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Protalix Biotherapeutics Inc. (NASDAQ:PLX) reported a net loss of $3.6 million for Q1 2025, translating to an earnings per share (EPS) of -$0.05, missing the forecasted $0.03. The company’s revenue was $10.1 million, below the expected $21.6 million. Following the earnings release, Protalix’s stock plummeted 21.8% in premarket trading, reflecting investor disappointment over the financial results. According to InvestingPro data, the stock trades at a P/E ratio of 72.1x, suggesting a premium valuation despite recent challenges.
Key Takeaways
- Protalix’s Q1 2025 EPS and revenue significantly missed analysts’ expectations.
- The company’s stock fell sharply by 21.8% in premarket trading.
- Revenue from selling goods increased by 170% compared to Q1 2024, driven by sales to Pfizer and Fearcruz.
- Protalix plans to initiate a Phase II clinical trial for its gout treatment in late 2025.
Company Performance
Protalix Biotherapeutics experienced a challenging start to 2025, with financial results falling short of market expectations. Despite a 170% year-over-year increase in revenue from selling goods, the company reported a net loss of $3.6 million. The revenue growth was primarily due to increased sales to partners like Pfizer and Fearcruz. The substantial miss in revenue and EPS compared to forecasts overshadowed these gains. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 2.34x and more cash than debt on its balance sheet, suggesting adequate resources to weather near-term challenges.
Financial Highlights
- Revenue: $10.1 million, a 170% increase from Q1 2024.
- Earnings per share: -$0.05, compared to the forecast of $0.03.
- Net loss: $3.6 million, improved from a $4.6 million loss in Q1 2024.
- Cash and cash equivalents: $34.7 million.
Earnings vs. Forecast
Protalix’s actual EPS of -$0.05 missed the forecasted $0.03, marking a significant deviation from expectations. This represents a negative surprise of approximately 266.7%. Revenue also fell short, with actual figures at $10.1 million versus the anticipated $21.6 million, marking a substantial shortfall.
Market Reaction
Following the earnings announcement, Protalix’s stock price dropped by 21.8% in premarket trading, reaching $2.26 per share. This decline reflects investor concerns over the missed earnings and revenue targets. The stock’s movement contrasts with its recent performance, where it reached a 52-week high of $3.10. Despite the recent pullback, InvestingPro data reveals impressive returns of 131.2% over the past year and a beta of -0.05, indicating the stock typically moves independently of broader market trends. Analysts maintain optimistic price targets between $14-15 per share, suggesting significant potential upside.
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Outlook & Guidance
Protalix is focusing on advancing its clinical pipeline, with plans to initiate a Phase II trial for its gout treatment, PRX-115, in the second half of 2025. The company also anticipates potential regulatory milestones with its partner Chiesi, which could amount to $75 million.
Executive Commentary
CEO Dror Bashan expressed optimism despite the financial miss, stating, "2025 is off to a good start and promises to be an exciting year for Protalix." He also highlighted the company’s progress in its clinical programs, noting, "We are excited to begin a Phase II program for PRX-115 later this year."
Risks and Challenges
- Continued financial underperformance could strain investor confidence.
- Delays in clinical trials or regulatory approvals may impact future growth.
- Market competition in rare disease treatments poses a challenge.
Q&A
During the earnings call, analysts inquired about the U.S. patient enrollment for the gout trial, the competitive positioning of PRX-115, and the potential impact of U.S. pharmaceutical tariffs. The company confirmed ongoing enrollment and emphasized the advantages of its treatment over existing options.
Full transcript - Protalix Biotherapeutics Inc (PLX) Q1 2025:
Conference Operator: Good morning, ladies and gentlemen, and welcome to the Protalix Biotherapeutics First Quarter twenty twenty five Financial and Business Results Conference Call. As a reminder, this conference is being recorded. I will now turn the conference over to our host, Mike Moyer of LifeSci Advisors, Investor Relations for Potalix. Thank you. Please go ahead.
Mike Moyer, Investor Relations, LifeSci Advisors, LifeSci Advisors: Thank you, operator, and welcome to the Potalix Biotherapeutics First Quarter twenty twenty five Financial Results and Business Update Conference Call. With me today are Dror Bashan, President and CEO of Pratalyx and Eyal Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the financial results for the quarter and corporate updates was issued this morning and is available now on the Protalix website. Please take a moment to read the disclaimer and 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 Pratoxys filings with the U. S. Securities and Exchange Commission. I will now turn the call over to Mr.
