Earnings call transcript: Protalix Q4 2024 sees 31% revenue growth

Protalix Biotherapeutics Inc (NASDAQ: PLX) reported its fourth-quarter 2024 earnings, showcasing a significant 31% increase in total revenues compared to the previous year. Despite a decline in net income, the company’s innovative pipeline and strategic partnerships have bolstered investor confidence, resulting in a 7.14% premarket stock surge to $2.40. According to InvestingPro data, the company has demonstrated remarkable momentum with a 103.64% price return over the past six months.

Key Takeaways

• Protalix’s total revenue increased by 31% year-over-year to $53 million.
• Net income decreased to $2.9 million from $8.3 million in 2023.
• The stock price rose 7.14% in premarket trading following the earnings announcement.
• Strategic focus on rare diseases and partnerships with Chiesi and others continue to drive growth.

Company Performance

Protalix demonstrated strong performance in Q4 2024, with total revenues reaching $53 million, marking a 31% increase from the previous year. The revenue growth was driven primarily by sales of goods, which also saw a 31% increase. However, revenues from license and R&D services dropped significantly by 98%, indicating a shift in revenue streams. The net income fell to $2.9 million, or $0.04 per share, from $8.3 million in 2023, reflecting increased investments in R&D and strategic initiatives.

Financial Highlights

• Total revenue: $53 million, up 31% year-over-year.
• Net income: $2.9 million, down from $8.3 million in 2023.
• Earnings per share: $0.04.
• Cash and equivalents: $34.8 million as of December 31, 2024.

Market Reaction

Protalix’s stock experienced a notable 7.14% increase in premarket trading, reaching $2.40. This surge is attributed to the company’s robust revenue growth and strategic advancements in its product pipeline. The stock’s performance is particularly impressive considering its 52-week range, with a low of $0.821 and a high of $2.76, indicating investor optimism about the company’s future prospects. InvestingPro analysts have set ambitious price targets ranging from $14 to $15, suggesting significant potential upside. The stock has maintained strong momentum with a 68.42% return over the past year.

Outlook & Guidance

Protalix is set to advance its PRX-115 for uncontrolled gout into Phase II trials in the second half of 2025, with top-line results expected in approximately two years. The company continues to explore potential partnerships for PRX-115, contingent on successful Phase II outcomes. Despite not providing specific revenue guidance for 2025, Protalix remains focused on expanding its product development pipeline and strengthening its market position in rare diseases.

Executive Commentary

Dror Bashan, CEO of Protalix, stated, "2024 was an exciting year for Protalix as we are building our foundation for the future." He emphasized the strategic importance of the company’s collaboration with Chiesi, estimating potential revenues north of $100 million by 2030. Bashan also highlighted the positive trajectory of their partnership, describing it as "positively strategic to Protalix." InvestingPro data shows the company operates with a moderate level of debt, with a debt-to-equity ratio of 0.18, positioning it well for future growth initiatives. Subscribers can access over 10 additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research platform.

Risks and Challenges

• Declining revenues from license and R&D services could impact future growth.
• High costs associated with advancing clinical trials, such as the $20 million estimated for PRX-115 Phase II.
• Dependence on strategic partnerships, which may face unforeseen challenges.
• Market competition in the rare diseases sector could intensify.
• Regulatory hurdles and approval processes for new treatments could delay product launches.

Q&A

During the earnings call, analysts inquired about the progress of Chiesi’s patient additions to El Fabrio, with the company confirming steady growth. Questions also focused on the expected indication selection for PRX-119, anticipated within the next one to two quarters. Protalix did not provide specific revenue guidance for 2025, prompting discussions on future revenue streams and strategic priorities.

Full transcript - Protalix Biotherapeutics Inc (PLX) Q4 2024:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the Protalix Biotherapeutics Fiscal Year twenty twenty four Financial and Business Results Conference Call. As a reminder, this conference call is being recorded. I’ll now turn the conference over to your host, Mr. Mike Moyer of LifeSci Advisors Investor Relations for Protalix. You may begin your conference.

