Protalix BioTherapeutics Reports 2018 Second Quarter Results and Provides Corporate Update
August 09 2018 - 7:00AM
Protalix BioTherapeutics, Inc. (NYSE American:PLX, TASE:PLX), a
biopharmaceutical company focused on the development and
commercialization of recombinant therapeutic proteins expressed
through its proprietary plant cell-based expression system,
ProCellEx®, today announced its financial results for the six-month
period ended June 30, 2018 and provided a corporate update.
"This has been a fantastic quarter for the company highlighted
by the expansion of our partnership with Chiesi that resulted from
the strong relationship developed over the past months,” commented
Moshe Manor, Protalix’s President and Chief Executive
Officer. “Additionally, we believe that the recent draft
guidelines from the U.S. Food and Drug Administration, or the FDA,
released in July regarding enzyme replacement therapies could
significantly benefit the regulatory path forward for PRX-102.”
2018 Second Quarter and Recent Clinical
Highlights
- Expanded partnership with Chiesi Farmaceutici S.p.A., or
Chiesi, to include exclusive U.S. rights for the development and
commercialization of PRX-102. Terms of the agreement include
an up-front payment of $25 million, up to $20 million in
development costs, up to $760 million, in the aggregate, in
regulatory and commercial milestone payments and tiered royalties
ranging from 15 to 40%.
- In July, the FDA issued a draft guideline “Slowly Progressive,
Low-Prevalence Rare Diseases with Substrate Deposition that Results
from Single Enzyme Defects: Providing Evidence of Effectiveness for
Replacement or Corrective Therapies”. The draft guideline
recognizes the challenges in achieving clinical evidence in rare,
slow progressing diseases and provides additional preclinical and
clinical results that may be acceptable to the FDA in its
consideration for accelerated approval. The Company is
reviewing the draft guidelines to determine how they might apply to
the Company’s Fabry clinical development program.
- With the additional cash from Chiesi, the Company is funded
through read-outs of all clinical trials of PRX-102.
- Presented data at the Digestive Disease Week® (DDW) 2018 Annual
Meeting on OPRX-106, which showed mucosal improvement in 61% of
patients, mucosal healing in 33% of patients and clinical responses
in 67% of patients.
- Exchanged 4.50% convertible notes for a combination of shares
and cash, and effectively discharged the remainder of the 4.50%
notes.
Financial Results for the Six Months ended June 30,
2018
- The Company reported a net loss of $20.7 million, or $0.14
per share, basic and diluted for the six-month period ended
June 30, 2018 compared to a net loss of $20.6 million, or
$0.16 per share, basic and diluted, excluding a one-time, non-cash
net charge of $38.1 million in connection with the remeasurement of
a derivative, for the same period of 2017.
- The Company recorded total revenues of $6.6 million for
the six-month period ended June 30, 2018, compared to
$9.2 million for the same period of 2017. The decrease
is attributed mainly to lower sales of drug substance to Pfizer
Inc. and of alfataliglicerase in Brazil.
- Research and development expenses were $14.8 million for
the six-month period ended June 30, 2018, compared to
$15.3 million for the same period of 2017. Chiesi’s
participation in the clinical trials of PRX-102 for the treatment
of Fabry disease in the amount of $5.0 million was recorded as
deferred revenues and not as a deduction from the research and
development expenses.
- Selling, general and administrative expenses were
$4.7 million for the six-month period ended June 30, 2018
compared to $5.4 million for the same period of 2017.
- As of June 30, 2018, the Company had $28.3 million of
cash and cash equivalents.
- Pro forma cash balance for June 30, 2018 to include the upfront
from the exclusive license signed with Chiesi for the rights to
PRX-102 in the United States is $53.3 million.
Conference Call and Webcast Information
The Company will host a conference call on Thursday, August
9, 2018, at 8:30 am ET to review the clinical, corporate
and financial highlights.
To participate in the conference call, please dial the following
numbers prior to the start of the call: United States:
+1-844-358-6760; International: +1-478-219-0004. Conference
ID number 9488046.
The conference call will also be broadcast live and available
for replay for two weeks on the Company's website,
www.protalix.com, in the Events Calendar of the Investors
section. Please access the Company's website at least 15
minutes ahead of the conference to register, download, and install
any necessary audio software.
About Protalix BioTherapeutics,
Inc.
Protalix is a biopharmaceutical company focused on the
development and commercialization of recombinant therapeutic
proteins expressed through its proprietary plant cell-based
expression system, ProCellEx®. Protalix’s unique expression
system presents a proprietary method for developing recombinant
proteins in a cost-effective, industrial-scale manner.
Protalix’s first product manufactured by ProCellEx,
taliglucerase alfa, was approved for marketing by the
U.S. Food and Drug Administration (FDA) in May 2012 and,
subsequently, by the regulatory authorities of other countries.