Mishan. Dror?
Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Mike. And thank you everyone for joining for our first quarter of twenty twenty five financial results and business update call. I will begin with a reviewing of our accomplishments over the quarter in recent weeks. Following my remarks, Eyal will provide a detailed review of our financial results, and then we will open the line for your questions, of course. We had another solid quarter with an increase in revenues from selling goods compared to the same period last year.
Giving the promising results obtained in 2024 from our first in human study of our gut product candidate PRX-one hundred fifteen, we are focused on building on the momentum and working towards initiating the Phase two clinical trial in patients with gout later this year. At the same time, we continue to evaluate additional pipeline candidates for potential further development, including PRX-one hundred nineteen as well as other early stage clinical assets. Eyal will discuss the details of our financial achievements in few minutes. And I would like to start with PRX-one hundred fifteen. As we announced with our results for 2024, we completed all cohorts in the first in human Phase one clinical trial of PRX-one hundred fifteen.
The study involved a single dose of PRX-one hundred fifteen subjects with elevated uric acid levels. Overall PRX-one hundred fifteen exposures increased and in a single dose of PRX-one hundred fifteen rapidly reduced plasma uric acid levels, both in dose dependent manner. Both in dose dependent manner, I’m sorry. They’re encouraging results from these studies suggest a long acting effect and may enable us to potentially widen the dose and interval, which could enhance patients compliance and treatment flexibility. I encourage you to check the publication section of our website, where we have uploaded a poster that was presented at the ACR conference in November of twenty twenty four describing the results.
We are excited to progress with the clinical development of PRX-one hundred fifteen and our goals continue to be initiation of this Phase two study in the second half of this year. I now turn to our Fabio. Last year, our commercial partner, Piazzi, Global Royal Diseases continued to increase its focus on our Fabulo and invest substantially in medical and commercial program. Last December, NKSD announced, I’m sorry. KSE announced that the European Medicine Agency or EMA validated a variation submission for PEGUNIGARCID as alpha.
This submission is to reduce the dosing frequency in the label to be two milligram per kg every four weeks. The currently approved dose is one milligram per kg administered every two weeks. The application was supported by the revised population PK model and the new exposure response analysis of the clinical data from the previously completed BRIGHT Phase three clinical study, as well as the related extension study. We look forward to working closely with both KEDY and the EMA throughout the review process, we expect to hear from the EMA during the fourth quarter of this year. We continue to appreciate Kiesi’s partnership and dedication to Fabry disease patients and patient community.
Our next pipeline candidate also expressed for Procedex is PRX-one hundred nineteen. PRX-one hundred nine is a pegylated recombinant human DNase-one candidate in development of the potential treatments of diseases associated with neutrophil extracellular trips on it. For clinical of PRX-one hundred nineteen remain ongoing. As we have been discussing throughout the past year, we have been focusing our efforts on early stage development assets to build our product development pipeline. This includes leveraging our Procedex platform and pegylation capabilities, evaluating drug delivery system that may allow protective delivery of different modalities and focusing our therapeutic areas to renal rare diseases.
We will continue these efforts throughout 2025, and we hope to provide with further updates as this program become more mature. For now, let me say that I’m excited about our R and D effort and we are laying the groundwork for future developments. With that, it is now my pleasure to turn the call over to Eyal to review our financials. Eyal, please go ahead.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Thank you Dror and thank you everyone for joining today’s call. Let me review our first quarter twenty twenty five financials. We recorded revenues from selling goods of $10,000,000 during the three months ended 03/31/2025, an increase of $6,300,000 or 170 percent compared to revenues of $3,700,000 for the three months ended 03/31/2024. The increase resulted primarily from an increase of $5,900,000 in sales to Pfizer and an increase of $400,000 in sales to Fearcruz in Brazil. We recorded revenues from license and R and D services of $100,000 for the three months ended 03/31/2025 and 03/31/2024.
