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spk01: Good morning, ladies and gentlemen, and welcome to Protallix Biotherapeutics Fiscal Year 2020 Earnings Conference Call. As a reminder, this conference call is being recorded. I will now turn the conference over to our host, Mr. David Holmes of Lifesize Advisor Investor Relations. You may begin your conference, sir. Please proceed.
spk04: Thank you, operator. Welcome to Protallix Biotherapeutics Fiscal Year 2020 Financial Results and Business Update Conference Call. With me today are Dora Bichon, President and Chief Executive Officer of Portales, and E.L. Rubin, Chief Financial Officer. A press release announcing the results and the update was issued this morning and is available now on the Portales website. Please take a moment to read the disclaimer about forward-looking statements in the press release. The earnings released and this teleconference include forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in Cortellix's filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Mr. Dror Basham. Dror?
spk03: Thank you, David. and welcome everyone to the company's year end of 2020 financial results and business updates. During today's call, I will review the progress of our key clinical programs and lay out the roadmap of our upcoming strategic milestones. Following my remarks, our CFO, Jan Rubin, will review our financial results, and we will then open the line for questions. This year brought many challenges, including, of course, the unexpected global pandemic. However, we have achieved many significant accomplishments throughout all of these, and we have continued that positive momentum in the first part of 2021. Together with our development and commercialization part of PSE, we submitted to the U.S. FDA a BLA for PRX102 for the treatment of adult patients with fibroid disease, and we look forward for the FDA's response. We continue to build of the clinical profile for PRX102 with the release of key data from the Bridge and the Bright Phase III study. And we look forward to seeing the interim data from the balance study during the second quarter of this year. We further advanced our earlier stage pipeline of candidates produced for our Procellex, our property plant cell-based protein expression system. And earlier this year, we strengthened our balances through a public offering and through the sale of shares under our ATM program. Overall, I am very proud of our employees and our external partners for their unwavering commitment to advance our mission to bring differentiated therapeutics to the market to help address unmet medical needs. Please let me now provide some more details regarding our key achievements and upcoming anticipated milestones. Our lead pipeline candidate is Peggy Humigals, who does Alpha. or PRX102, which is a therapeutic protein candidate for the treatment of Fabry disease. Fabry is a rare genetic disease that occurs in one of every 40,000 people. And most experts agree that there are many undiagnosed patients suffering from this disease. The current therapeutic market for Fabry disease consists mainly of enzyme replacement therapies and is forecasted to be around $1.9 billion in 2021 and continue to grow at the cage of approximately 9.5%. As I mentioned earlier, the FDA accepted the BLA filing for PRX102 for the treatment of Fabry disease and granted the BLA priority review. The original PDUFA action date of January 27th of 2021 was subsequently adjusted by the FDA to April 27th, 2021. We and Chiesi have remained in active dialogue with the FDA And as indicated in the BLA filing communication letter last fall, the FDA does not plan to hold an advisory committee meeting to discuss the application. If indeed we receive an approval letter, Protalix and Casey will be ready for a commercial launch of PRX-102 later this year. We continue to build our clinical profile for 102. As a result, a release from our comprehensive phase three clinical program, which is composed of three studies. the BRIDGE, the BRIDE, and the BANAN studies. Last December, we released final results from the 12-month BRIDGE-FRED3 open-label single-arm switch-over trial of up to 22 Fabry patients who were previously treated with Agalcidas-alpha or Eclogal. The data shows substantial improvement in renal function as measured by mean annualized EGFR in both male and female patients who were switched from Agalcidas alfa to PEG-Unigalcidas alfa. The final results from the BRIDGE trial were presented in greater detail in the annual World Symposium this past February. Last month, we have announced positive top-line results from the BRIDE Phase III 12-month open-label switchover study designed to evaluate the safety, efficacy, and pharmacokinetics of PEG-Unigalcidas alfa, two milligram per kilogram administered every four weeks. for the treatment of Fabry disease in Fabry patients, previously treated with commercially available enzyme replacement therapy for at least three years, and on a stable dose administered every two weeks. Topline results indicate the two milligram per kilogram of PRX-102 administered by intravenous infusion every four weeks was found to be well tolerated among treated patients, and stable clinical presentation was maintained in adult Fabry patients following the 12-month protocol period. This presents potential for an additional treatment regimen, one that is considerably more convenient for patients without compromising safety and efficacy. The lead study in our phase three program is a balanced trial, which is a 24-month trial evaluating the safety and efficacy of PEG-1-alpha, one milligram per kilogram dose, every two weeks, and assessing its effects in Fabry patients with declining renal function versus the current used enzyme replacement therapy, Fabrazyme. We expect to receive interim results from the trial in the next quarter, which would then serve as a basis for the European EMA filing. If these trial results are positive, there is a potential for a commercial launch in Europe in the late of 2022 or the first half of 2023. Turning to our early pipeline programs, we continue to work with CellComEd USA to