Q1 2025 Protalix BioTherapeutics Inc Earnings Call
[music].
John Vandermosten, Unknown Executive, Raghuram Selvaraju, Dror Bashan, Dror Bashan
Speaker Change: Good morning, ladies and gentlemen, and welcome to the ProTalix Biotherapeutics First Quarter 2025 Financial and Business Results Conference Call. As a reminder, this conference is being recorded. I will now turn the conference over to our host, Mike Moyer of Lifesci Advisors, Investor Relations for ProTalix. Thank you. Please go ahead.
Speaker Change: It was issued this morning and is available now on the for Calix website. Please take a moment to read the disclaimer on forward looking statements in the press release.
Speaker Change: The earnings release and this teleconference are 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 then pitofsky filings with the U S Securities and Exchange Commission I will now turn the call over to Mr. Michel <unk>.
Speaker Change: Sure.
Mike Moyer: Thank you Mike.
Speaker Change: And thank you everyone to joining for our first quarter of 2025, I'm, sorry results and business update call I will begin with reviewing our accomplishments over the quarter.
Speaker Change: Recent weeks following my remarks, I will provide a detailed review well following that as always and then we will open the line for your questions.
Speaker Change: With another solid quarter with an increase in revenues from selling goods compared to the same period last year.
Speaker Change: Given the promising results obtained in 2024 first in human study will follow God product candidates Gehrig's. One five we are focused on building on the momentum and working towards initiating a phase two clinical trial in patients with go take hold this year.
Speaker Change: At the same time, we continue to evaluate additional pipeline candidates for potential further development, including Pra's 119, as well as other early stage clinical assets.
Speaker Change: Hey, Al will discuss the details of all plain answer that humans in few minutes.
Speaker Change: And I would like to start with 115.
Speaker Change: Now we saw results for 2024, we completed all goes into first in human Phase one clinical trial will be Eric one wants likes it started involved a single dose of Parex one one.
Speaker Change: Five in subjects with elevated uric acid levels overall, Gary it's 115 exposures increased.
Speaker Change: A single dose of Prs 115 rapidly reduced plasma uric acid lapses, both in dose dependent manner.
Speaker Change: Both of them and dose dependent manner. So theyre encouraging results from these studies suggest a long acting effect and may enable us to potentially widen the dosing interval, which could enhance patients' compliance and treatment six weeks.
Speaker Change: I encourage you to check the publication section of our website, where we have uploaded opposed to what it was presented at the ACR contract.
Speaker Change: In November of 2020 before describing the results.
Speaker Change: We are excited to progress with the clinical development.
Speaker Change: It's 115 and it all goes.
Speaker Change: Well continue to be initiation of this phase two study in the second half of this year.
Speaker Change: I know turn towards <unk>.
Speaker Change: Last year, our commercial cloud the GSE Global road diseases contingent to trigger Cocos when it was probable and invest substantially in medical and commercial program last December and Kids you announced.
Speaker Change: And kids you announced them.
Speaker Change: I'm sorry.
Speaker Change: Cause you announced that the European medicines agency or EMA validated the variation submission for Big University that's awesome.
Speaker Change: This submission is to reduce the dosing frequency and the labor to be two milligram every four weeks. The currently approved doses one milligram per kg administered every two weeks. The application was supported by the revised population PK modeling and then your exposure response analyses for the clinical data from the previously completed.
Speaker Change: Bright phase III clinical studies as well as the related expansion extension study, we look forward to working closely with both the EMA throughout the review process and we expect to hear from you and me during the fourth quarter of this year.
Speaker Change: We continue to appreciate he is he's partnership and dedication to fabry disease patients and patient community.
Speaker Change: Our next pipeline candidate also expressed full prosthetics Crs 119.
Speaker Change: First one on I need a pegylated recombinant human he knows one candidate in development with the potential treatment of diseases associated with neutral feet extra cellular trips on it for clinical theatrics 119 remain ongoing.
Speaker Change: As we have been discussing throughout the past year, we have been focusing all of the athletes on early stage development assets to build our product development pipeline.