Revenues from license and R and D services are comprised primarily of revenues we recognized in connection with our license supply agreements with Kiesi. Going forward, we expect to generate minimal revenues from license and R and D services other than potential regulatory milestone payments. Cost of goods sold was $8,200,000 for the three months ended 03/31/2025, an increase of $5,600,000 or 215% from cost of goods sold of $2,600,000 for the three months ended 03/31/2024. The increase in cost of goods sold was primarily the result of the increase in sales to Pfizer and to your crews in Brazil. For the three months ended 03/31/2025, our total research and development expenses were approximately $3,500,000 comprised of approximately $1,800,000 of salary related expenses, approximately 800,000 in subcontractor related expenses, approximately $200,000 of materials related expenses and approximately $700,000 of other expenses.
For the three months ended 03/31/2024, our total research and development expenses were approximately $2,900,000 comprised of approximately $1,500,000 of salary and related expenses, approximately $500,000 of stock contractor related expenses, approximately $200,000 of material related expenses and approximately $700,000 of other expenses. Total increase in research and development expenses for the three months ended 03/31/2025 was $600,000 or 21% compared to the three months ended 03/31/2024. The increase in research and development expenses resulted primarily from the advance in our clinical pipeline. Selling, general and administrative expenses were $2,600,000 for the three months ended 03/31/2025, a decrease of $500,000 or 16% compared to $3,100,000 for the three months ended 03/31/2024. The decrease resulted primarily from a decrease of $400,000 in salary related expenses and a decrease of $100,000 in selling expenses.
Financial income net was $400,000 for the three months ended 03/31/2025 compared to financial income of net of $100,000 for the three months ended 03/31/2024. The difference resulted primarily from lower notes interest expenses due to the September 2024 repayment in full of all the outstanding principal and interest payable under our then outstanding 7.5% senior secured promissory notes, partially offset by lower interest income on bank deposits and higher exchange rate costs. For the three months ended March of each 03/31/2025 and 03/31/2024, we recorded a tax benefit of approximately $100,000 The tax benefit resulted primarily from deferred taxes on income mainly derived from GILTI income mainly in respect of Section 174 of The U. S. Tax Cuts and Jobs Act of 2017 or the TCJA.
Effective in 2022, Section 134 of the TCJA requires all U. Companies for tax purposes to capitalize and subsequently amortize R and D expenses that fall within the scope of Section 134 over five years for research activities conducted in The U. S. And over fifteen years for research activities conducted outside The United States rather than deducting such costs in the current year. Cash, cash equivalents and short term bank deposits were approximately $34,700,000 at 03/31/2025.
Net loss for the quarter ended 03/31/2025 was approximately $3,600,000 or $0.05 per share basic and diluted compared to $4,600,000 or $0.06 per share basic and diluted for the same period in 2024. I will now turn the call back to you Dror.
Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Eyal. To conclude, 2025 is off to a good start and promises to be exciting year for Protalix, as we continue to build out the foundations for the future. We are excited to begin a Phase II program for PRX-one hundred ’15 later this year, and we continue to make progress on our early stage R and D efforts. I’m confident in our strategy. Balance sheet and three streams of revenue will enable the next phase of pipeline development for Protalix.
We look forward to updating you on our progress, as we continue to drive innovation and create long term value for both patients and stockholders. Now I would like to ask the operator to open the call for questions, please.
Conference Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone Our first question today is coming from John VanderMoorestein of Zacks. Please go ahead.
John VanderMoorestein, Analyst, Zacks: Great, thank you. And how are doing, Dror and Eyal? Thought I’d start out with any visibility that you might have on an El Fabrio milestone. You know, I know in the past we’ve talked about that, and and we’ve, you know, advanced a quarter since then. And I wanted I wanted to know if we’re close to anything and and what you have to say on that.
Dror Bashan, President and CEO, Protalix Biotherapeutics: You know, all all I can say, I mean, I think we’ve discussed it multiple times, and I can emphasize it today, of course, it’s very relevant that Kiese sales efforts and outcomes are strong. Okay, the pace of recruitment of commercial patients is very good and above our expectations. You know, ProTalix sales as we discussed are to PSE’s inventory, download directly to the market. Managing the inventory does not reflect, you know, one to one with actual sales, which I think I emphasized. And actually, they are actually improving every quarter.
This is what we can say. TSC is a private company. We are obliged by the agreement to not detail specific numbers, but I say loudly and I hope clear that they are doing very well and actually improving every quarter. Okay.
John VanderMoorestein, Analyst, Zacks: And you mentioned on the call about the change in dosing frequency in the EMA and in the EU. Is there any effort going to be made for a similar approach in The United States to gain that dosing here?
