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spk04: Good morning, ladies and gentlemen, and welcome to the ProTalex first quarter 2022 financial and business results conference call. If anyone should need operator assistance during the conference, please press star one on your telephone keypad. As a reminder, this conference call is being recorded. I will now turn the conference over to your host, Alexandra Schumann of LifeSci Advisors, Investor Relations for ProTalex. You may begin your conference.
spk01: Thank you, Operator, and welcome to the Protallix Biotherapeutics First Quarter 2022 Financial Results and Business Update Conference Call. With me today are Jorah Bashan, President and CEO of Protallix, and Eyal Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the results and the update was issued this morning and is available now on the Protallix website. Please take a moment to read the disclaimer about forward-looking statements in the press release. The earnings release 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 the statements made. Factors that could cause actual results to differ are described in the disclaimer and in Portalex's filings with the United States Securities and Exchange Commission. I will now turn the call over to Mr. Dror Bashan. Dror?
spk05: Thank you, Alexandra. and welcome everyone to our first quarter 2022 financial results and business update course. I will begin with a review of our progress and accomplishments over the first quarter, along with our plans for the coming month. Following my remarks, Eyal will provide a more detailed review of our financial results. We will then open the line for questions, of course. Let me begin with a summary of the positive top-line results announced in April from our phase three balanced clinical trial of PRX102 for the treatment of Fabry disease in adults. We were very pleased to report that the trial successfully met its primary endpoint and that the data showed a favorable tolerability immunogenicity profile for PRX102. We plan to provide a final analysis of the balanced study in the third quarter of this year after we have completed all analysis and discussions of the collected data. At our KOL event, which also took place in April, Dr. David Warnock from the University of Alabama at Birmingham described the balance study, the top-line results of the balance study, and our next steps. He also provided an overview of the $2 billion market, Fabry market, described the need for additional therapies and the potential of PRX102 to meet a significant unmet need of the Fabry community patients. The company, together with its development and collaboration partner, Chiasi Global Rare Disease, or Chiasi, currently plan to resubmit a biological license application, or a BLA, to the FDA in the second half of this year, and continues to be on track to achieve that goal. It is intended that the BLA package will include the positive results from the company's three phase three clinical trials, the BALANCE Bridge and the BRIDE studies, And of course, the COMPANY Phase 1-2 study, which was conducted before. As announced last October, after the COMPANY and Chiesi participated in a Type A end-of-review meeting with the FDA, the COMPANY and Chiesi gained clarity on the pathway for approval. The COMPANY believed that it has a compelling and consistent data set from both treatment-naive and enzyme replacement therapy, experienced patients for inclusion, in the BLA resubmission. In Europe, we submitted the Marketing Authorization Agreement, or MAA, for the PRX-102 with European Medicine Agency, or EMA, on February 7, 2022, which was subsequently validated by the EMA. We believe Portalix is starting a transitional period. The robust data from the three Phase III studies demonstrating the potential of PRX-102 to be a good treatment for patients with Fabry disease. We have full in-house manufacturing capabilities, a commercialization plan with our global partner, Kiesi, and a clear pathway toward the anticipated approval of PRX-102. Additionally, we have a pipeline of existing early-stage programs that we will be highlighting as the progress in development. Our strategy is to continue investing in new product candidates to support our goal of becoming a global commercial world-class biopharmaceutical company. Finally, our balance sheet provides us with sufficient cash runway until Q3 of 2023, enough to support our plans for resubmission and potential approval, in addition to the continuing to develop our early-stage pipelines. We continue advancing our early-stage pipeline and will share the progress made once available. I will now turn to Eyal to review our financial results. Eyal, please go ahead.