Speaker Change: This includes leveraging ultrasonics platform integration capabilities evaluating drug delivery system that may allow protective deliberate different modalities and focusing all therapeutic areas to arena related diseases.
Speaker Change: We will continue these efforts throughout 2025, and we hope to provide further updates as these programs become more mature.
Speaker Change: No let me say that I'm excited about our R&D default and we are laying the groundwork for future digital mix.
With that it is.
Speaker Change: No my pleasure to turn the call over to our yard to reveal all claims.
Speaker Change: Please go ahead.
Speaker Change: Thank you Dror and thank you everyone for joining today's call.
Speaker Change: I agree with you our first quarter 2025 financials.
Speaker Change: We recorded revenues from selling goods of $10 million. During the three months ended March 31st 2025, an increase of $6 3 million or 170%.
Speaker Change: Revenues of $3 7 million for three months ended March 31st 2024, Inc.
Speaker Change: English resulted primarily from an increase of $5 9 million says Pfizer and an increase of <unk> 4 million in sales to Santa Cruz and Brazil.
Speaker Change: We recorded revenues from license and R&D services.
Speaker Change: <unk> 1 million for three months ended March 31st 2025, and March 31 2024.
Speaker Change: Revenues from life and R&D services are comprised primarily of revenues, we recognized in connection with our license and supply agreement with kids.
Speaker Change: Going forward, we expect to generate minimum revenues from life 90 services other than potentially the Golar story milestone payments.
Speaker Change: Cost of goods sold was $8 2 million for the three months ended March 31st 2025, an increase of $5 6 million or 116%.
Speaker Change: Strong cost of goods sold of $2 6 million for the three months ended March 31st 2024.
Speaker Change: The increase in cost of goods sold was primarily the result of an increase in says the Pfizer and for your crews in Brazil.
Speaker Change: For the three months ended March 31st 2025, total research and development expenses were approximately $3 5 million comprised of approximately 1.8 million salaries and related expenses approximately $28 million of subcontractor delays it's expensive.
Speaker Change: So when you put $2 million of materials related expenses and approximately <unk> 7 million of other extent.
Speaker Change: For the three months ended March 31st 2024, our total research and development expenses were approximately $2 9 million comprised of approximately one 5 million of salaries and related expenses approximately $45 million stock contracted led an extensive approximately <unk> 2 million of material related expenses and approximately <unk> 7 million of other expense.
Speaker Change: Yeah.
Speaker Change: The increase in research and development expenses for the three months ended March 31st 2025 was $46 or 21% compared to the three months ended March 31 2024.
Speaker Change: The increase in research and development expenses resulted primarily from the advances in our clinical pipeline.
Speaker Change: Selling general and administrative expenses were $2 6 million for three months ended March 31st 2025, a decrease of <unk> 5 million or 16% compared to $2 1 million for three months ended March 31 2024.
Speaker Change: The decrease resulted primarily from a decrease of <unk> 4 million in salary expenses and a decrease of <unk> 1 million.
Speaker Change: Yeah.
Speaker Change: Financial income net was 24 million for the three months ended much 31st 2025 compared to financial income of the net net of <unk> 1 million for the three months ended March 31st 124.
Speaker Change: The difference resulted primarily from lower notes interest expenses due to the September 'twenty 'twenty four repayment in full of all of the outstanding principal on interest payable under the under our then outstanding kind of in a half percent senior secured promissory notes.
Partially offset by lower interest income on bank deposits and higher exchange rate cost.
Speaker Change: For the three months ended March.
Speaker Change: Each March 31st 2025, and March 31, 'twenty 'twenty four we recorded a tax benefit of approximately <unk> one.
Speaker Change: $1 million.
Speaker Change: But I'm gonna resulted primarily from deferred taxes on income mainly drivetrain guilty income mainly respective sexual once 84 of the U S tax cuts and jobs Act.
Speaker Change: Plenty of 17 or the D C J a.
Speaker Change: If I could in 2022 sexual 174, the T. J a requires all U S companies for tax purposes.