Dror Bashan, President and CEO, Protalix Biotherapeutics: Currently, first, what we discussed is an application with Kiesia submitted. Okay. It’s not a done deal. This is I hope it will be approved, of course. It’s ongoing.
We don’t have any red flag present. So it’s ongoing and we are encouraged. With regard to The US, once there will be something to update, we will update, of course.
John VanderMoorestein, Analyst, Zacks: Okay. And I was looking at the list of medications for gout and I know we’ve talked about Crexetra previously on these calls and in our other meetings. I I also noticed that there was Novartis’ Elaris out there and wanted to know how that fits into the treatment of gout.
Dror Bashan, President and CEO, Protalix Biotherapeutics: We will know more, I would say. Let’s put this way, from the Phase one, we are very much encouraged from the outcomes of the Phase one, which are single dose. Once we initiate the Phase two, and especially once we have the top line results, we will know much, much more. This is a well designed study, double blind, a high, I would say statistical power, even very high. It was discussed with the FDA.
So if indeed it will it will mimic or will be close to the phase one results, we have potentially a very good asset in hand, including, you know, at least what we see for now, want to be careful future competition. You don’t expect me to refer to this product or the other product.
John VanderMoorestein, Analyst, Zacks: Okay. Yeah. I know it’s indicated for a bunch of different things including gout. I didn’t know.
Dror Bashan, President and CEO, Protalix Biotherapeutics: No. No. No. No complaints. But, you know, I cannot refer to, you know, specific potential competition, you know, the market is or the pipeline is bigger than one program.
John VanderMoorestein, Analyst, Zacks: Got it. And final question for me is just on the options. I think you had some options that were both close to expiration and close to their exercise price last quarter. Did those get cleared out or what was the disposition of that?
Dror Bashan, President and CEO, Protalix Biotherapeutics: So I think I will refer to that if it’s okay.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Yes, sure, George. So, John, thanks for the question. The warrants that you’re referring to from the 2020 PIPE transaction, they all expired other than a minimal amount. The disclosure, obviously, is in the 10 Q, a 908,000 warrants were exercised all the rest. If I remember correctly, 500,000.0 shares, a warrant actually expired without being exercised.
John VanderMoorestein, Analyst, Zacks: Okay. Very good. Thank you, Al. Thank you, Dror.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Thank you. Thank you, John.
Conference Operator: Thank you. The next question is coming from Ben Oksashutti of Parental Securities. Please go ahead.
Ben Oksashutti, Analyst, Parental Securities: Hello, Dror. Thank you for taking my questions and congrats on the continued progress. Just small questions on the Phase II trial planned in gout. Do you also I’m not sure if I missed that one. Do you also plan to enroll U.
S. Patients? Then the other question is more of a general. Other benefits could you kind of mention versus like KRYSTEXXA besides the injection frequency? What else would you like that is worth highlighting and looking at?
Thank you.
Dror Bashan, President and CEO, Protalix Biotherapeutics: So, you for that. The answer for the first question is yes. The majority of the patients will be enrolled in The US. As for the second one, of course, this is the plan. To your second question, beyond the frequency, which is, by the way, very much important, which will be significant, We will need to see the outcomes in order to say that we have a better immunogenicity profile or others.
You know, we, of course, we hope to have a very good safety profile and a very good immunogenicity profile, but, you know, let’s see the results. But certainly this is the intent as well.
Ben Oksashutti, Analyst, Parental Securities: Okay, thank you very much.
Conference Operator: Thank you. The next question is coming from Robert Raju of H. C. Wainwright. Please go ahead.
Dan, Analyst, H.C. Wainwright: Hi, good morning, Doron and all. This is Dan on for Ram. Thanks for taking our questions. So I guess just to start, we were wondering and just to confirm, as there’s been a lot of recent changes in the FDA, even more so as of I think it’s Tuesday, The Proselyx products are regulated by CEDAR in The US, right?
Dror Bashan, President and CEO, Protalix Biotherapeutics: As far as I know, if I remember well, and I can relook at it, maybe I don’t remember how. El Fabrio was approved by the Rural Disease Division.
Dan, Analyst, H.C. Wainwright: Got it. Okay. And then secondly, can you discuss any effects that the planned U. S. Pharmaceutical tariffs may have on cost of goods sold?
Would those be booked when you sell the inventories or would you have an after sale agreement on that?
