Analyst Conference Summary


Protalix Biotherapeutics

conference date: November 8, 2017 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2017 (Q3, third quarter 2017)

Forward-looking statements

Overview: Cash position improved, pipeline continues to develop.

Basic data (GAAP):

Revenue was $7.5 million, down 18% sequentially from $9.2 million, and up 60% from $4.7 million year-earlier.

Net income was negative $11.4 million, up sequentially from negative $58.7 million, and down from negative $7.3 million year-earlier.

EPS was negative $0.09, up sequentially from negative $0.47, and down from negative $0.7 year-earlier.


Chiesi agreement extends the cash runway into 2020. That excludes any future milestone payments from Chiesi or increase in income, or new partnerships.

Conference Highlights:

Moshe Manor, Protalix’s CEO, said “We are no longer facing any debt issue or financing overhang.  Moreover, with the recent strategic collaboration with Chiesi, not only did we secure a strong, experienced clinical and commercial partner, but we also meaningfully increased our capital resources, providing us with sufficient cash into 2020, irrespective of any milestone payments we are entitled to from Chiesi, increased revenues or from future partnerships.  In addition, on the strategic front, we now have three novel and clinically differentiated product candidates in the clinic with potentially superior efficacy which provides us multiple shots at goal to realize significant value for our stockholders.”

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. In October the ex-U.S. rights were sold to Chiesi Farmaceutici S.p.A, with Protalix to receive $25 million upfront, an additional up to $25 million in development costs and an additional up to $320 million in potential regulatory and commercial milestone payments. If commercialized Protalix to receive tiered royalties ranging from 15% to 35% on net sales

For PRX-110, Alidornase alfa, for Cystic Fibrosis, positive Phase 2 results were reported at a conference in June. A presentation was also made at the North American Cystic Fibrosis conference in November.

OPRX-106, an oral anti-TNF for ulcerative colitis Phase 2 results expected in early 2018, a slight delay.

In Q3 shipped order for $3.0 million from Brazil for Alfataliglicerase for Gaucher disease. The first shipment under this order for $3.6 million was completed in June. A purchase order was received for Q4 and into 2018.

Cash balance ended at $33.5 million, down $1 million sequentially from $34.5 million. After the quarter ended received $25 million from Chiesi. $59.5 million in convertible notes due in 2021 are outstanding, plus a $4.3 million promissory note. Accounts receivable rose to $7.3 million, but accounts payable rose to $20.5 million.

Cost of revenue was $6.1 million, leaving gross profit of $1.5 million. R&D (net of grants) expense $6.4 million. SG&A $2.8 million. Leaving an operating loss of $7.8 million. Financial expense $3.7 million, financial income $0 million.


Chiesi specific territories covered? All ex-US. Israel market is not a big one for the disease.

Chiesi's orphan disease infrastructure? They sell about $2 billion of products annually. They have a presence in most of the countries they are gaining rights to. There are some requirements for Chiesi to deploy sufficient means to get meaningful market share in their territories.

Chiesi's support of PRX-102 development costs? They will contribute about 50%.

Convertible notes due in 2018? No announcement yet. But it should not be a big challenge.

Brazil expectations? It is challenging to get exact timing of shipments. Relationships are intact, some Brazil ministers should visit us in Israel later this month. It will be challenging to get the full $24 million into 2017. The revenue from the coming shipment is likely to slip into 2018.

PRX-110 discussions, US rights? Everything is on the table, a global deal may make more sense.

COGS run rate? The more revenue we get from Brazil, the higher our margins are.

Amortization of $25 million from Chiesi? We are looking at the accounting, there have been recent accounting announcements that may apply.

PRX-110 development timeline? We just filed for the CF Foundation grant. When we know the size of the grant, and our partner, we will continue development.

Anti-TNF PRX-106, plans after results come out in 2018? We have people waiting to see the results. Then end of enrollment announcement should come soon, and it is an 8 week study. This could be huge if the results are positive. It is also a question of choosing which indication to proceed with.

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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