Earnings call transcript: Protalix Q2 2025 misses EPS, beats revenue expectations

Protalix Biotherapeutics Inc (NASDAQ:PLX), a biotech company with a market capitalization of $128.17 million, reported its second-quarter 2025 earnings, revealing a mixed performance that saw the company miss earnings per share (EPS) expectations while exceeding revenue forecasts. The EPS came in at -$0.04, significantly below the expected $0.11, marking a 136.36% miss. However, the company reported revenues of $25.77 million, surpassing the anticipated $23.10 million by 11.56%. Following the earnings announcement, Protalix’s stock fell 3.73% in premarket trading. InvestingPro analysis indicates the stock is currently trading at a relatively high P/E multiple of 30.26x, suggesting premium valuation compared to its Fair Value.

Key Takeaways

• Protalix missed EPS expectations by 136.36% but beat revenue forecasts by 11.56%.
• The company’s stock dropped 3.73% in premarket trading after the earnings release.
• Revenue growth was primarily driven by Elfabrio sales, despite increased R&D expenses.
• The market reaction was slightly negative due to the significant EPS miss.

Company Performance

Protalix Biotherapeutics demonstrated robust revenue growth in Q2 2025, with a 16% year-over-year increase primarily fueled by Elfabrio sales. According to InvestingPro data, the company has maintained strong financial health with a current ratio of 2.49, indicating ample liquidity to meet short-term obligations. Despite the revenue beat, the company’s profitability was impacted by a substantial rise in research and development expenses, doubling to $6 million, which contributed to the EPS miss. InvestingPro subscribers can access 8 additional key insights about PLX’s financial health and growth prospects.

Financial Highlights

• Revenue: $25.77 million, up 11.56% from forecasts.
• Earnings per share: -$0.04, missing expectations by 136.36%.
• Net income: $164,000, a turnaround from a $2.2 million loss in Q2 2024.
• Cash and cash equivalents: $33.4 million.

Earnings vs. Forecast

Protalix’s reported EPS of -$0.04 fell short of the $0.11 forecast, marking a significant deviation with a negative surprise of 136.36%. In contrast, the company exceeded revenue expectations by 11.56%, reflecting strong sales performance despite profitability challenges.

Market Reaction

Following the earnings release, Protalix’s stock decreased by 3.73% in premarket trading, reflecting investor concerns over the EPS miss. The stock remains within its 52-week range of $0.82 to $3.10, indicating potential volatility as the market digests the mixed earnings results. Notably, InvestingPro data shows PLX has delivered an impressive 73.12% return over the past year, with a beta of -0.21, suggesting it often moves contrary to broader market trends. Analyst price targets range from $13 to $15, indicating significant potential upside from current levels. Discover comprehensive valuation analysis and more detailed insights with InvestingPro’s exclusive research report.

Outlook & Guidance

Protalix continues to focus on expanding its pipeline, particularly with the upcoming Phase II study for PRX-115, expected to begin patient enrollment in Q4 2025. The company anticipates significant milestone payments and aims to capture a substantial market share in the Fabry disease market by 2030.

Executive Commentary

CEO Dror Bashan expressed optimism about future royalty revenues from Elfabrio, targeting over $100 million by 2030. CFO Eyal Rubens highlighted the potential for up to $500 million in milestone payments, underscoring the company’s growth prospects.

Risks and Challenges

• High R&D expenses could continue to pressure profitability.
• Market competition in rare disease treatments remains intense.
• Economic uncertainties may impact global sales and partnerships.

Q&A

During the earnings call, analysts inquired about the strategic partnership with Chiesi and the progress of the PRX-115 Phase II trial. Executives reiterated their commitment to pipeline growth and clarified there are no immediate plans for mergers or acquisitions.

Full transcript - Protalix Biotherapeutics Inc (PLX) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the Protalix Biotherapeutics Second 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 Mr. Mike Moyer with LifeSci Advisors. You may begin your conference.

Mike Moyer, Host, LifeSci Advisors: Thank you, operator, and welcome to the Protalix Biotherapeutics Second Quarter twenty twenty five Financial Results and Business Update Conference Call. With me today are Dror Bashan, President and CEO of Protalix Eyal Rubens, 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 now available on the Protalix website. Please take a moment to read the disclaimer about forward looking statements in the press release. The earnings release in 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 Protalix’s filings with the U. S. Securities and Exchange Commission. I will now turn the call over to Mr.

Bashan. Dror?

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Mike, and thank you everyone for joining our second quarter twenty twenty five financial results and business update call. I will begin with reviewing our accomplishments over the quarter and recent weeks. Following my remarks, Eyal will provide a detailed review of our financial results. We will then open the line for questions, of course. In the 2025, we experienced a 50% increase in revenues from selling goods compared to the same period last year.