Speaker Change: To capitalize and subsequently amortize R&D expenses that fall within the scope of sexual once every four or five years for research activities conducted in the U S and over 15 years for research activities conducted I'll take that.
Speaker Change: I would say rather than deducting such cost in the current year.
Speaker Change: Cash cash equivalent and short term bank deposits were approximately $34 7 billion at March 31st 2025.
Speaker Change: Net loss for the quarter ended March 31st 2025, approximately $2 6 million or <unk>.
Speaker Change: Zero.
Speaker Change: Point, your five per share basic and diluted compared to $4 6 million or 0.0, $6 a share basic and dilutive for the same period in 2024.
Speaker Change: I will now turn the call back to usual.
Speaker Change: Thank you to conclude 2025 is off to a good start and promises to be exciting year for botox as we continue to build out the foundations for the future. We are excited to begin a phase two program for Parex 115 later this year.
Speaker Change: And we continue to make progress on all early stage R&D efforts I am confident.
Speaker Change: And in our strategy balance sheets and three streams of revenue will enable the next phase of pipeline development for Botox, we look forward to updating on updating you all know progress as we continue to drive innovation and create long term value for both patients and stockholders.
Speaker Change: No I would like to.
Speaker Change: To ask the operator to open the call for questions. Please.
Speaker Change: Thank you. The floor is now opened 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 the handset before pressing the starkey.
Speaker Change: Again, Thats Star one to register a question at this time.
Speaker Change: Our first question today is coming from John Benda Marston of Zacks. Please go ahead.
Speaker Change: Great. Thank you and how you doin' onshore anyhow, Oh, I'll sound like to start out with.
Speaker Change: Any visibility that you might have and then they'll fabry a milestone.
Speaker Change: You know I know in the past we've talked about that.
Speaker Change: And we've you know.
Speaker Change: Advanced a quarter since then and I was I wanted to know if we're at close to anything and what you have to say on that.
Speaker Change: All I can say I mean I.
Speaker Change: Let's discuss it multiple times and they can emphasize it today of course, it's very relevant it scares me say efforts and outcomes all strokes okay.
Speaker Change: Okay. The peso freak Workman of commercial patients is very good and the Basel exploitation expectations.
Speaker Change: And you know Protonic says as we discussed altogether. These inventory they'll go directly to the market managing the inventory does mostly reflecting the one to one with OXXO sales, which I think I emphasized and an extra day, though actually improving every quarter.
Speaker Change: He says you know what we can say he has he is a private company.
Speaker Change: We are obliged by the agreement will not deter specific numbers, but I say loudly.
Speaker Change: I hope clear, they're all doing very well and actually improving every quarter.
Speaker Change: Okay.
Speaker Change: And you mentioned on the call about the change in our dosing frequency.
Speaker Change: And in the E M a and in the EU is there any effort granted he made for a similar approach in United States and it took to getting that.
Speaker Change: They're saying here currently.
Speaker Change: First what we discussed is is an application, which gives you submitted okay. They come up to them do this is I hope it would be approved of course is ongoing we don't see any rate sled presence.
Speaker Change: So it's ongoing and we are encouraged.
Speaker Change: We say we go to the U S. Once there will be something to update you with the update of course.
Speaker Change: Okay and.
Speaker Change: And I was looking at the the list of medications for gout and you know I know we've talked about KRYSTEXXA KRYSTEXXA previously on on on these calls and in personnel and in our other meetings. I also noticed that there was novartis has allowed us out there and wanted to know how that fits into the and to the treatment of gout.
Speaker Change: We will know a more I would see a lift from the phase one we are very much encouraged from the outcomes of the phase one single dose.
Speaker Change: Once we initiate the phase II and then, especially once we have the top line results.
Speaker Change: No much much more with this is it.
Speaker Change: Well designed study a double blind.
Speaker Change: Yeah, Hi.
Speaker Change: I'd say statistical power, even very high it was discussed with the FDA. So if indeed it will be it will mimic what will be closed with the phase one results where potentially a very good also contains.