develop Alidromis Alpha or PRX110, which is produced via our Procelec system for the use in the treatment of any human respiratory disease or condition, including but not limited to sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled deliveries. We recently announced an exclusive partnership with Sarkomed USA to evaluate therapeutic candidates for these disease areas via in-health delivery. We look forward to continuing to develop this partnership, and we'll update you on our clinical plans. We are performing preclinical testing of PRX115, our plant cell express recombinant pegylated uricase, a chemically modified enzyme under development for the potential treatment of refractory gout. Gout is the most common inflammatory arthritis in the United States, affecting an estimated 9.2 million adults. An estimated approximately 2% of the gout population is thought to have chronic refractory disease. The uricase enzyme converts uric acids to elimination, which is easily eliminated through urine. However, the uricase enzyme does not exist naturally in the urine. We use prosthetics to express and optimize recombinant uricase enzyme under development for the potential treatment of refractory gout, which we are designing to have an improved half-life, reduce immunogenicity, and potentially longer-term efficacy. We have also began developing or developed of PRX119, or plant cell express pegylated recombinant human DNA1 product candidate, which we are designing to have an elongated half-life in the circulation for the potential treatment of NET-related diseases, NET, or neutrophil extracellular traps, a web-like structure released by activated neutrophils that trap and kill a variety of microorganisms. According to scientific literature, animal studies have demonstrated that DNAS1 treatment reduces net toxicity. Our property modified DNAS1 may potentially enable effective treatment of acute and chronic conditions. We are planning to commence Phase I clinical trials of both PRX115 and PRX119 throughout 2022. Turning to our balance sheet, we ended the year with $38.5 million in cash, cash equivalents, and short-term bank deposits, and we raised an additional approximately $40 million gross proceeds in public equity offering in the first quarter of 2021. We also raised $8.8 million through the sale of common stock under our ATM program during the first quarter of 2021. Eyal will provide more commentary regarding our cash flow plans, but I would like to add that we feel confident about our balance sheet and are appreciative of the support we have received from our existing and new added institutional stockholders. Before I turn it to Eyal, I just wish to recognize what a challenging time this was for all of us and restate how proud I am of our team for their focus and commitment We did not allow this global pandemic to have a material adverse effect on our operations. We are looking forward to an exciting year ahead of Portalix and all of our teammates and partners. Let me turn it to Eyal for a review of our financials. Thank you.
spk05: Thank you, George, and thank you, everyone, for joining today's call. Let me review our full year 2020 financials. For the year ended December 31, 2020, we recorded revenues from selling goods of $16.2 million compared to revenues of $15.8 million for the same period of 2019. Revenues from licensed and R&D services for the year ended December 31, 2020 were $46.7 million compared to $38.8 million for the year ended December 31, 2019. Revenues from license agreement represent the revenues we recognize in conjunction with the KIEZ agreement. The increase is primarily due to the revenue recognizing connection with an updated cost estimation of the two completed phase three clinical trials of PRX-102 as mentioned previously. Cost of goods sold was 10.9 million for the years ended December 31st, 2020 and 2019. Research and development expenses net for the year end of December 31, 2020 were $38.2 million, compared to $44.6 million for the year end of December 31, 2019. The decrease is primarily due to the completion of two out of the three Phase III clinical trials of PRX-102 and reduced costs related to the Phase III balance study, as well as a decrease in costs related to manufacturing of our drug in development as some of the manufactured drug products and related costs have been recorded as inventory. We expect research and development expenses to continue to be our primary expense as we enter into a more advanced stage of preclinical and clinical trials for certain of our product candidates as Jor described previously. Selling general administrative expenses were $11.1 million for the year ended December 31, 2020, an increase versus $9.9 million for the year ended December 31st, 2019. The interest resulted primarily from an increase in share-based compensation costs. Financial net expenses were $9.2 million for the year ended December 31st, 2020, compared to $7.6 million for the same period in 2019, primarily related to the costs in connection with the senior secured notes. As of December 31st, 2020, our cash, cash equivalents, and short and bank deposits were approximately $38.5 million compared to approximately $18 million on December 31st, 2019. In March 2020, as you probably all remember, we completed a $43.7 million private placement offering of common stock and warrants. This past February, we raised an additional approximately $40 million in gross proceeds via an equity offering, and we raised an additional $8.8 million through our APM during the first quarter of 2021. There are $58 million of convertible notes on our balance sheet that could potentially be redeemed this November. We believe that our current financial position provides us a sufficient cash runway through the second quarter of 2022. I will now turn the call back to you, Jor.
spk03: Thank you, Yael. We believe we are well positioned for success, and as we look ahead towards an anticipated commercial product launch with a solid financial base to support growth and a pipeline of potential opportunities. We look forward to updating you as the year progresses, and let's now please take your questions.