Conference Operator: Yes, to refer to this
Dror Bashan, President and CEO, Protalix Biotherapeutics: to Better than I do.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Of course, of course. So actually we’re not selling to The U. S. We’re selling to Chiesi from Surikivya, Italian company. So our relationship with Chiesi is basically a relationship between an Israeli company and an Italian company and the taxes that they are now in the news obviously are not going to impact our relationship with Chiesi.
With regards to the way that Chiesi is going to ship those, they actually the files, Fabryo vial to The US that’s, I guess, going to be an intercompany transaction between two of the entities held by the same parent company. So, I’m not even sure that that’s going to input them, but that is a question for them.
Dan, Analyst, H.C. Wainwright: Got it. And kind of a follow-up on that. Can you confirm if Kiese discussed any increase in the list price or plans to increase the list price of El Fabrio in The U. S. In response to those tariffs?
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: The answer is no. As far as we know and again, it’s not that we can share their pricing strategy that’s confidential and protected under the license agreement. But as far as we understand today, this is not part of the plan. Obviously, it might change once and if the taxes are going to be taxed in place. We’ll see how this impacts the prices in the market.
And I guess, is it going to fall?
Dror Bashan, President and CEO, Protalix Biotherapeutics: As you know, it’s difficult to see today what will be the change in the tariffs, and it’s a bit volatile. And KS is a very you know, well established company. They know what they’re doing. So I’m sure we are in very good hands, like, you know, in very good commercial hands, by the way.
Dan, Analyst, H.C. Wainwright: Got it. Thank you.
Conference Operator: Thank you. The next question is coming from Dhar Bhaskar, a Private Investor. Please go ahead.
Dhar Bhaskar, Private Investor: Thank you very much for taking my call, gentlemen. You said in your statement this morning that you expect minimal revenues going forward on the R and D line item, basically from Kiese. Can you tell me what the approximate amount of the value of the contract left to be paid out by Kiese is? Thank you.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Yes. So let me explain what I said. So research and development revenues that we recorded in the past were associated in connection with a license and R and D agreement with Kiese. It means to say that when they invested in Alfabrio back then, so they funded part of the development cost, they put a down payment, all of this according to UFGAP has to be linearly divided along the years of the life of the agreement or the development. This is the reason that in past years this line item was greater, way greater than the minimal revenues that we’re showing.
Going forward, the only thing that will appear is not going to be the commercial milestones because that’s going be part of the sales, but only the regulatory milestones. And the regulatory milestones, I have to and again, that’s a very, you know, it’s a far estimate, nobody knows that has to do with the once every two weeks, once every four weeks I’m starting in The US, if approved once every four weeks in Europe if approved, if in the future we’ll be able to show security. Basically, those are the regulatory milestones that are left. So, if you want me to quantify them, they can be up to something like $75,000,000 But obviously I think it’s minimal at this point because it’s a milestone by milestone and it depends when they should get it.
Dhar Bhaskar, Private Investor: If I could simply clarify, you were saying that there’s approximately $75,000,000 left to pay out on the agreement with Kiese?
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: No, that’s not what I’m saying. I’m saying that under this line item, the research and development revenues, the $75,000,000 potential milestones, the global potential milestones on the KSI agreement, which includes commercial milestones and we
Ben Oksashutti, Analyst, Parental Securities: go to
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: milestones, any number between, I don’t know, up to $05,000,000,000 makes sense. It all depends on their sales and when they hit the various thresholds in the various agreements, just remind everybody on the call that we’re talking about two separate agreements, FCUS and US and the license was separately paid and So in theory, the overall milestone to be paid can be potentially up to $05,000,000,000
Dhar Bhaskar, Private Investor: Okay. Thank you very much. Appreciate your answer.
Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: You’re welcome.
Conference Operator: Thank you. We’re showing no further questions at this time. I’d like to turn the floor back over to Mr. Bouchon for closing comments.
Dror Bashan, President and CEO, Protalix Biotherapeutics: So thank you, and thank you everybody that joined the call. I would like to emphasize again that what we have said in the past, as I mentioned, KLI sales efforts are strong, pace of recruitment of commercial patients is very good and actually beyond our expectations and Protalix sales to Kiesi’s inventory, so actually manage the inventory sales and not directly to the market. And beyond that, are focused on building our pipeline. Of course, we will initiate the Phase two in gout later this year. So we look forward to update you as the progress continues.
Conference Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.
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