Protalix BioTherapeutics, Inc. (PLX) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha - Virtual Best Ideas Spring Investment Conference 2025. The next presenting company is Protalix BioTherapeutics. [Operator Instructions] I'd now like to turn the floor over to today's host, Dror Bashan, Chief Executive Officer of Protalix BioTherapeutics. Sir, the floor is yours.

Thank you. And thank you, everybody, for joining us for today. I would like to tell you the story of Protalix, and we will leave some time for questions by the end. So here we start. So Protalix is a biotherapeutics company based in Israel. Protalix was established about 30 years ago. I'm sorry, it doesn't -- I can't see that I can succeed and move the slides one after the other. Is there any technical assistance on the call, please? Is there any technical assistance on the call?

There will be a slight delay when moving your slides.

Okay. Let's start from -- we'll try to continue and move on. I'll start with telling you some highlights about Protalix. Protalix was established about 30 years ago. We are based in Israel. Protalix was established based on the unique technology, where we can express complex human proteins through plant cells in suspension. We have about 220 employees, including biological manufacturing line, R&D and other related department that support the activity. As of today, Protalix has 2 approved drugs. One is Elelyso, which is our first product that was approved already in 2012 by the FDA. It's a product that is approved for Gaucher disease. And the second product was approved in May of 2023, which is Elfabrio. Elfabrio is approved both by the EMA and the FDA, again, in May of 2023. Overall, Protalix, you can assume is in, I would say, development of genetic rare disease drugs in the last couple of decades, especially in the last 15, 20 years. We have a clinical validated platform, we call it ProCellEx. This is, I would say, the platform where we can express those proteins through our unique technology. It's unique as this is the only one as far as we are familiar that can express complex human proteins through plant cells in suspension, approved by multiple agencies, authority agencies worldwide, including the FDA, EMA and other markets, of course. We have three strong partnerships. Chiesi is our global commercial partner for Elfabrio for Fabry drug. They hold 100% of commercial rights globally. Pfizer is our strategic partner for Elelyso. This is the first drug that was approved. They hold -- they are the global commercial rights holder, except Brazil. In Brazil, we have direct presence. We have a license from the government, and we work with the governmental agency called Fiocruz. And actually, we market direct Elelyso in Brazil through a team of [indiscernible], which is on the ground. Clearly, we have a strong clinical and regulatory expertise along the years in biologics and especially lysosomal and rare genetic diseases, both in clinical development and regulatory affairs. We have also earlier-stage pipeline. PRX-115 is planned to enter into Phase II in refractory or in uncontrolled gout by the second half of this year. And in addition, we have PRX-119, which is right now under preclinical, and we are planning to finalize the indication choice during 2025 and update the market, of course. And in addition, we are looking for earlier-stage programs and technologies to add to our platform. About Elelyso. Elelyso is the drug for Gaucher disease. Gaucher is a rare lysosomal disease, one in about 40,000 people. The product was approved by the FDA already in 2012. It is marketed and approved in about 23 markets worldwide. We sell directly to -- we sell directly in Brazil for about $12 million, $13 million a year. We have about 25% market share. We also sell to Pfizer, of course, and they market it through their presence globally. As for Fabry. Fabry, as I mentioned, was approved for Fabry disease for adult patients, which have Fabry disease already in May of 2023. It's another rare lysosomal storage disease, again, approved by the EMA, by the FDA and other regulatory authorities worldwide. And actually, as we speak, more and more markets are joining with approval and for investment of this drug. Fabry is an indication of about $2.2 billion, expected to reach by the end of the decade, around $3 billion, $3.1 billion in sales. And Chiesi is our -- as I mentioned, is our global commercial partner, and we are highly pleased with their performance and the way they look seriously and put a lot of effort both on the medical and the commercial fronts. And we think that it is realistic to estimate that they will capture a significant market share, which is about 15% to 20% of the market. And under these numbers, potentially, we are entitled for $120 million to $150 million in royalties every year. In addition to that, per the agreement, we are entitled to commercial and regulatory milestones as well. So actually, when we look into the, I would say, next years to come, next 5 