Speaker Change: Including you know way.
Speaker Change: At least what we see for now I want to be careful in future competition. You don't expect me to listen to these calls up to about the pool.
Speaker Change: Okay. Yeah, I know, it's indicated for a bunch of different things, including Coutts I Didnt know no no no no no complaints, but you know.
Speaker Change: So I cannot really subtle.
Speaker Change: No.
Speaker Change: Specific potential competition you know the market is.
Speaker Change: The pipeline is bigger than one program.
Speaker Change: Got it and final question for me is just on.
Speaker Change: On the options I think you had some options that were both close to exploration and close to their exercise price last quarter did those get cleared out or what was the disposition of that.
Speaker Change: Well I think if.
Speaker Change: Okay.
Speaker Change: Yes, sure John So John Thanks for the question the one that you're referring to.
Speaker Change: And from the.
Speaker Change: 2020, a pipe transaction they all expire at the other than a minimal amount you guys did disclose you obviously see the 10-Q.
Speaker Change: 908000 warrants were exercised all the rest.
Speaker Change: If I remember correctly 12.5.
Speaker Change: Sure.
Speaker Change: <unk> actually expired without being exercised.
Speaker Change: Okay very good. Thank you al Thank you Dror.
John: Thank you. Thank you John.
Speaker Change: Thank you. The next question is coming from Ben Axa C. D of parental Securities. Please go ahead.
John: Okay.
Speaker Change: Hello, Josh. Thank you for taking my questions and congrats on the continued progress that just a small questions on on the phase two trial planned in gout deals. So I'm not sure if I missed us on whether deals are planned to enroll our U S patients.
Speaker Change: And then the other question is more of a general what what other.
Speaker Change: Benefits could you.
Speaker Change: I kind of mentioned versus like with like so besides.
Speaker Change: The injection frequency.
Speaker Change: What else would you like the it's always worth highlighting and looking at thank you.
Speaker Change: So thank you for that so the answer for the first question, yes, the majority of the patients.
Speaker Change: He will be enrolled in the U S.
Speaker Change: And as for the second one.
Speaker Change: Yeah of course, it's this is the trend and to your second question beyond.
Speaker Change: The frequency, which is by the way very much important it will be significant.
Speaker Change: And we will need to see the outcomes in order to.
Speaker Change: To say that we have a better immunogenicity profile, while doing so you know we.
Speaker Change: Of course, we hope to have.
Speaker Change: Very good safety profile and a very good immunogenicity profile.
Speaker Change: Let's see the results.
Speaker Change: Certainly this is an incentive.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you. The next question is coming from Robert Rajiv of H C. Wainwright. Please go ahead.
Speaker Change: Hi, Good morning, drawing at all this is Dan on for Rob. Thanks for taking my question. So I guess just to start we are wondering and just to confirm as there's been a lot of recent changes in the FDA even more so.
Speaker Change: It's Tuesday.
Speaker Change: <unk> products are regulated by a theater in the U S right.
Speaker Change: And as far as I know.
Speaker Change: If I remember well and they can really look at it remember huh.
Speaker Change: What was the.
Speaker Change: Approved by the <unk>.
Speaker Change: Road disease Division.
Speaker Change: Got it okay.
Speaker Change: And then secondly can you discuss any effects with the planned U S. Pharmaceutical tariffs may have on cost of goods sold would those be booked when you sell the inventories or would you have an after sale agreement on that.
Speaker Change: Yes.
Speaker Change: Referring to this better than I do of course.
Speaker Change: Of course of course, so we're actually we're not selling to a to the U S. We are selling to kids need from our Syracuse The Italian company.
Speaker Change: So our relationship with key as he is basically a relationship between an Israeli company and Italian company taxes, but they are now in the news honestly I'm not going to impact our relationship with kidney with regards to the way the kids they are going to ship those trials.
Speaker Change: Yeah actually the vials fabry adviser to the year.
Speaker Change: Gonna be an intercompany transaction between two of the entities held by the same parent company. So I'm not even sure that that's going to impact them, but that is a question for them.