Mike Moyer, Investor Relations, LifeSci Advisors, LifeSci Advisors: Thank you, operator, and welcome to the Protalix Biotherapeutics fiscal year twenty twenty four financial results and business update conference call. With me today are Dhruv Bachand, President and CEO of Protalix and I. L. Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the financial results and corporate updates was issued this morning and is available now on the Pertallix website.

Please take a moment to read the disclaimer about 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 Portallax’s filings with the U. S.

Securities and Exchange Commission. I will now turn the call over to Mr. Michonne. Gerard?

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Mike, and thank you everyone for joining the fiscal year of 2024 financial results and business update call. I will begin by reviewing our accomplishments over the past year and recent progress. Following my remarks, Eyal will provide a detailed review of our financial results. We will then open the line for questions, of course. 2024 was a very good year for Protalix, as we brought a record revenues from our partners, fully repaid our outstanding debt and continue to focus R and D efforts on PRX115, PRX119 and other early stage candidates.

I would like to start with PRX-one hundred and fifteen, which is our recombinant pegylated uricase candidate in development for the treatment of uncontrolled gout. We produce PRX-one hundred and fifteen through our Procellix platform. As we have announced last quarter, we completed all cohorts in the first in human Phase one clinical trial of PRX115. This study was a double blind placebo controlled single ascending dose study designed to evaluate safety, tolerability, pharmacokinetics and pharmacodynamics following a single dose of PRX115 in subjects with elevated uric acid levels. The results from this study were presented in the late breaking poster at ACR Convergent Conference in November of twenty twenty four.

A copy of the poster is available in the publication section of the Protalix website. We are pleased with the results from this first study and believe they support moving forward into patients. To that end, we have been preparing for a Phase two clinical trial of PRX115 and have been in dialogue with regulatory authorities in The U. S. Regarding such a proposed trial.

Our goal is to initiate a Phase II study during the second half of this year. Turning now to El Fabrio. Throughout 2024, our commercial partner, Chiesi Global Rare Diseases, continued to increase its focus on El Fabrio and invest heavily in its medical and commercial program. In December of twenty twenty four, we and Kiesi announced that the European Medicines Agency or EMA validated the variation submission for PEGUNIGALCIDAR alpha to label an additional less frequent dosing regimen of two milligram per kg administered every four weeks in adult patients with Fabry disease in the European Union. The currently approved dose is one milligram per kg administered every two weeks.

This application was supported by a revised population PK model and a new exposure response analysis from the clinical data from the previously completed BRIGHT Phase III program, as well as its extension study. We look forward to working closely with both Chiesi and DMA throughout their review process. And I would like to emphasize that Chiesi deserves our sincere gratitude for their partnership with Protalix and their dedications to patients with Fabry disease. Our next pipeline candidate also being expressed for POSEVIX is PRX119. PRX119 is a PEGylated recombinant human DNase one product candidate in development for the potential treatment of diseases associated with neutrophil extracellular traps or NETs.

Preclinical studies are ongoing. As we have been discussing throughout the past year, we have been focusing our R and D efforts on early stage development assets to expand our product development pipeline. This includes leveraging our Parcelix 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 intend to continue this effort throughout 2025 and hope to provide you with further updates as these programs become more mature. For now, let me say that I’m excited about our R and D efforts and we are laying the groundwork for future developments that may be truly transformative.

Finally, in September of twenty twenty four, we repaid in full all of the outstanding principal and interest under our 7.5% senior secured convertible promissory notes. The repayment was financed entirely with available cash. In addition, since 12/31/2024, we have issued 908,000 shares of our common stock in connection with the exercise of warrants we issued in 2020, generating proceeds of approximately $2,100,000 The warrant expired on 03/11/2025. Accordingly, no warrants remain outstanding. This is significant for Protalix, making our balance sheet stronger and enable us to continue executing our strategy.

