for any further remarks.
Speaker Change: Yeah.
Dror Bashan: So all I ask is again thank you for your time. And actually, we look forward to updating you on the next development of the companies, [inaudible] later this year in August. So thank you very much, and that's it.
Speaker Change: So I'll also say thank you again for the time.
Speaker Change: Hmm.
Speaker Change: Naturally we will look forward to updating you on the next development of the company's in Skokie, Illinois.
Speaker Change: Well at least at the next earnings.
And this year in August.
Speaker Change: Thank you very much and then that's it.
Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: Thank you. This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.