Revenue growth was driven primarily by sales of Elfabrio to Chiesi. As you know, Chiesi is an international biopharmaceutical group with 31 affiliates worldwide and a dedicated global rare disease division. They’re an ideally suited partner for the commercialization of El Fabryo for Fabry disease, which represents a global market of approximately $2300000000.0.20 25 and is forecasted to reach approximately 3,200,000,000.0 by 02/1930. As we have discussed in the past, under the terms of our partnership, Chiazy is solely responsible for the commercialization of FW, including distribution, patient acquisition, retention, and payer reimbursement. And Protalix is responsible for manufacturing and product distribution to Kiesi.

Operationally, Kiesi conducts its own internal commercial forecasting to guide its inventory needs, and to date has placed bulk orders with Protalix since regulatory approval for El Fabrio since it was launched or approval was obtained in 2023. Once a bulk order has been delivered to Kiesi, Protalik recognizes such an order as a sale. Since commercialization of elfabril is still in early phase of market launch, it is important to emphasize certain aspects of this relationship and how it is expected to function in the near future. In the early phase of the launch, there may be quarter with no bulk orders are made due to inventory destocking. Current ordering patterns are only expected to change once the underlying demand characteristics stabilize and launch materials and market share gradually grows.

Orders placed by Kiely are not made in direct relation to pace of patients acquisition and retention. So they cannot be used as a substitution for estimates of end user demand for El Fablio. With that said, I have to emphasize that we continue to anticipate El Fablio royalties exceeding $100,000,000 by 2030 based on the projected 15% to 20% market share of the estimated 3,200,000,000.0 Fabry total market. In addition to these elements, I remind you that at least last year in 2024, the European Medicine Agency, EMA, validated Kieti’s variation submission for the Fabryol label to include a less frequent dosing regimen once in four weeks versus the current standard of care every two weeks dosing regimen for all current Fabry injectable medications. This variation submission is still under review by the EMA.

To reiterate, we partner have a and Kiesi has consistently increased its focus on the Elfaro by making substantial investments in medical, regulatory and successful commercialization programs. We continue to appreciate Kiesi partnership and dedication to Fabry disease patients and the patient’s community. I now turn to our gout product candidate PRX-one hundred fifteen. Giving the promising results obtained in 2024 from our first in human study of PRX-one hundred fifteen, We are focused on building on the momentum and continue to progress towards initiation of a Phase II study in the 2025 and enrollment of the first patient in the fourth quarter. As we announced with our results for 2024, the first in human study involved a single dose of PRX-one hundred fifteen in subjects with elevated uric acid levels.

The encouraging results from the study suggest a long acting effect and the potential of widening the dose interval, which would enhance patients compliance and treatment flexibility. As we have been discussing throughout the past year, our R and D efforts are focused on early stage development assets to build our product development pipeline. This includes leveraging our prosthetics platform and pegylation capabilities, evaluating drug delivery system that may allow protective delivery of different modalities and focusing on therapeutic areas to renal rare diseases. These efforts will continue throughout 2025, and we intend to provide further updates as these programs mature. We are excited about the groundwork and we are laying for future developments.

Before turning the call over to Eyal for a review of our financials, I will close my remarks with a personal note. As we recently announced, Eyal is stepping down as our Chief Financial Officer after six years of dedicated service to Protex, And Eyal and I worked closely and collaboratively on Protalix successful transformation. We contributed greatly to the strengthening of the company’s capital in preparing us for future growth. On behalf of the board and the Protalix family, we thank Eyal for all the contributions and wish him continued and well earned success in the future. As we have previously announced, Eyal is to be succeeded by Gilad Mambloc.

Gilad is a seasoned financial executive with deep experience in healthcare and technology companies, and has an extensive background in capital markets transactions, mergers, acquisitions, and business development. We are happy to welcome Gilad to the team and have every confidence that he will play an important role in Protalix management as we continue to work towards future growth. Eyal, now it’s your turn, please.

Eyal Rubens, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Thank you Dror for your very kind words. It has been a pleasure to work with you these last years. I’m sure that under the continued leadership and with the support you laid my very capable successor, Vitalik has a bright future. Vitalik’s financial management will be in good hands under his leadership. With that, I will now review our second quarter twenty twenty five financials.

We recorded revenues from selling goods of $15,400,000 during the three months ended 06/30/2025, an increase of $2,100,000 or 16% compared to revenues of $13,300,000 for the three months ended 06/30/2024. The increase resulted primarily from an increase of $8,000,000 in sales to Kiese, partially offset by a decrease of $4,700,000 in sales to Brazil, which is a timing difference and $1,200,000 in sales to Pfizer. Revenues from license and R and D services were $200,000 for the three months ended 06/30/2025 and 06/30/2024. Revenues from license and R and D services are comprised primarily of revenues we recognized connection with our agreements with Kiesi. We expect to generate minimal revenues from licensed R and D services other than potential regulatory milestone payments.