Protalix has licensed to Pfizer Inc. the worldwide
development and commercialization rights for taliglucerase alfa,
excluding Brazil, where Protalix retains full rights.
Protalix’s development pipeline includes the following
product candidates: pegunigalsidase alfa, a modified version of the
recombinant human alpha-GAL-A protein for the treatment of Fabry
disease; OPRX-106, an orally-delivered anti-inflammatory treatment;
alidornase alfa for the treatment of Cystic Fibrosis; and others.
Protalix has partnered with Chiesi Farmaceutici S.p.A., both
in the United States and outside the United States, for the
development and commercialization of pegunigalsidase alfa.
Forward-Looking Statements
To the extent that statements in this press release are not
strictly historical, all such statements are forward-looking, and
are made pursuant to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. The terms “expect,”
“anticipate, “believe,” “estimate,” “project,” “plan,” “should” and
“intend” and other words or phrases of similar import are intended
to identify 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. These statements are
based on our current beliefs and expectations as to such future
outcomes. Drug discovery and development involve a high
degree of risk. Factors that might cause material differences
include, among others: failure or delay in the commencement or
completion of our preclinical and clinical trials which may be
caused by several factors, including: slower than expected rates of
patient recruitment; unforeseen safety issues; determination of
dosing issues; lack of effectiveness during clinical trials;
inability to monitor patients adequately during or after treatment;
inability or unwillingness of medical investigators and
institutional review boards to follow our clinical protocols; and
lack of sufficient funding to finance clinical trials; the risk
that the results of the clinical trials of our product candidates
will not support our claims of superiority, safety or efficacy,
that our product candidates will not have the desired effects or
will be associated with undesirable side effects or other
unexpected characteristics; risks related to our ability to
maintain and manage our relationship with Chiesi Farmaceutici and
any other collaborator, distributor or partner; risks related to
the amount and sufficiency of our cash and cash equivalents; risks
related to the ultimate purchase by Fundação Oswaldo
Cruz of alfataliglicerase pursuant to the stated purchase
intentions of the Brazilian Ministry of Health of the
stated amounts, if at all; risks related to the successful
conclusion of our negotiations with the Brazilian Ministry of
Health regarding the purchase of alfataliglicerase generally;
risks related to our commercialization efforts for
alfataliglicerase in Brazil; risks relating to the compliance
by Fundação Oswaldo Cruz with its purchase obligations
and related milestones under our supply and technology transfer
agreement; risks related to the amount and sufficiency of our cash
and cash equivalents; risks related to the amount of our future
revenues, operations and expenditures; the risk that despite the
FDA’s grant of fast track designation for pegunigalsidase alfa for
the treatment of Fabry disease, we may not experience a faster
development process, review or approval compared to applications
considered for approval under conventional FDA procedures; risks
related to the FDA’s ability to withdraw the fast track designation
at any time; risks relating to our ability to make scheduled
payments of the principal of, to pay interest on or to refinance
our outstanding notes or any other indebtedness; our dependence on
performance by third party providers of services and supplies,
including without limitation, clinical trial services; delays in
our preparation and filing of applications for regulatory approval;
delays in the approval or potential rejection of any applications
we file with the FDA or other health regulatory
authorities, and other risks relating to the review process; our
ability to identify suitable product candidates and to complete
preclinical studies of such product candidates; the inherent risks
and uncertainties in developing drug platforms and products of the
type we are developing; the impact of development of competing
therapies and/or technologies by other companies and institutions;
potential product liability risks, and risks of securing adequate
levels of product liability and other necessary insurance coverage;
and other factors described in our filings with the U.S.
Securities and Exchange Commission. The statements in this
press release are valid only as of the date hereof and we disclaim
any obligation to update this information, except as may be
required by law.