Speaker Change: Got it and kind of a follow up on that can you confirm it.
Speaker Change: He is he discussed any increase in the list price or plans to increase the list price of <unk> on the U S. In response to those there.
Speaker Change: The answer is no.
Speaker Change: As far as we know and again, it's not that we can share their pricing strategy, that's confidential and protect Saddam there the license agreement, but they are as far as we understand today.
Speaker Change: This is not part of the plan, yeah, but obviously might change.
Speaker Change: On the taxes.
Speaker Change: Beta testing in place.
Speaker Change: See how the how this impacts the passenger markets and I guess on the phone.
Speaker Change: So it's difficult to see today.
Speaker Change: What will be the change in the tariffs.
Speaker Change: It would be too volatile and the JV is a very you know well established company. They know what they're doing so I'm sure.
Speaker Change: We are in very good tenants like you know and very good commercial lines by the way.
Speaker Change: Got it thank you.
Speaker Change: Thank you. The next question is coming from Qatar.
Speaker Change: Buses have a private investor. Please go ahead.
Speaker Change: Thank you very much for taking my call gentlemen.
Speaker Change: You said in your statement this morning that.
Speaker Change: You expect minimal revenues going forward.
Speaker Change: On the R&D line item.
Speaker Change: Basically from TSA can you tell me what the approximate amount of the value of the contract left to be paid out by key assay is thank you.
Speaker Change: Yeah. So let me let me explain what I said, so research and development.
Speaker Change: The revenues that we recorded in the past were associated in connection with our license and R&D agreement with key as means to say that when they invested.
Speaker Change: In a flywheel back then so they funded part of the development costs. They put a down payment all of this all of this according to U S. GAAP has to be linearly.
Speaker Change: Divided along the years of the life of the agreement or the development. This is the reason that in past years. This line item was greater way greater than the minimal revenues. They were showing going forward. The only thing that will appear it's not going to be.
Speaker Change: A commercial milestones because definitely part of the sales, but only if they would go to microphone.
Speaker Change: Yeah, My phones, if I have to and again, that's a very.
Speaker Change: And it's a far estimate nobody knows there has to do with it once every two weeks once we fully since starting in the U S is a tool with once every four weeks in Europe. If approved if in the future would it be able to show superiority basically those are the regulatory milestones that are left.
Speaker Change: Oh, Yeah. So if you want me to quantify then there can be up to something like $75 million.
Speaker Change: But honestly I think as many of those would be a disappointment.
Speaker Change: A milestone by milestone and it depends on when and if we get it.
Speaker Change: If I could simply clarify you were saying that theres approximately 75 million left to pay out on the agreement with PSA.
Speaker Change: No that's not what I'm, saying I'm, saying that under this line item the research and development revenues and a 75 million potential milestones the global potential.
Speaker Change: The agreement, which includes commercial milestone and we go to lifestyle.
Speaker Change: Any number between I don't know up to a half a billion dollars.
Speaker Change: Since its all depends on their sales and when they hit their various thresholds in the various agreements.
Speaker Change: Remind everybody on the call and we're talking about two separate agreements ex U S and U S and watch them separately paid and accrued.
Speaker Change: So in theory. The overall, you know milestones to be paid can be potentially up to a half a billion dollars.
Speaker Change: Okay. Thank you very much I appreciate your answer.
Speaker Change: Youre welcome.
Thank you we're showing no further questions at this time I'd like to turn the floor back over to Mr. Beauchamp for closing comments.
Speaker Change: So thank you.
Speaker Change: Thank you everybody that joined the call I would like to emphasize again that.
Speaker Change: What we have said in the past as I mentioned KFC same store sales. If also strong peso for a quote most commercial patients is very good and that's beyond our expectations and photonics.
Speaker Change: Oh, two peers these inventories to actually manage the inventory and not directly to the market and beyond that we all focus on building the pipeline schools, we would initiate the phase two and go later this year. So we look forward to update you as the progress continues.
Speaker Change: 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.