Analyst Conference Summary


Protalix Biotherapeutics

conference date: November 7, 2018 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

Forward-looking statements

Overview: Continues pipeline development and discussions with possible partners. Revenue down dramatically y/y.

Basic data (GAAP):

Revenue was $0.7 million, down 65% sequentially from $2.0 million, and down 91% from $16.8 million year-earlier. The $25 million received from Chiesi was deferred.

Net income was negative $15.5 million, down sequentially from negative $11.3 million, and down from $11.4 million year-earlier.

EPS was negative $0.10, down sequentially from negative $0.08, and down from $0.09 year-earlier.



Conference Highlights:

Moshe Manor, Protalix’s CEO, said "In the third quarter we achieved two important milestone events for pegunigalsidase alfa, or PRX-102, our differentiated enzyme replacement therapy in development for the treatment of Fabry disease. First, we expanded our partnership with Chiesi Farmaceutici S.p.A. to include exclusive rights to commercialize and develop PRX-102 in the United States, which significantly strengthened our financial position. Second, we reported positive preliminary results from our BRIDGE study on key kidney function. Based on the promising preliminary BRIDGE study results, and taking into account the newly issued guidance from the U.S. Food and Drug Administration (FDA), we plan to engage with the FDA during the first half of 2019 to discuss the most optimal regulatory path forward for PRX-102. While we continue to enroll patients in all of our currently ongoing Fabry disease studies, we believe that with over 110 Fabry patients enrolled across the studies included in our PRX-102 clinical program to date, we have a sufficient number of patients for expedited review, including filing an application for accelerated approval,"

Revenue is generated by taliglucerase alfa sales. Lower shipments to Brazil and to Pfizer were the reason for the revenue decline. The $25 million received from Chiesi was deferred.

For PRX-102, Pegunigalsidase alfa, for Fabry disease Phase 3 studies continued enrollment, with completion expected in 2018. Phase 3 preliminary data was presented in Q3 2018. Phase 3 12-month interim data analysis expected in 1H 2019 and complete data in 2H 2019. It is a 24 month study. [See PRX-102 press release for details] U.S. rights were sold to Chiesi Farmaceutici S.p.A., which had already bought ex-U.S. rights. PRX-102 received Fast Track designation in the U.S. and Orphan Drug designation in the EU. In July the FDA issued a draft guidelines on enzyme replacement therapies that might help the chances of PRX-102 for approval. Will discuss regulatory path with FDA in 2019, but believes already has sufficient patients for expedited review.

For PRX-110, Alidornase alfa, for Cystic Fibrosis, the foundation grant is still under review. In active discussions with potential partners.

OPRX-106, an oral anti-TNF for ulcerative colitis Phase 2 top line results were positive. 67% of patients experienced a clinical response. Partnership discussions have begun. Data was presented at a meeting in June. In discussions with portential partners.

An oral version of Humira is being worked on, no timeline for moving to clinical trials.

Cash balance ended at $41.9 million, up sequentially from $28.3 million. Received $25 million from Chiesi as an upfront payment, which was not recorded as revenue. After the quarter ended exchanged 4.50% convertible notes for a combination of shares and cash, and effectively discharged the remainder of the 4.50% notes. But there are still the 2021 notes.

Believes has funding into 2020 using present cash only. R&D expense will be reduced as Chiesi assumes responsibility.

Cost of revenue was $1.9 million, leaving gross profit of negative $1.3 million. R&D (net of grants) expense $10.1 million. SG&A $2.6 million. Leaving an operating loss of $14.0 million. Financial expense $1.8 million, financial income $0.2 million.

Q&A summary:

Bridge analysis, is it similar to final endpoint from Balance trial? Bridge looked at switching from the comparator drug. In Balance study is looking at the comparison of the slopes from the drugs.

106 study? No plan yet for the next 106 trial.

Brazil shipments? We recorded no revenue in Q3 to Brazil, but have a shipment ready to go out.


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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 2018 William P. Meyers