With that, it is now my pleasure to turn the call over to Eyal for review of our financials. Eyal, please.

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 fiscal year 2024 financials. We recorded revenues from selling goods of $53,000,000 for the year ended 12/31/2024, an increase of $12,600,000 or 31% compared to revenues of $40,400,000 for the year ended 12/31/2023. The increase resulted primarily from an increase of $11,800,000 in sales to Chiesi, an increase of $600,000 in sales to Brazil and an increase of $100,000 in sales to Pfizer. We recorded revenues from license and R and D services of $400,000 for the year ended 12/31/2024, a decrease of $24,700,000 or 98% compared to revenues of $25,100,000 for the year ended 12/31/2023.

Revenues from license and R and D services are comprised primarily of revenues we recognized in connection with our license and supply agreements with Chiesi. The revenues from license and R and D services for the year ended 12/31/2023, included the $20,000,000 regulatory milestone payment from Chiesi in connection with the approval by the U. S. Food and Drug Administration, the FDA of Elfabrio granted during the debt period. The remaining decrease resulted from the completion of our revenue generating research and development obligation with respect to Elfabrio and as Elfabrio was approved in The United States and the European Union in May 2023, from the completion of the regulatory process related to the review of the Biologic License BLA and the marketing authorization application, the MEA for Elfabrio by the FDA and EMA respectively.

As a result of the completion of the Fabry clinical program in 2023, we expect to generate minimal revenues from license and R and D services other than potential regulatory and commercial milestone payments. Cost of goods sold was $24,300,000 for the year ended 12/31/2024, an increase of $1,300,000 or 6% compared to cost of goods sold of $23,000,000 for the year ended 12/31/2023. The increase in cost of goods sold was primarily the result of increase in sales to Chiesi. In addition, during the year ended 12/31/2023, a portion of the costs for certain drug substance sold were recognized as research and development expenses, not cost of goods sold as such drug substance was produced as part of our research and development activities. For the year ended 12/31/2024, our total research and development expenses were approximately $13,000,000 comprised of approximately $7,100,000 of salary related expenses, approximately $2,400,000 subcontractor related expenses, approximately $900,000 of materials related expenses and approximately $2,600,000 of other expenses.

For the year ended 12/31/2023, our total research and development expenses were approximately $17,100,000 comprised of approximately $7,800,000 of salary related expenses, approximately $6,300,000 subcontractor related expenses, approximately $600,000 of materials related expenses and approximately $2,400,000 of other expenses. Total decrease in research and development expenses was $4,100,000 or 24% for the year ended 12/31/2024, compared to the year ended 12/31/2023. The decrease in research and development expenses resulted primarily from the completion of our Fabri clinical program and regulatory process related to the BLA and the MAA review of Infabrio by the applicable regulatory agency. Selling, general and administrative expenses were $12,200,000 for the year ended 12/31/2024, a decrease of $2,800,000 or 19% from 15,000,000 for the year ended 12/31/2023. The decrease resulted primarily from a decrease of $1,800,000 professional fees and approximately $1,000,000 in salaries and related expenses.

Financial income net was $200,000 for the year ended 12/31/2024 compared to financial expenses net of $1,900,000 for the year ended 12/31/2023. The difference resulted primarily from a decrease of approximately $1,400,000 in lower interest and related expenses due to the conversion of notes in 2023 and the September 2020 ’4 payment in full of the outstanding principal interest table under the remaining notes as well as an increased interest income net of $700,000 For the year ended 12/31/2024, we recorded income taxes of approximately $1,200,000 an increase of $900,000 or 300% compared to income taxes of $300,000 for the year ended 12/31/2023. The income taxes resulted primarily from the provision for the current taxes on income mainly derived from GILTI income, mainly respect of Section 174 of The U. S. Tax Cuts and Jobs Act or the TCJA.

Effective in 2022 Section 174 of the TCJA requires all U. S. Companies for tax purposes to capitalize and subsequently amortize R and D expenses that fall within the scope of Section 174 over five years for research activities conducted in The U. S. And over fifteen years for research activities conducted outside of The U.

