Protalix BioTherapeutics, Inc. (PLX) CEO Dror Bashan on Q1 2022 Results - Earnings Call Transcript
May 16, 2022 9:48 AM ETProtalix BioTherapeutics, Inc. (PLX)
Protalix BioTherapeutics Inc. (NYSE:PLX) Q1 2022 Earnings Conference Call May 16, 2022 8:30 AM ET
Company Participants
Alexandra Schuman - LifeSci Advisors, IR
Dror Bashan - President & CEO
Eyal Rubin - SVP & CFO
Conference Call Participants
John Vandermosten - Zacks Small Cap Research
Operator
Good morning, ladies and gentlemen, and welcome to the Protalix First Quarter 2022 Financial and Business Results Conference Call. [Operator Instructions] I do reminder, this conference call is being recorded.
I will now turn the conference over to our host, Alexandra Schuman of LifeSci Advisors, Investor Relations for Protalix. You may begin your conference.
Alexandra Schuman
Thank you, operator and welcome to the Protalix BioTherapeutics’ first quarter 2022 financial results and business update conference call. With me today are Dror Bashan, President and CEO of Protalix, and Eyal Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the results and the update was issued this morning and is available now on the Protalix 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 the Protalix’ filings with the United States Securities and Exchange Commission.
I will now turn the call over to Mr. Dror Bashan. Dror?
Dror Bashan
Thank you, Alexandra, and welcome everyone to our first quarter 2022 financial results and business update call. I will begin with a review of our progress and accomplishments over the first quarter, along with our plans for the coming months. Following my remarks, Eyal will provide a more detailed review of our financial results. We will then open the line for questions, of course.
Let me begin with a summary of the positive topline results announced in April, from our Phase III BALANCE clinical trial of PRX-102 for the treatment of Fabry disease in the notes. We were very pleased to report that the trial successfully met its primary endpoint, and the data showed a favorable tolerability immunogenicity profile for PRX-102. We plan to provide the final analysis of the BALANCE study in the third quarter of this year. After we have completed all analysis and discussions of the collected data.
At our KOL event, which also took place in April, Dr. David Warnock from the University of Alabama at Birmingham described the BALANCE study, the topline results of the BALANCE study and our next steps. We also provided an overview of the $2 billion market Fabry market described the need for additional therapies and the potential of PRX-102 to meet a significant unmet need of the Fabry community patients.
The company together with its development and collaboration partner, Chiesi Global Rare Disease or Chiesi (ph) currently planning to resubmit the biological license application or BLA to the FDA in the second half of this year and continue to be on track to achieve that goal. It is intended that the BLA package will include the positive results from the company's three Phase III clinical trials, the BALANCE, BRIDGE and BRIGHT studies and of course, the company Phase I/II study, which was conducted before.
As announced, last October, after the company and Chiesi participated in a Type A, End of Review meeting with the FDA. The company and Chiesi gain clarity on the pathway for approval. The company believes the details compelling and consistent data sets from both treatment naïve and enzyme replacement therapy, experienced patients for inclusion in the BLA resubmission.
In Europe, we and Chiesi submitted the Marketing Authorization Agreement or MAA for the PRX-102 with European Medicines Agency or EMA on February 7, 2022, which was subsequently validated by the EMA. We believe Protalix is starting the transitional period. There were best data from the three Phase III studies, demonstrating the potential of PRX-102 to be a good treatment for patients with Fabry disease. We have full in-house manufacturing capabilities commercialization planning with our global partner Chiesi and a clear pathway [indiscernible] the anticipated approval of PRX-102.
Additionally, we have a pipeline of existing early stage program that we will -- highlighting as the progress in developing. Our strategy is to continue investing in new product candidates to support our goal of becoming global commercial world-class biopharmaceutical company. Finally, our balance sheet provide us with sufficient cash runway until Q3 of 2023, enough to support our claims for resubmission potential approval in addition to the continuing to develop our early stage pipeline. We continue advancing our early stage pipeline will show the progress made once available.
I will now turn to Eyal to review our financial results. Eyal, please go ahead.
Eyal Rubin
Thank you, Dror and thank you, everyone for joining today's call. Let me review our first quarter 2022 financials. For the quarter ended March 31, 2022 recorded revenues from selling of goods of $9 million, an increase of $4.5 million or 100% compared to revenues of $4.5 million for the same period of 2021. Revenues from license and R&D services for the quarter ended March 31, 2022 were $7.1 million compared to $6.8 million for the quarter ended March 31, 2021.
