Protalix BioTherapeutics, Inc.
Q1 2018 Earnings Call Transcript

Published: 9 May 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the Protalix BioTherapeutics First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a Q&A session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference Mr. Yossi Maimon, Chief Financial Officer, you may begin.

[Yossi Maimon:]

Thank you. Hello and actually good morning, everybody. Welcome to the Protalix BioTherapeutics first quarter earnings call. With me today is Moshe Manor, our President and CEO. A press release announcing the result is available on our website and a Form 10-Q will be filed later tonight. Please take a moment to read the disclaimer about forward-looking statements in the press release, the earnings release, and this teleconferencing group forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors could be -- could cause actual results to differ are described in the disclaimer and in our filing with the SEC. I will turn now the call over to Mr. Moshe Manor.

[Moshe Manor:]

Thank you Yossi. Good morning and thank you all for joining us this morning. I am happy to be here today to discuss the progress Protalix has made over the past quarter. During the call I will provide a corporate update and then turn the call over to Yossi to review the company's financials. Starting first with our lease program, Pegunigalsidase alfa or PRX-102 for the treatment of Fabry disease. We have continued to open additional clinical trial sites for the BALANCE, BRIDGE, and BRIGHT studies. Patient enrolment is currently ongoing in nearly 50 sites. Enrolment remains on track to be completed by year-end. With respect to the BALANCE study blood samples have been collected for certain patients as part of the screening process and then tested for presence of antidrug, antibodies and neutralizing activities and the course activity and inhibition of such antibodies to PRX-102. We are very encouraged by the initial read of such tests and are happy to report that European Renal Association has accepted the data for poster presentation that would be held on May 25th at the 55th European Dialysis and Transplant Association Congress in Denmark. Also during the first quarter we reported positive top line results from our Phase IIa trial of OPRX-106 for the treatment of ulcerative colitis. As you may recall, OPRX-106 is the plant cell-expressed recombinant anti-tumor necrosis factor alpha in development for oral administration. When administered orally and while passing through the digestive tract, the plant cells function as a natural delivery vehicle, having the unique attribute of a cellulose cell wall which makes them resistant to degradation compared to proteins produced via mammalian cell expression. The top line results demonstrated the key efficacy endpoints of the study were met with 67% of patients experiencing a clinical response; and 28% of patients experiencing a clinical remission. In addition other key efficacy endpoints were also achieved including 72% of patients showing an improvement in rectal bleeding scores; 72% of patients demonstrating an improvement in fecal calprotectin; and 61% of patients showing improved Geboes score which is histopathological scoring for the assessment of disease activity in ulcerative colitis. On top of that OPRX sounds to be biological active in the gut with no antidrug, antibody formation and no systemic absorption. This can potentially result in a Phase therapy and a long-term response. On the safety found, OPRX-106 was safe and well tolerated with only mild to moderate adverse events, which were transient in nature. A novel presentation detailing the patient by patient result has been accepted for presenting at the Digestive Disease Week at 2018 Annual Meeting in Washington DC which is being held June 2nd through the 5th. The presentation will include significant new clinical data which we believe further supports the consistent benefit of patients over various end point. I will now turn back the call to Yossi who would provide a financial overview.

[Yossi Maimon:]

Thanks Moshe. So for the first quarter ending March 31, 2018 Protalix reported a net loss of $9.4 million or $0.06 per share basic and diluted compared to a net loss of $8.4 million or $0.07 per share basic and diluted for the same period of 2017 which also included -- which actually excluded onetime cash charge of $52.3 million in connection with remeasurement of a derivative back in 2017. Protalix reported a total revenues of $4.6 million for the first quarter of 2018 compared to $2.9 million for the same period of 2017. The increase is attributed primarily to increases in sales of taliglucerase alpha in Brazil. Research and development expenses were $7.3 million for the first quarter of 2018 compared to $6 million for the same period of 2017. SG&A were $2.5 million for the first quarter of 2018 and 2017. As of March 31, 2018 we had $41.3 million in cash. We expect to realize the reduction in operating cash consumption going forward and mainly as the full effect of [indiscernible] R&D support will come into play. Lastly I just wanted to touch upon a concern we've been hearing around upcoming potential dilution and especially I guess that's due to the increasing authorized request, I want to be clear that currently we do not have any plans for going back to that in the near future and while we cannot guarantee of course we believe that the next inflow of funds into the company would come in non-dilutive manner which is still on target for happening in 2018. With that I will turn now the call to the operator who will open up the call for questions from the audience. Operator.

[Operator:]

[Operator Instructions]. And our first question comes from the line of Raghuram Selvaraju from H.C. Wainwright. Your line is now open.

[Raghuram Selvaraju:]

Hi, thanks very much for taking my questions. So I had two types of questions here. Firstly, with respect to the BALANCE, BRIDGE, and BRIGHT studies can you confirm that all of the clinical sites that were originally planned to have involved in these programs are up and running and open for enrollment or if you are still awaiting additional clinical stats to come online, if enrollment proceeds in a manner that is perhaps a little slower than you originally projected do you have the ability to bring additional clinical sites online and how much of a difference do you expect that to be likely to make in the event of enrollment being slower than expected? And then secondly with respect to the pipeline assets particularly 106 and DNase, can you give us perhaps some additional insights into strategic discussions that you may be having around these assets and what you anticipate might be a reasonable timeline for the conclusion of those kinds of for example out-licensing discussions? Thank you.