Cost of goods sold was $5,900,000 for the three months ended 06/30/2025, a decrease of $3,600,000 or 38% from cost of goods sold of $9,500,000 for the three months ended 06/30/2024. The decrease in cost of goods sold was primarily the result of the decrease in sales to Pfizer and Firucus Brazil, partially offset by the increase in sales to Chiesi. For the three months ended 06/30/2025, our total research and development expenses were approximately 6,000,000 comprised of approximately 3,000,000 subcontractor related expenses, approximately 2,000,000 in salary and related expenses, approximately 200,000.0 of materials related expenses and approximately 800,000.0 of other expenses. For the three months ended 06/30/2024, our total research and development expenses were approximately 3,000,000 comprised of approximately 1,600,000.0 of salary and related expenses, approximately 500,000.0 in subcontractor related expenses, approximately 200,000.0 of materials related expenses and approximately 700,000.0 of other expenses. Total increase in research and development for the three months ended 06/30/2025 was 3,000,000 or 100% compared to research and development expenses of 3,000,000 for the three months ended 06/30/2024.

The increase in research and development expenses resulted primarily from preparations for the planned Phase two clinical trial of PRX-one hundred fifteen. We expect to continue to increase significant increase in research and development expenses as we enter into a more advanced stage of fresh clinical and clinical trials for certain of our product candidates. Selling, general and administrative expenses were 2,600,000 for the three months ended 06/30/2025, a decrease of $900,000 or 26% compared to $3,500,000 for the three months ended 06/30/2024. The decrease resulted primarily from a decrease of $600,000 in salary and related expenses and a decrease of $300,000 in selling expenses. Financial expenses net was $500,000 for the three months ended 06/30/2025 compared to financial income net of $200,000 for the three months ended 06/30/2024.

The increase in financial expenses net resulted primarily from exchanging costs and lower interest income of bank deposits, partially offset by lower notes interest expenses due to the September 2024 repayment in full of all the outstanding principal interest table under the convertible promissory notes that were then outstanding. We recorded tax expenses approximately 500,000.0 for the three months ended 06/30/2025 compared to a tax benefit of approximately 100,000.0 for the three months ended 06/30/2024. Tax expenses or benefit resulted primarily from taxes and income mainly derived from GILTI income, mainly in respect of Section 174 of The US Tax Cuts and Jobs Act of 2017, the TCJA. Effective in 2022, Section 174 of the TCJA requires all US companies for tax purposes to capitalize and subsequently amortize R and D expenses that fall within the scope of 174, over five years for research activities conducted in The United States and over fifteen years for research activity conducted outside The United States rather than deducting such costs in the current year. On 07/04/2025, Tax Reform Legislation was enacted in The United States through the passage of HR1, the One Big Beautiful Bill Act, which includes significant corporate tax changes, including a restoration of the current predictability for domestic research expenditure beginning in 2025 with transition options for previously capitalized amounts.

We continue to evaluate the impact that new legislation will have on the consolidated financial statements. At 06/30/2025, we had $33,400,000 in cash and cash equivalents and short term bank deposits. Net income for the three months ended 06/30/2025 was approximately $164,000 or $0 per share basic and diluted compared to net loss of approximately 2,200,000.0 or $03 per share basic and diluted for the same period in 2024. In closing, I wish to extend my sincere thanks to the many investors and stakeholders in Pertalex that have supported us the last six years. It has been an honor to work with you all.

I will now turn the call back to you, Dror.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Eyal. Again, we appreciate everything you have done for Protalix. To conclude, for the 2025, we continue to execute our strategic plan and build for the foundation of our future. We are excited to begin a Phase II program for PRX-one hundred fifteen later this year and to making progress on our early stage R and D efforts. I’m confident that our strategy, balance sheet and three streams of revenue will create value for the stockholders.

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 will turn the operator to open the call for questions please.

Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. Confirmation tone will indicate your line is in the question queue.

Please go ahead.

John, Analyst: Great, thank you. And welcome to the CFO seat, Gilat, and best wishes to you all. It seems like a long, long time since we first met back in New York pre COVID, a world away definitely. I thought I’d start out with a question on Chiesi. It looks like they started or are planning to launch a study called Pagasso.

Guess the way I see it, maybe it’s a Phase four trial or something for El Fabrio. Looks at real world setting use of the product. Any comments on that? On how that trial, what its objectives are?

Dror Bashan, President and CEO, Protalix Biotherapeutics: Know, John, this is part of their phase four program in order to enhance, I would say, the merits and strengths of the program. Know, once we will have, of course, outcomes, we will continue, of course, to update.