Revenues from license and R&D services represent, revenues -- the company recognized in connection with its license and supply agreement with Chiesi. Cost of goods sold was $6 million for the three months ended March 31, 2021, an increase of $1.2 million or 25% versus $4.8 million for the same period last year. The increase in cost of goods sold was primarily the result of higher sales.
Research and development expenses for the three months ended March 31, 2021 were $8.8 million, an increase of $1.7 million of 24% compared to $7.1 million for the same period last year. The increase is primarily the result of subcontractors costs related to the completion of the company's Phase III clinical trial of PRX-102 and maintaining of the company’s related extension study.
Selling, general and administrative expenses were $3.2 million for the three months ended March 31, 2022, an increase of $0.1 million or 3% versus $3.1 million for the same period last year. Financial expenses net were $0.4 million for the three months ended March 31, 2022 a decrease of $1.4 million or 78% compared to $1.8 for the same period last year. The decrease resulted primarily from lower interest and debt amortization costs due to a decrease in the total principal amount (ph) of the company's outstanding notes.
In the August 2021 exchange transaction, the company exchange in aggregate principal amount of $57.92 million of the 2021 Notes for cash and then aggregate principal amount of $28.75 million of new issue (ph) 2024 notes, effectively recurring the debt by about 50%. End of March 31, 2022 our cash, cash equivalents and short-term bank deposits were approximately $32.9 million compared to $39 million as of December 31, 2021. We believe that our current financial position provides us with sufficient cash runway through the third quarter of 2023.
I will now turn the call back to Dror.
Dror Bashan
Thank you, Eyal. So, thank you everyone for joining us on today's call. We look forward to the BLA submission in the U.S., hearing from the EMA on the MAA submission in Europe and working closely together with our partner Chiesi to successfully bring PRX-102 to the market. We are extremely excited by the opportunity ahead of us and looking forward to bringing this important potential treatment option for adult patients with Fabry disease.
Now, I will turn the call back to the operator and open the line for questions, please.
Question-and-Answer Session
Operator
Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of John Vandermosten with Zacks. Please proceed with your questions.
John Vandermosten
Thank you and good afternoon, Dror and Eyal. Hope you guys are doing well. I wanted to ask about the clock stop coming up pretty soon for the EMA submission. Does the EMA given an indication of things that they may ask prior to the clock stop or do you pretty much have to wait and see what they want to know?
Dror Bashan
We are waiting for the input.
John Vandermosten
Okay. Very good. Another thing related to the EU. Now the UK is last to EU. What's the process there to get access to that market. I think I looked at and I started about 900 individuals that might benefit from PRX-102. Is there anything additional needs to be done there or are they still kind of hanging on in terms of accepting approvals by the EMA?
Dror Bashan
So John this topic, I have to verify and get back to you maybe later today, tomorrow. Okay. I think I know the answer, but I prefer until your accurate (ph), okay, if it's, okay.
John Vandermosten
Okay. Yeah. No problem. I mean that's there is some kind of weird thing right now and I actually, I don't even know myself kind of help.
Dror Bashan
But it's a very good question, John. So, but I will get back to you shortly.
John Vandermosten
Sounds good. And let's see any -- I think you probably touched on this a little bit just anything that sticks out in your mind that needs to get done. Now that we're finished with the BALANCE trial for the FDA submission. I mean I guess you're just compiling information and putting together -- putting things together for that second half. Is there anything that sticks out in your mind that's particularly important there?
Dror Bashan
Everything is reported, if I heard to say, right (ph). So, indeed we are analyzing and finalizing the CSL (ph) of the BALANCE. Looking at all four clinical trials, [indiscernible] including all the safety data. We have many hundreds of years if I may say exposure on the drug, which is reflecting a very good safety profile and so it actually, just to look, if I may say to connect the dots and see the full picture and strengthened the totality of the data, if I may say.
John Vandermosten
Okay. Last one for me is just a finance cash flow question. Can you explain the difference between the net loss and the cash from operations, so the cash used in operations and what was attributable -- that difference was attributable to?
Eyal Rubin
Obviously, the net loss includes the depreciation, includes a non-cash such as the share-based compensation. Yeah, it's not transferred the one for one into the cash position. As we mentioned many times in the past, our quarterly net burn rate is approximately $6 million in the quarter. And I think that if you run the numbers, and that's where we are for the past two plus years.
John Vandermosten
Sure. Exactly. Okay, all right. Thank you so much. I appreciate it. That's all from me.
Dror Bashan
Thank you, John and I will get back to you.
Operator
Thank you. [Operator Instructions] There are no further questions at this time. And on behalf of Protalix, this does conclude today's teleconference. We do appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
AI
