Analyst Conference Summary


Protalix Biotherapeutics

conference date: August 9, 2017 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2017 (Q2, second quarter 2017)

Forward-looking statements

Overview: Revenue ramped rapidly y/y, but so did costs, so waiting for more clinical trial data.

Basic data (GAAP):

Revenue was $9.2 million, up sequentially from $2.9 million, and up from $2.4 million year-earlier.

Net income was negative $58.7 million, up sequentially from negative $59.1 million, and down from negative $19.5 million year-earlier.

EPS was negative $0.47, up sequentially from negative $0.48, and down from negative $0.20 year-earlier.


Cash runway should last into 2019.

Conference Highlights:

Moshe Manor, Protalix’s CEO, said "Substantial progress was made across all three of our clinical assets in the second quarter, including active enrollment in all Fabry trials, nearing the end of enrollment for our PRX-106 trial and progress with our interactions with the CF Foundation. Recently, we executed a $10 million debt financing to counter balance a similar amount of cash paid out to settle conversions of our 7.50% convertible notes.  In addition, we refinanced $9 million principal amount of our 4.50% convertible notes due September 2018 into $8.55 million of new 4.50% convertible notes due February 2022.  These transactions solidify our cash position into 2019.”

For PRX-102, Pegunigalsidase alfa, for Fabry disease Phase 3 studies continued enrollment, with completion expected in 2017. 12-month interim data analysis expected in 2H 2018. It is a 24 month study. [See PRX-102 press release for details] In addition the Bright study initiated its first site in August. All of the patients in the Balance study that switched to pegunigalsidase alfa from Fabrazyme have demonstrated excellent tolerability. An increasing number of patients in the study have been moved to home care therapy following successful initial infusion periods. Becoming increasingly confident that PRX-102 can become the Fabry disease therapy of choice.

The FDA approved the commercial manufacturing facility for pegunigalsidase alfa and taliglucerase alfa.

For PRX-110, Alidornase alfa, for Cystic Fibrosis, positive Phase 2 results were reported at a conference in June. Demonstrated a mean absolute increase in the percent predicted expiratory volume of 3.4 points from baseline and a mean increase in ppFEV1 of 3.3 points from last inhalation of Pulmozyme. The last few patients patients pulled the average response down; this should not be interpreted as meaning a decrease in efficacy over time. The Cystic Fibrosis Foundation invited Protalix to apply for a grant to support development. We are also talking to potential partners.

OPRX-106, an oral anti-TNF for ulcerative colitis Phase 2 completed enrollment, with full results expected near year-end 2017.

In March received a purchase order for $24.3 million from Brazil for Alfataliglicerase for Gaucher disease. The first shipment under this order for $3.6 million was completed in June, followed by a $1.3 million shipment in July, with another $2.2 million scheduled for later this quarter (Q3).

Cash balance ended at $34.5 million, down $13.5 sequentially from $48.0 million. $53.6 million in convertible notes due in 2021 are outstanding, plus a $4.3 million promissory note. Company should be funded through data readouts. In July added $10 million cash from debt. Explained if all convertible notes would amount to 85 million shares; that would be positive as debt would be converted to equity.

Cost of revenue was $7.6 million, leaving gross profit of $7.6 million. R&D (net of grants) expense $13.5 million. SG&A $5.4 million. Leaving an operating loss of $17.2 million. Financial expense $5.1 million, financial income $1.7 million. Loss from change in fair value of convertible notes embedded derivative $38.1 million.

Does not expect any non-cash charges from the notes or derivatives going forward.


PRX-110 timeline for late stage comparator trial for CF? We are discussing this with regulatory agencies and our medical advisory board, and with possible partners.

PRX-102 competitor NDA submission? We think this shows the FDA will be open to looking at our interim analysis. That will give us a robust set of data to take to the FDA to see how we should proceed.

Cost of 102 trials? $40 million, all the way through approval.

Were shipments to Pfizer high this quarter? We are building up inventory. We sell it to Pfizer, but buy back packaged product for shipping to Brazil. The COGS are higher because our shipments to Pfizer are essentially at cost.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2017 William P. Meyers