John, Analyst: Okay. And second question is on the 115 program. You’re going to start a Phase II pretty soon, and then also, I think, try to enroll before the end of the year. How many sites do you expect for that trial? Any other detail that you can provide on how that’s going to be structured?

And I’ll take my answers offline. Thank you, Dore.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Sure, it’s okay. So we plan a couple of dozens of sites. It depends. We will operate mainly or most of the sites supposed to be in The U. S, I would say between 20 to 30 sites overall, and a couple of sites would be outside The US.

As we will start recording, we’ll see if we need to expand it or we are okay with 20 or 25, give or take this number. Right now we open I think 25 I mean as a plan. John?

Conference Operator: Looks like he disconnected. We can go to the next question. Next question is from Robert Raju from H. C. Wainwright.

Please go ahead.

Dan, Analyst, H.C. Wainwright: Good morning. This is Dan on for Ram. Thanks for taking our questions. And just wanted to say good luck to you all. I haven’t been here for very long, but it’s been a lot of fun.

So basically kind of curious, has Kiesi mentioned what percentage of the market share they hold in Fabry disease? Or do you guys have an indication on that? And does Kiesi have any specific market strategies in place currently to expand El Fabryo sales? If so, what are those? I’d like to ask a follow-up if I could.

Dror Bashan, President and CEO, Protalix Biotherapeutics: So, first, thank you for that. I think we have discussed, well, we have an agreement in place with Kiesi. We do not disclose number of patients and or market share, and we respect that, of course. I can assure you, and we say it again and again, not only on earnings call, Chiesi does well on the marketplace, actually better than we expect. We continue to see growth of patient acquisition actually a significant growth.

You know, as time goes by, they grow their market share. And I assume going back to what I’ve said at the beginning that within a year, year and a half, we see something which is much more gradually growth than fluctuations of sales, you know, from Portalix to Chiesis inventory.

Dan, Analyst, H.C. Wainwright: Alright. Thank you for that. And during your opening remarks, maybe I’m reading into this a little bit, but you mentioned that Gilad has significant experience in business development and mergers and acquisitions. Could you expand on how Protalix might utilize his experience to that degree? Thank you.

Dror Bashan, President and CEO, Protalix Biotherapeutics: You’re gonna get can you repeat the last sentence?

Dan, Analyst, H.C. Wainwright: Just can you expand on how Protalix might utilize his experience in that avenue of, I I guess, general interest in business development and mergers and acquisition?

Dror Bashan, President and CEO, Protalix Biotherapeutics: So I would like to add. Gilat brings, I would say, deep experience or vast experience in multiple aspects and discipline of financial and business activity and know how and knowledge. Totralix right now is not planning as far as I know any mergers and acquisitions. We are focusing on growing our pipeline right now. If there will be a small licensing deal, it would be very small.

Are not going to, I mean, there will be an opportunity, I’m not familiar at this stage. I would like to explain, we are not opening now with an avenue of mergers and acquisitions. This is not the case. We will grow our companies through internal and I would say inorganic, hopefully a couple of programs, but it will be done in a gradually and responsible manner.

Dan, Analyst, H.C. Wainwright: All right.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you This so does not mean that Gilad or anyone else on the management does not have experience in business development measures. But let’s leave these big words. We are not in a situation and we open it. I hope we operate in a responsible and rational way. We’re not going to risk the company.

It will not happen.

Conference Operator: The next question is from Dhar Barshes, a private investor. Please go ahead.

Dhar Barshes, Private Investor: Yes. Good morning, gentlemen. Eel, thank you so much for your dedicated service over the past six years. We appreciate it. Can you please give me an idea of what the remaining value of our contract with Kiese is, please?

Eyal Rubens, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: So, you know, other than a, you know, the numbers were never public, but just to give a sense and since it’s in our presentation and I’ve mentioned it on calls, other than the royalties, as know, mentioned, then we have it also in our presentation. We believe that the sales of KSD are going to exceed $100,000,000 by 02/1930. On the regulatory and commercial milestones, we believe again, on the projected 2030 market and based on their penetration and the market share that they are sharing with us, forecasted market share they are sharing with us, we believe that the Totalix can be entitled up to half a billion dollars in milestone, both commercial and regulatory. But again, it’s far out we’re talking about, you know, by 2030 and it all depends on the market and then penetration, but those can be achievable numbers.

Dhar Barshes, Private Investor: Thank you.

Eyal Rubens, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: You’re welcome and thanks for the kind words.

Conference Operator: There are no further questions at this time. I would like to turn the floor back over to Dror Bashan for closing comments.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you. So thank you all for joining the call today. We truly appreciate your trust and continued support of shareholders, and we look forward to keeping you updated on our progress in the future, of course. So thank you very much.

Conference Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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