spk01: Thank you. At this time, we will conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 to ask a question at this time. One moment while we poll for our first question. Our first question comes from Ram Seljuru with HC Wainwright. Please proceed.
spk02: Hi, this is Bubalan dialing in for Ram Seljuru. Thanks for taking my question. So I'd like to first get your thoughts on LLISO sales performance in 2020 and what are your expectations for 2021? Yeah, you would like to take it?
spk03: Sure.
spk05: Sure. So the sales that appears on our financials are mostly related to the ELISA. We talk about the $16 million in connection with our sales both to Pfizer and in Brazil. We believe that 2021 is going to be approximately in the same neighborhood, maybe a little better, a little stronger. But given the pandemic in Brazil, we expect that the number is going to remain quite the same and the same for Pfizer.
spk02: All right, great. So with respect to PRX102, I believe the pitiful date is approaching. So what are your expectations on that? And if the drug is approved by the FDA, what elements could feature in your messaging to patients and physicians?
spk03: As far as we know, things are progressing as we updated. Our current PDUFA date is April 27th, and hopefully once we get approval, we will launch shortly after. I hope that we will be able to release in the next few weeks or few months the final results of the BRIDE study, the ones in four weeks, and clearly to publish the the outcomes of the interim analysis during Q2 of the balance study, which will hopefully, if positive, will pave the way for submission to the European Union.
spk05: Hello?
spk02: Hi, can you hear me? Yes, of course. All right, okay. I thought the line went off a little bit. And what can you comment on regarding the launch preparation activities for PRX-102? And when can we learn more about the pricing information? Do you think PRX-102 will be priced premium over FabriZone?
spk03: I suggest we wait until we have approval, and then we will discuss with our partner and share with the market post-approval. I can assure you that preparations are... Actually, everything is set and we are ready to go, including the team, the marketing, sales, medical, et cetera, and, of course, final product to the market.
spk02: All right, one final from me. Can you comment on the market opportunity for moderate to severe pulmonary sarcoidosis?
spk03: So... This is a very interesting indication. There is unmet need. There are not too many drugs right now developed or approved for this specific indication. So if indeed things will go well and indeed this product will be further developed at approval, we estimate a big market which probably will consist of many hundreds of millions of dollars. I speak about years ahead, so it's difficult to focus if it will cross the billion dollars or not right now.
spk02: That's it from me. Thanks so much for your time.
spk03: You're welcome.
spk01: Once again, ladies and gentlemen, to ask a question, please press star 1 on your telephone keypad. Our next question comes from John Mandermosten with Zacks Investments. Please proceed.
spk06: Hello, everyone, and thanks for taking my question. Let me start off with just a question on the implications of the BRITE study. How might you go about modifying or talking with the FDA about modifying the label for a different dosing periodicity for that? Is that something that you're planning, or how should we think about that opportunity?
spk03: So the outcomes of the BRITE study are not, or the BRITE study is not part of the DLA that was submitted. So post-approval, we plan to submit a clinical supplement.
spk06: Okay. Very good. And, you know, what might the timing be on that? Would it be in the next six months or so, assuming a favorable April 27th outcome?
spk03: You know, I don't want to commit. I hope it will be until year-end, but I don't control the timetable right now. Okay. I assume it will be wiser in about a month or two from today.
spk06: Okay. And for PRX110, inhaled delivery seems like a very interesting approach. And I'm wondering if there are other opportunities for inhaled delivery, perhaps nasal administration or something like that, that has some benefits for certain indications. Is that something that you may pursue?
spk03: At present, all inhaled indications are with Salkomat of PRX110. I want to be very careful. So, you know, this is the situation right now. We are developing an elongated DMAS-1 for NETS-related diseases, as I mentioned, but this is a different category, if I may say.
spk06: Okay. Yeah, it seems like an interesting opportunity, but obviously we're kind of in the early stages for that. Last question for me is on the FDA, and I think you made a mention of this, just the FDA inspections. I've been trying to get a sense of how those have been going and wondered if you had any anecdotal observations on the FDA inspecting anywhere, even in the United States, or just how that is going along, because I know that's a key issue for everyone, pretty much, who's waiting on a PDUFA date.
spk03: So, indeed, it's a key. I don't have a general view on what's going on in the U.S. I can assure that one thing, we will have official updates we will share with the market, of course.
spk06: Okay. Thank you, Dora. Appreciate it.
spk03: You're welcome.
spk01: Once again, ladies and gentlemen, to ask a question, that's star 1 on your telephone keypad. There are no further questions in queue at this time. I would like to turn the call back over to management for closing comments.
spk03: So this is Braul speaking. I just ask to thank everybody for the time and participation in this call, and I wish everybody, you know, to be healthy and safe, and good luck. Thank you very much.
spk01: Thank you, ladies and gentlemen. This does conclude today's teleconference. You may disconnect your lines at this time, and have a great day.
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