[Yossi Maimon:]

Thanks Raghuram, this is Yossi, I will try to tackle those one at a time. So I think in terms of the number of sites that we have envisioned so yes, I think all the sites are up and running, all of them are recruiting patients. Obviously I think that and maybe theoretically the more sites we will have, the more enrollments will come along but I think that we are satisfied with where it is today and it's relatively spread well outside the U.S. and actually global. So I think that on this strong I think that we are set as even with more stuff that we envision initially. In terms of the pipeline I think that as we mentioned and Moshe specifically just mentioned now I think that we're going to have a very interesting opportunity to discuss in more detail and with new significant clinical data around the 106 in the DDW Conference which is about a month from now. I think that there's going to be a decent amount of new clinical information that is going to be relevant that I believe will further support the consistency of the efficacy that we have seen in patients throughout the different end points that we have looked including new ones that we will share. And also across almost all patients as we will share detail per patient results as well. I think it's too early to say and I think we've been talking about it for too long about executing this. All I would say and I want to refrain from saying exactly when, there's a lot of interest but I want to be careful this time not to over promise, we want to over execute. So I'll leave it at that, there's interest. I don’t want to go into more details than that.

[Raghuram Selvaraju:]

Okay, thank you very much.

[Yossi Maimon:]

Sure.

[Operator:]

And our next question comes from Peter Welford from Jefferies. Your line is now open.

[Peter Welford:]

Hi, yes thanks for taking my questions. I have got a couple; firstly just on Brazil and I know it's a difficult topic to predict anything but after the pivotal -- to the first quarter I wonder if you can give us any sort of update in terms of the orders that you are seeing or shipments and how we should think about Brazil? Going on then to just the data from 102, are you still -- the expression of use is unlikely to be any new doubts from the PRX-102 trials during this year, and it is more likely to be mid 2019 before we see any data? And then just on partnerships, I totally understand you don't want to provide any details at this stage but can you just perhaps call it easy compare 110 to 106 and are there any additional data set that you need or would like to get in house either preclinical or clinical before you can finalize discussions or do you think now you are to post those programs all the data you have are available to proceed and close potentially a deal? Thank you.

[Yossi Maimon:]

Okay Peter so I will start with Brazil, then I think we want to be very tough about saying anything about it. All I can say is that we do see an increasing number of patients on our drug, period full stop. That's a fact and that we can say. How will that and in a significant manner, I don't have the exact numbers but I would say it's a significant increase from going from one quarter to another. When will that be translated into shipments we still don't know as it's very -- the visibility is low and it remains that way. I guess that's just the way it works in Brazil at least that's our experience. But we do see that we have more patients on the drug that's all we can say and I want to be careful what I say more beyond that. And this is very good indication but I think we will be a more excited to see that translated into dollars. In terms of a readout for 102 I think in 2019 -- we don't expect to have any data in 2018. I think that we will start reporting and often enrollment for each of these trials in 2018 but data will be in 2019. Although as Moshe indicated now and also in the press release we will have interesting data from patients that have been screened for the BALANCE study, about presence of antibodies for long-term patients on Fabrazyme. The level of neutralizing antibodies and then how will these -- how these basically have reacted when introduced to 102. I think that has been a question a lot of people were wondering and I think that we are excited to share more data in less than a month. I think it is three weeks away. In terms of partnerships, I think that we basically have all -- completed all trials that we want to have. I think that again with 106 data, full data to be disclosed in the DDW in June, I think then it will be kind of the opening shot for everybody to kind of have a deeper look into the data. And I think that this is when we will have more in-depth discussions around these assets at least. So short answer is yes, I think we're done.

[Moshe Manor:]

And just Peter, this is Moshe, just to complete, on the 106 definitely we have the data including the preclinical and other lab data and we are continuing to analyze that. But those data is additional data that will further support the overall concept in 106. On 102 I think what we just said and we released the data as I was saying in two weeks on the course of activity, that's an important factor. And what we can say at this point of time is that this data has released false [ph] notion of bringing a superior product to the market over the existing ERT. So that's really in a good direction what we are expecting clinically as well.

[Peter Welford:]

That's great, Thank you.

[Operator:]

And at this time I am showing no further questions. I would like to turn the call back over to Yossi Maimon for any closing remarks.

[Moshe Manor:]

Hi, this is Moshe. So thank you all for joining us on the call this morning and we look forward in just few short weeks to share with you the clinical data presentation both on PRX-102 and OPRX-106 that will be presented at the European Renal Association - European Dialysis and Transplant Association Congress and Digestive Disease Week Conference. The data will be announced publicly around the same time it is being presented at the conference. We will also post the presentations and the poster on our website for you to review. And with that I would like to thank you all for your continued support and have a great day. Thank you.

[Operator:]

Ladies and gentlemen, thank you for participation in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.