years, we see that Chiesi will gradually penetrate into the market. We think they do well, and we expect them to do even better. So we will gradually get stronger, I would say, royalty stream and milestones and Protalix will grow, I would say, steadily in the future. In Fabry today, there are additional two enzymes in addition to Elfabrio, Fabrazyme and Replagal, both are administered once in two weeks like us. Fabrazyme is approved worldwide. Replagal is approved outside the U.S. and Galafold is a chaperone technology, was approved actually in 2016 and '18 -- 2016 in the EU and 2018 in the U.S., and it is approved globally as well. Our next product is PRX-115. PRX-115 was -- actually is for, I would say, refractory gout. Actually, this is the more severe stage of the gout population. We have actually finalized Phase I with good results. We have shown that we -- and we published actually this -- the outcomes of this study with 8 different cohorts. We have seen, I would say, gradually lowering the uric acid in a significant way as we went up with the dosing regimen. And you can see here in a minute. So the Phase I was a single ascending dose. We went up from cohort #1 to cohort #8. The product is safe and tolerable. We have looked into PK and PD endpoints. And you can see here in the graph the way the study scheduled for each of the patients. I will jump to the main conclusion, if it's okay. This is the profile of the pharmacokinetics of PRX-115. Actually, we have seen the PRX-115 exist in the plasma throughout 85 days of follow-up with 48 subjects with hyperuricemia. And you can see here the lowering graphs along the time, but still by day 85, we still see a plasma concentration of the drug. This is the pharmacodynamics results, actually just in a different view, actually, 6 milligram per deciliter is the bar. So we need to be below 6 milligram per deciliter. And actually, you've seen as we go higher with the dose, we have more and more days that we are below the 6 milligram per deciliter bar. Okay. So what we have seen on the safety and immunogenicity, we see favorable tolerability profile. On the PK/PD side, we see increase in the dose-dependent manner. And as I mentioned, detectable PRX-115 levels were observed in the plasma up to 12 weeks from subjects in cohort 6, 7 and 8, which are the higher dose cohorts. There was a rapid reduction of the plasma uric acid levels to way below 6, if I may say. And we have seen that this reduction of plasma uric acid occurred in dose-dependent manner and lasted beyond 4 weeks. Right now, as we're moving on, as I mentioned earlier, we are planning and under, I would say, intense preparation ahead of Phase II, which will be initiated by the second half of this year. The overall market is big. KRYSTEXXA sales, which is the main drug, which is approved for refractory gout patients, so well above the $1 billion. So we think the addressable market going into the future is significant. And hopefully, if indeed Phase II will mimic the Phase I results, we have a potential drug to address to the market. Overall, Protalix from a corporate strategy point of view, we went through a strategic process in the last, I would say, 2 years. And indeed, we combined between our unique platform, which is ProCellEx and selected priority indication that we have identified through a very long process. We have fine-tuned our research strategy. And I believe we are all geared into the next stage of growth, where we will add more meat around the bones, more additional programs and technologies into the pipeline, both to the ProCellEx platform and also per indication in selected renal indications. This is how we view the future. Two years ago, we got approved from second drug of Elfabrio, which gets into the market, and we are pleased with, I would say, the penetration and the acceptance of the product. In the next few years, we will focus into earlier-stage programs between, I would say, discover preclinical to Phase II. And once -- and if indeed, this will be -- this will mature successfully, we can move to the next stage. From a financial point of view, we have just reported just recently that as of December 31, 2024, we sit on something close to $35 million in cash. We have paid our debt in September 1, 2024. So actually, the company is debt-free, which is significant for us. We have three revenues -- three main streams of revenues. One is from sales to Chiesi, one is to Pfizer and the third one is to Brazil. We have an ATM, which is active, if I may say, operated. Revenues for 2024 were $53 million. Again, no debt. We have no warrants, which is, I would say, strengthening our balance sheet, of course. We have three main partnerships, and we have fine-tuned our strategy in the R&D. So we believe that Protalix today is a stable company. It's tuned to grow. And we believe that gradually, we will add more and more significance to the company and to the shareholders. So this is in a nutshell about Protalix. I will now open the line for questions.