spk02: Thank you, Jor. And thank you, everyone, for joining today's call. Let me review our first quarter of 2022 financials. For the quarter ended March 31, 2022, we recorded revenues from selling of goods of $9 million, an increase of $4.5 million, or 100%, compared to revenues of 4.5 million for the same period of 2021. Revenues from license and R&D services for the quarter ended March 31st, 2022 were 7.1 million compared to 6.8 for the quarter ended March 31st, 2021. Revenues from license and R&D services represent the revenues the company recognized in connection with its license and supply agreements with Chiesi. Cost of goods sold was $6 million for the three months ended March 31, 2021, an increase of $1.2 million, or 25%, versus $4.8 million for the same period last year. The increase in cost of goods sold was primarily the result of higher sales. Research and development expenses for the three months ended March 31, 2021, were $8.8 million, an increase of $1.7 million, or 24%, compared to $7.1 million for the same period last year. The increase is primarily the result of subcontractors' costs related to the completion of the company's Phase III clinical trials of PRX-102 and maintaining the company's related extension studies. Selling general administrative expenses were $3.2 million for the three months ended March 31, 2022, and increased of 0.1 million or 3% versus 3.1 million for the same period last year. Financial expenses net were 0.4 million for the three months ended March 31st, 2022, a decrease of 1.4 million or 78% compared to 1.8 for the same period last year. The decrease resulted primarily from lower interest and debt amortization costs due to a decrease in the total principal amount of the company's outstanding notes. In the August 2021 exchange transaction, the company exchanged an aggregate principal amount of 57.92 million of the 2021 notes for cash and an aggregate principal amount of 28.75 million of newly issued 2024 notes, effectively cutting the debt by about 50%. As of March 31st, 2022, our cash, cash equivalents and short-term bank deposits were approximately 32.9 million compared to 39 million as of December 31st, 2021. We believe that our current financial position provides us with sufficient cash runway through the third quarter of 2023. I will now turn the call back to you, Jor.
spk05: Thank you, Eyal. So thank you, everyone, for joining us on today's call. We look forward to the BHA submission in the U.S., hearing from the EMA on the MAA submission in Europe, and working closely together with our partner, Chiesi, to successfully bring PRX1 or 2 to the market. We are extremely excited by the opportunity ahead of us and looking forward to bringing this important potential treatment option for adult patients with primary disease. Now, I will turn the call back to the operator and open the line for questions. Please.
spk04: Thank you. We will now be conducting 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 2. One moment, please, while we poll for your questions. Our first questions come from the line of John Vandermosen with DAX.
spk03: Please proceed with your questions. Thank you and good afternoon to Ronell. Hope you guys are doing well. I wanted to ask about the clock stop coming up pretty soon for the EMA submission. Does the EMA give any indication of things that they may ask prior to the clock stop or do you pretty much have to wait and see what they want to know?
spk05: We are waiting for the input.
spk03: Okay, very good. Another thing related to the EU, now that the UK has left the EU, what's the process there to get access to that market? I think I looked up and I saw that about 900 individuals that might benefit from PRX-102. Is there anything additional that needs to be done there, or are they still kind of hanging on in terms of accepting approvals by the EMA?
spk05: So, John, this topic i have to verify and get back to you you know maybe later today tomorrow okay i i think i know the answer but i prefer to answer you accurately okay if it's okay okay yeah no problem and i mean that's that's uh um i mean i i think they're in some kind of weird thing right now and i actually i don't even know uh myself kind of how yeah but it's a very good question john so but but i will i will get back to you shortly sounds good sounds good and um
spk03: Let's see. I think you probably touched on this a little bit. Is there anything that sticks out in your mind that needs to get done now that we're finished with the balanced trial for the FDA submission? I mean, I guess you're just compiling information and putting things together for that second half. Is there anything that sticks out in your mind that's particularly important there?
spk05: you know everything is important if I may say so indeed we are analyzing and finalizing the CSR of the balance looking at all four clinical trials you know back and forth including all the safety data we have many hundreds of years if I may say exposure on the drug which you know reflecting a very good safety profile so it's actually just to look if I may say, to connect the dots and see the full picture and, you know, strengthen the totality of the data, if I may say.
spk03: Okay. Last one for me is just a finance cash flow question. Y'all, can you explain the difference between the net loss and the cash from operations or the cash using operations and what that difference was attributable to?
spk02: Obviously, the net loss includes the depreciation, includes the non-cash, such as the share risk compensation. It's not transferred the one-for-one into the cash position. As we mentioned many times in the past, our quarterly net burn rate is approximately $6 million a quarter, and I think that if you run the numbers, that's where we are for the past two-plus years.
spk03: Oh, sure, sure, exactly. Okay. All right. Thank you so much. I appreciate it. That's all for me.
spk05: Thank you, John, and I will get back to you.
spk04: Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. There are no further questions at this time. And on behalf of Fortalex, this does conclude today's teleconference. We do appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
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