NYSE:PLX
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First Quarter 2024 Financial and Operational Review
Protalix Biotherapeutics, Inc. (NYSE:PLX) announced first quarter 2024 financial and operational results in a May 10th, 2024 press release and in the filing of Form 10-Q. The reports were followed by a conference call which discussed recent achievements, regulatory updates and financial performance. Since the beginning of the year, with respect to Elfabrio (PRX-102) partner Chiesi has continued its commercialization activities, obtained additional approvals and launched new studies for a pediatric indication and for approval in Japan.
Revenues for 1Q:24 were $3.7 million, which consisted almost entirely of product sales which produced a net loss of ($4.6) million or ($0.06) per share.
Financial results for the quarter ending March 31st, 2024, compared to prior year comparable period:
➢ Revenues were $3.7 million, down 61% from $9.6 million on lower revenues from both Pfizer and Brazil. Research and development revenues were also down sharply as responsibility for further development and commercialization of Elfabrio has shifted to Chiesi;
➢ Cost of revenue was down 16% to $2.6 million reflecting the decline in sales to Pfizer and Brazil. Gross margin was 29%; however, we note that there are many moving parts in this number and gross margin excludes previously recognized costs that will be recognized in future batches of product;
➢ Research and development expenses fell 51% to $2.9 million from $5.8 million. Completion of the Fabry clinical program and related regulatory efforts in 2023 led to the decline. These expenditures were partially offset by spending on the PRX-115, PRX-119 and other early-stage research and development programs;
➢ Selling, general and administrative expenses were flat at $3.1 million for both measurement periods;
➢ Net financial income was $123,000 compared to a net financial expense of ($477,000) due to higher interest income on bank deposits and lower notes interest expense related to notes conversions executed in 2023;
➢ Income tax benefit of $138,000 compares to income tax expense of ($195,000);
➢ Net loss was ($4.6) million vs ($3.1) million, or ($0.06) per share versus ($0.05) per share;
The cash and equivalents balance on March 31, 2024 totaled $48.5 million versus $44.6 million at the end of 2023. The increase was mostly attributable to cash payments from Chiesi for product not yet released which was not offset by operating expenses. Free cash flow was $3.6 million for 1Q:24. There was no cash from financing. 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. Following the end of the quarter, Protalix announced receipt of $3.7 million from partners for Elelyso sales.
PRX-102 Activity
Following US and EU approval of Elfabrio in May of last year, the compound was further approved in Great Britain and Switzerland during the third quarter of 2023. Along with the full year report for 2023, Protalix announced that Elfabrio had also been approved in Israel. Chesi’s regulatory efforts have been successful and the partner is looking forward to other geographies and populations for further penetration of the PEGylated recombinant human α-Galactosidase-A enzyme. As disclosed in regulatory filings, Chesi has begun the FLY study in collaboration with Protalix to assess the safety of Elfabrio in pediatric patients. While it is still in the start-up stage, the study will be a multi-center, open label trial to assess the safety, pharmacodynamics, efficacy and pharmacokinetics of Elfabrio in patients from two years to less than 18 years of age with confirmed Fabry disease to obtain a pediatric indication in the United States. Chiesi has also begun to enroll its RISE study which aims to enroll 18-20 Fabry patients in Japan. This type of study is required to bridge results to a population with a different genetic makeup and to accommodate different medical practices. RISE is expected to be complete in 2028.
PRX-115
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. Now that almost a year has passed, Protalix has enrolled 56 patients and anticipates publishing the preliminary results from the trial in 2Q:24. 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 enrolled 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.
In conjunction with the report of first quarter 2024 results, Protalix announced that it will pursue an eighth cohort to its Phase I trial and begin planning for a Phase II study. Seven cohorts have been completed and 42 subjects were treated with PRX-115 and 14 with placebo.
Protalix felt that the results observed so far in the first seven cohorts were sufficiently positive to expand the study by adding an eighth cohort of eight new subjects. Cohort 8 will analyze a higher dose and its potential to result in increased exposure time. Conclusions from the PK and PD study are that exposure to PRX-115:
➢ Increased drug systemically in a dose dependent manner;
➢ Reduced plasma uric acid concentrations to below 6.0 mg/dL over time;
➢ Was dose dependent on uric acid concentrations in the plasma;
➢ Was well tolerated.
26% or 11 of 42 subjects treated with PRX-115 reported a drug-related adverse event (AE), with the majority of the events being mild to moderate. One subject in cohort 2 experienced anaphylactic reaction after infusion with PRX-115, which was fully resolved. There were no other serious AEs in the trial and no AEs reported in the highest doses in cohorts 6 and 7. Protalix hopes to have a competitive product that will be superior to other leading products in the market in terms of side effects and frequency of administration.
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