So I will ask -- I will start with the first one. The first one is about Chiesi royalty stream, which is based on their revenues, of course. We mentioned in the last call that we expect to be under the current performance of clearly, of course, and this is our anticipation. We cannot assure that. But from what we see, there's a good likelihood that we will exceed the $100 million by 2030. We see that Chiesi gets into more and more markets. We see that where they are in the U.S. and in the EU across the different markets, they are penetrating, and they are doing well. They invest heavily in medical programs. We have a Japanese study ongoing. There is a pediatric study, both in the EU and the EMA to expand the label. There is a registry for the human study that is ongoing. And Chiesi, as we published by December of 2024, submitted an application to the EMA for additional regimen, which is once in 4 weeks. If -- so far, the process is ongoing. We don't see at present any red flags. But again, it has to be approved, of course. If approved, it will be around October of 2025, which is about 6, 7 months from today. So we have -- this could be a major upside if approved. Anyhow, we see a high likelihood that Chiesi will sell -- will gradually increase their sales and presence in the different markets. And therefore, we expect to receive by 2030 $100 million and more from royalties. The second question, how do we plan to expand Elfabrio market share in the Fabry disease space? So I think I have answered that. Chiesi invest, I would say, heavily in medical, both in Japan, in conducting a pediatric study globally, pregnant woman study and the once in 4 weeks. And I think all of this together in addition to certain research studies that are, as we speak, being executed across the world, will increase the awareness, the education and, of course, the merit of our brand. Any potential, if I may say, generic risk to your core asset in order to do a biological -- both our biological products in order to have a biologic or biosimilar approved, someone needs to establish the exact same facility as ProCellEx, which means it cannot be through mammalian. It's a different regulatory path, if I may say. Also, currently, it's a smaller, I would say, revenues. But going forward, even if it goes up, we believe that it is a very, very high hurdle to have a biosimilar for our products. And I think it's a low likelihood, let's put this way, even in the future. Why the ATM, what you use the additional cash for. Right now, it's -- what we have announced, I want to be careful that we have a new ATM plan. We don't want to be without it at all. We do not expect -- and I would like to highlight, we do not expect to raise significant amounts of money in the near future. We sit on certain cash. We have certain proceeds that we expect from Chiesi, Brazil and Pfizer. So we are not looking right now in the near future to raise any significant amount of money through a pipe or secondary or through the ATM. If there will be a specific opportunity that comes out, we will reconsider. But currently, we will use it, if any, very cautiously. And everybody can look in the last 2, 3 years, the amount of money that we have raised in the last 3 years are pretty small. So I think I'm done with the questions unless -- oh, there are more. Yes, please. The question is, can you talk about the sales model with Chiesi? I believe you said on your call, you could not provide any review guidance due to the model. So Chiesi is a private company. The problem is not in the model, and there is no problem actually. Chiesi is a private company. The rare disease business is based in Boston. Chiesi as a group sells about $3 billion in sales. It's a big company, it's a significant one. Elfabrio is a priority at Chiesi, and they put a lot of focus and efforts in multiple aspects. However, since they are private, they prefer to not share the number of patients, sales estimate or progress. And therefore, we cannot share as well with the market. We do say, I think, very often that we are pleased with their execution, and we think that the picture at Chiesi overall is very, very good. And Protalix is entitled to 15% to 40% royalties from sales -- from net sales in the U.S. and 15% to 35% from net sales outside the U.S., and in addition, milestones -- regulatory and commercial milestones. So we cannot -- unfortunately, we cannot share guidance to the market for the next, I don't know, a year or 2 years or 3 years. We do believe that what we said, and I mentioned just earlier that within 3 to 5 year...

That concludes the Protalix BioTherapeutics presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.