Investor Contact
Marcy NanusSolebury Trout Group646-378-2927
mnanus@troutgroup.com
PROTALIX BIOTHERAPEUTICS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands)
(Unaudited)
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
28,327 |
|
|
|
$ |
51,163 |
|
Accounts
receivable – Trade |
|
|
5,248 |
|
|
|
|
1,721 |
|
Other
assets |
|
|
2,499 |
|
|
|
|
1,934 |
|
Inventories |
|
|
6,978 |
|
|
|
|
7,833 |
|
Total
current assets |
|
$ |
43,052 |
|
|
|
$ |
62,651 |
|
|
|
|
|
|
|
|
|
|
FUNDS IN
RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT |
|
|
1,729 |
|
|
|
|
1,887 |
|
PROPERTY AND
EQUIPMENT, NET |
|
|
6,940 |
|
|
|
|
7,676 |
|
Total
assets |
|
$ |
51,721 |
|
|
|
$ |
72,214 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES NET
OF CAPITAL DEFICIENCY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accruals: |
|
|
|
|
|
|
|
|
Trade |
|
$ |
6,001 |
|
|
|
$ |
7,521 |
|
Other |
|
|
9,071 |
|
|
|
|
9,310 |
|
Convertible
notes |
|
|
|
|
|
|
5,921 |
|
Total current
liabilities |
|
$ |
15,072 |
|
|
|
$ |
22,752 |
|
|
|
|
|
|
|
|
|
|
LONG TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
Convertible notes |
|
|
46,742 |
|
|
|
|
46,267 |
|
Deferred
revenues |
|
|
31,885 |
|
|
|
|
26,851 |
|
Liability
for employee rights upon retirement |
|
|
2,335 |
|
|
|
|
2,586 |
|
Other long
term liabilities |
|
|
5,258 |
|
|
|
|
5,051 |
|
Total long term
liabilities |
|
$ |
86,220 |
|
|
|
$ |
80,755 |
|
Total liabilities |
|
$ |
101,292 |
|
|
|
$ |
103,507 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL
DEFICIENCY |
|
|
(49,571 |
) |
|
|
|
(31,293 |
) |
Total liabilities net
of capital deficiency |
|
$ |
51,721 |
|
|
|
$ |
72,214 |
|
PROTALIX BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (U.S. dollars in thousands, except share and
per share data) (Unaudited)
|
Six Months Ended |
Three Months
Ended |
|
June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
REVENUES. |
$ |
6,559 |
|
$ |
9,247 |
|
$ |
2,006 |
|
$ |
6,358 |
|
COST OF
REVENUES |
|
(5,107 |
) |
|
(7,611 |
) |
|
(2,183 |
) |
|
(5,523 |
) |
GROSS PROFIT
(LOSS) |
|
1,452 |
|
|
1,636 |
|
|
(177 |
) |
|
835 |
|
RESEARCH AND
DEVELOPMENT EXPENSES (1) |
|
(14,762 |
) |
|
(15,271 |
) |
|
(7,476 |
) |
|
(9,304 |
) |
Less – grants |
|
1,078 |
|
|
1,816 |
|
|
235 |
|
|
478 |
|
RESEARCH AND
DEVELOPMENT EXPENSES,
NET |
|
(13,684 |
) |
|
(13,455 |
) |
|
(7,241 |
) |
|
(8,826 |
) |
SELLING,
GENERAL AND ADMINISTRATIVE
EXPENSES (2) |
|
(4,656 |
) |
|
(5,351 |
) |
|
(2,158 |
) |
|
(2,814 |
) |
OPERATING
LOSS |
|
(16,888 |
) |
|
(17,170 |
) |
|
(9,576 |
) |
|
(10,805 |
) |
FINANCIAL
EXPENSES |
|
(4,013 |
) |
|
(5,132 |
) |
|
(1,793 |
) |
|
(3,045 |
) |
FINANCIAL
INCOME |
|
207 |
|
|
1,665 |
|
|
75 |
|
|
40 |
|
(LOSS)
INCOME FROM CHANGE IN FAIR VALUE OF CONVERTIBLE NOTES
EMBEDDED DERIVATIVE |
|
|
(38,061 |
) |
|
|
14,260 |
|
FINANCIAL
(EXPENSES) INCOME, NET |
|
(3,806 |
) |
|
(41,528 |
) |
|
(1,718 |
) |
|
11,255 |
|
NET (LOSS)
INCOME FOR THE PERIOD |
$ |
(20,694 |
) |
$ |
(58,698 |
) |
$ |
(11,294 |
) |
$ |
450 |
|
NET (LOSS)
EARNINGS PER SHARE OF COMMON STOCK: |
|
|
|
|
BASIC |
|
|
|
|
Net (loss) earnings per share
of common stock |
$ |
(0.14 |
) |
$ |
(0.47 |
) |
$ |
(0.08 |
) |
$ |
0.00 |
|
DILUTED |
|
|
|
|
Net loss per share of common
stock |
$ |
(0.14 |
) |
$ |
(0.47 |
) |
$ |
(0.08 |
) |
$ |
(0.06 |
) |
WEIGHTED
AVERAGE NUMBER OF SHARES OF
COMMON STOCK USED IN COMPUTING (LOSS)
EARNINGS PER SHARE |
|
|
|
|
BASIC |
|
145,985,445 |
|
|
126,000,782 |
|
|
146,644,450 |
|
|
127,523,706 |
|
DILUTED |
|
145,985,445 |
|
|
126,000,782 |
|
|
146,644,450 |
|
|
192,598,389 |
|
(1)
Includes share-based compensation |
$ |
40 |
|
$ |
120 |
|
$ |
(2 |
) |
$ |
55 |
|
(2)
Includes share-based compensation |
$ |
34 |
|
$ |
96 |
|
$ |
14 |
|
$ |
43 |
|
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