Third Quarter 2023 Financial and Operational Review
Protalix Biotherapeutics, Inc. (NYSE:PLX) announced 3Q:23 financial and operational results in a November 6th, 2023 press release and filing of Form 10-Q. The reports were followed by a conference call which discussed recent achievements, regulatory updates and financial performance. Since the end of the second quarter, company management and stakeholders have participated in investor and scientific conferences, a new Chairman of the Board of Directors has been appointed, and Protalix’ partner, Chiesi Rare Disease, has continued to ramp up Elfabrio sales and obtain approval in additional jurisdictions.
Revenues for 3Q:23 were $10.3 million, which consisted of $5.5 million from Chiesi, $2.3 million from Fiocruz and $2.3 million in revenues from Pfizer. This produced a net loss of ($1.9) million in the most recent quarter versus a net loss of ($3.6) million in 3Q:22.
Financial results for the quarter ending September 30, 2023, compared to prior year comparable period:
➢ Revenues were $10.3 million, down 27% from $14.2 million; as lower license and R&D revenues were only partially offset by an increase in product revenues. Pfizer sales were down 49% to $3.4 million, Fiocruz sales were up 36% to $2.3 million and Chiesi sales were up 116% to $5.5 million;
➢ Cost of revenue was down 31% to $4.9 million as higher gross margin from Elfabrio more than offset lower Elelyso margins and sales from lower margin Elelyso declined. This mix produced a 52% gross margin on goods sold which surpassed the 20% gross margin in the comparison period;
➢ Research and development expenses fell 50% to $3.7 million from $7.4 million. Substantial reductions in subcontractor related expenses were partially offset by a slight rise in salary and related expenses. Materials and other expenses were relatively stable;
➢ Selling, general and administrative expenses rose 29% to $3.7 million vs $2.8 million. The increase was related to higher salary and related expenses due to one-time cash bonuses;
➢ Net financial income was $0.2 million compared to a net financial expense of ($0.4) million due greater contributions from interest income;
➢ Income taxes of $0.1 million compare to nil;
➢ Net loss was ($1.9) million vs ($3.6) million, or ($0.02) per share versus ($0.07) per share;
Cash and equivalents balance on September 30, 2023 totaled $41.0 million versus $22.2 million at the end of 2022. Cash burn was ($5.9) million for the first nine months of the year. Financing cash flows were $10.4 million predominantly related to proceeds from issuance of common stock through an at-the-market (ATM) facility. Other cash contributions came from the $20 million milestone paid by Chiesi. We do not anticipate the need to raise capital in at least the next 12 months and perhaps for a substantially longer period depending on Elfabrio’s growth trajectory.
Appointment of New Chairman
Protalix announced the appointment of a new Chairman of its Board of Directors, Dr. Eliot Richard Forster. Dr. Forster serves on other boards as well including that of Avacta Group, Immatics NV and Ochre Bio. He was previously CEO of F-Star Therapeutics which was acquired by inovoX in March 2023. He has also been CEO of Immunocure, Creabilis and Solace Pharmaceuticals. Dr. Forster’s big pharma background includes Pfizer and GlaxoWellcome.
Dr. Forster replaces Zeev Bronfeld who had served as Chairman of Protalix’ board since August 2019. Mr. Bronfeld had served as a director of Protalix since 1996 and will retire as Dr. Forster assumes the post.
Scientific Presentations & Publications
During the third quarter of 2023 and to date, Protalix team members and related parties contributed to publications and presented data related to the Elfabrio (pegunigalsidate alfa) trials. In late August, the journal Genetics in Medicine published an article disclosing six-year results from the Phase I/II clinical trial of Elfabrio. Its title is “Long-term safety and efficacy of pegunigalsidase alfa: A multicenter 6-year study in adult patients with Fabry disease.” The article was authored by Dr. Derralynn Hughes of University College London in London, who served as a principal investigator in PRX-102 clinical trials.
Protalix’ Vice President, Research & Development, Yael Hayon, Ph.D., gave a presentation at the Next Generation Protein Therapeutics Summit in Boston. The event was held at the Boston Convention and Exhibition Center from September 18th to 20th.
In March 2023, Protalix announced that it had dosed its first patient in the Phase I clinical trial for PRX-115 in the treatment of severe gout. The trial is designed as a double-blind, placebo-controlled, single ascending dose study intended to evaluate the safety and pharmacokinetics, pharmacodynamics and immunogenicity of PRX-115. Subjects considered for enrollment will present elevated uric acid levels (>6.0 mg/dL) and no previous exposure to PEGylated uricase. The single ascending dose study will have up to seven cohorts with patients randomized 3:1 to receive a single intravenous dose of PRX-115 or placebo. Other secondary endpoints will examine the reduction in uric acid and dosing efficacy. The study is being conducted at New Zealand Clinical Research under the New Zealand Medicines and Medical Devices Safety Authority. Further details on the clinical trial can be found on clinicaltrials.gov and the related entry under NCT05745727.
As of early November, and announced on the conference call, 42 subjects have been dosed in the trial and a total of 56 subjects are expected to be enrolled.1 The trial is slated to be complete by early 2024. Final results are anticipated in mid-2024.
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1. Note that the press release and Form 10-K report that 32 participants were enrolled as of September 30, 2023.