S. Rather than deducting such costs in the current year. Cash, cash equivalents and short term bank deposits were approximately $34,800,000 at 12/31/2024. Net income for the year ended 12/31/2024, was approximately $2,900,000 or $0.04 per share basic and diluted compared to $8,300,000 or $0.12 per share basic and $0.09 per share diluted for the same period in 2023. I will now turn the call back to you, Dror.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Thank you, Eyal. To conclude, 2024 was an exciting year for Protalix as we are building our foundation for the future. We are gearing up for our anticipated Phase two study of our GALP candidate, PRX115, and we continue to make progress on our early stage R and D efforts. I’m confident that our strategy, balance sheet and three streams of revenues 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. Our first question comes from the line of Ram Selvaraju with H. C. Wainwright. Please proceed with your question.

Ram Selvaraju, Analyst, H.C. Wainwright: Hi. Thank you very much for taking my questions and congratulations on what has been an excellent and landmark year for Protelix. I wanted to first of all ask about, in the long run, what you expect to be able to provide in terms of revenue guidance based in particular on the royalty stream from El Fabrio and what you anticipate Chiesi would permit you to say about how the revenues from El Fabrio are progressing?

Dror Bashan, President and CEO, Protalix Biotherapeutics: The line was back. Can you repeat the question, please?

Ram Selvaraju, Analyst, H.C. Wainwright: Yes. It was specifically about revenue guidance. When you expect you might be able to be in a position to provide such guidance, particularly as it pertains to the royalty based revenue coming from El Fabrio and what you expect Chiesi to permit you to say about how revenues from El Fabrio are progressing?

Dror Bashan, President and CEO, Protalix Biotherapeutics: So first, thank you. You know, Kiesi is a private company. We have discussed it in the past. So we are not revealing data on the number of patients and or I would say estimated revenues from Kiesi. What we can say that they do well actually every week that passes they add patients on to El Fabrio globally.

We have reported now, if I may say, we think a nice outcome of revenues from different free streams, including Kiesi. Kiesi, along the years, will grow. Clearly, you can I mean, royalty most of the revenues will be based on royalty from Kiesi to Protalix, which is a higher margin? We say it also on our website. It is written over there that we estimate north to $100,000,000 in revenues from Kiesi at 02/1930, estimation of course, under what we see in front of our eyes.

If the ones in four weeks will fly, it’s a nice upside, will be higher of course. And we can as I mentioned, it’s a higher margin revenue. So as time goes by and it cannot be, I think, judged by the quarter, We have to be to understand that we sell to Kiese’s inventory. So we do not sell to their, I would say, direct sales. So in time, in a year and a half, two years, it will be more ongoing, if I may say, and then we can see a growing, I assume, we expect at least, steady stream of revenues of higher margin that what we sell to Brazil or to Pfizer from El Elizo.

Okay, great.

Ram Selvaraju, Analyst, H.C. Wainwright: And then we’ll

Dror Bashan, President and CEO, Protalix Biotherapeutics: So we will not and we cannot give guidance for 2025. As I mentioned, we sell to inventory and but again, just to emphasize, KSI does well. We are pleased with the picture and we consider this collaboration as positively strategic to Portallix.

Ram Selvaraju, Analyst, H.C. Wainwright: Great. And then with respect to PRX119, I was wondering if you could briefly delineate the differences between PRX119 and your historical program that I believe was designated PRX110. And also if you could provide us with some framework, some frame of reference regarding the size of the market opportunity in NETs that you previously mentioned for PRX119 going forward? Thank you.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Sure. So what I can say that PRX119 is actually a long acting DNRs. PRX-one hundred and ten was an acute one. We are finalizing as we speak, if I may say, the indication selection. We would like to finalize a couple of activities in addition to another, I would say, preclinical model.

And then we will update the market, I hope, within the coming one or two quarters. On the size, once we have the indication, we can update about the potential size at least.

Ram Selvaraju, Analyst, H.C. Wainwright: Okay. And then lastly, with respect to PRX115, I was just wondering if you could provide us with any details regarding the total aggregate cost of the Phase II study that you are running as well as the timeline to release of potential top line data as well as strategically what you anticipate doing assuming positive results from this study. Would you expect to take forward clinical development of this asset yourself or at that juncture look to identify a potential development and commercialization partner? Thank you.

Dror Bashan, President and CEO, Protalix Biotherapeutics: So currently, we plan to finance the Phase II without current means. And we have the means, as we mentioned, we have sufficient, if I may say, resources to finance our operations, including the early R and D and the Phase II of the 01/2015. About the cost, we see something, I would say, north to $20,000,000 on the third party’s expenses or expected payments. This is not including labor or internally. Don’t forget, we produce it with our own Proselex.

So, there is a portion which we do a significant portion by ourselves. As for top line results, we estimate something like two years from today, depends on the pace of enrollment, of course. Please understand, first patient in will be the second plan to be in the second half of this year. I assume that if indeed the outcomes will be positive, it makes sense that we look for a commercial partner.

Ram Selvaraju, Analyst, H.C. Wainwright: Thank you very much.

Dror Bashan, President and CEO, Protalix Biotherapeutics: Of course.

Conference Operator: Thank you. Our next question comes from the line of John Vandermosten with Zacks SCR. Please proceed with your question.

John Vandermosten, Analyst, Zacks SCR: Thank you. And Yael, do you have the 4Q El Fabio revenue number handy?

Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: They, I can pull them up. Go on, John.

John Vandermosten, Analyst, Zacks SCR: Yes. I’ll ask another one while you’re pulling that up.

Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: Okay.

John Vandermosten, Analyst, Zacks SCR: So on 01/2015, I saw you guys had a poster out. And I was wondering if you could elaborate on the mechanism of action for 04/2015 and its impact on the Urite crystals. Does it actually go after them or I just wanted some clarity on how that mechanism is?

Dror Bashan, President and CEO, Protalix Biotherapeutics: John, I don’t fully understand what you mean. Maybe you can define it differently.

John Vandermosten, Analyst, Zacks SCR: Sure. So PRX115, I was reading through the poster and it provided a small amount of detail on how it works. And I assume it eliminates the urate crystals or does it have some other mechanism of action of how it affects gallop? And I wanted to see if you had some clarity on that.

Dror Bashan, President and CEO, Protalix Biotherapeutics: What we use is a uricard from a certain source, which is different than KRYSTEXXA for the sake of our discussion. We have our I would say specific pack to cover the enzyme, which is covered, I would say, almost completely. What we see so far and I want to be careful in humans with hyper eurythema, which participated in the Phase one study that we reduce the uric acid in, I would say, quickly of course. And we see pretty long periods of time that actually the I would say the level of the uric acid is very low. Low.

Once we get into patients with, I would say, refractory gout or severe gout and have results, we can update about the fact of how it does with the TOFIs and the overall BDCs.

John Vandermosten, Analyst, Zacks SCR: Okay, great. And I just are you all able to find that? I know you’re going to file the 10 K later. I just was going to put it in my model.

Eyal Rubin, Senior Vice President and Chief Financial Officer, Protalix Biotherapeutics: 10 K was filed already by the way.

John Vandermosten, Analyst, Zacks SCR: Oh, it was? Okay. I didn’t see it. All right. Well, I’ll just find it there.

That’s all I had this morning. Thank you.

Conference Operator: Okay. Thank you. Ladies and gentlemen, there are no other questions at this time. I’ll turn the floor back to Mr. Bhashan for any final comments.

Dror Bashan, President and CEO, Protalix Biotherapeutics: So thank you and thank you everybody that joined the call. We hope to continue and provide good results in the following quarters of course. We see with high probability, I would say, a bright future for Protalix. So thank you very much.

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

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.