Protalix BioTherapeutics posts 24% revenue growth year-to-date, maintains strong cash position while advancing key clinical pipeline initiatives

OPERATOR - (00:01:24)

Greetings and welcome to the Protalix BioTherapeutics third Quarter Financial and Business Results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Moyer, Investor Relations. Thank you, sir. You may begin.

Mike Moyer - Investor Relations - (00:01:57)

Thank you. One moment please. Thank you, Operator. And welcome to The Protalix BioTherapeutics third quarter 2025 financial results and Business Update conference call. With me today are George Bashan, CEO of Pertalix and Gilad Mamlock, 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 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 in the Protalix filings and with the US securities and Exchange Commission. I will now turn the call over to Mr. George Bashan.

George Bashan - Chief Executive Officer - (00:03:15)

Thank you Mike and thank you everyone for joining this call. I will begin by reviewing our recent accomplishments. Following my remarks, Gilad will provide a detailed review of our quarterly and year to date financial results and then we will open the line for your questions. We are pleased to report another strong quarter and a solid year to date performance. For the first nine months of 2025, total revenues were 43.6 million, representing a 24% increase compared to the same period last year. Our total revenues for the third quarter were $17.9 million which reflects a decrease of 1% compared to the same period of 2024. We recognize revenues from sales of our products to Chiesi, Pfizer and Fiacros in Brazil and their purchases vary from as they control their own inventories. Overall, these revenues reflect the continued commercial success of our enzyme replacement therapies and provide a strong foundation to support our research and development efforts. On the regulatory front, as we have announced previously, Chiesi with our corporation has formally requested the re examination of the negative opinion issued in October by the Committee of Medicinal Products for Human Use CHMP regarding the proposed every four weeks dose regimen for refabrio. In Europe. There should be no misunderstanding. This process has nothing to do with the currently approved every two weeks regiment and the May 2023 approval of the every two weeks regiment in the EU is unaffected and Elfabrio remains available to patients in the eu. We remain confident in Elfabrio's long term potential and we are working closely with Chiesi to provide additional data in context to support the re examination of the once in four weeks regimen which we believe could offer meaningful benefits to patients and caregivers. Turning to our pipeline, we are particularly excited about PRX-115, our recombinant PEGylated uricad candidate under development for the potential treatment of uncontrolled gout. Preparations for the Phase 2 clinical trial are well underway. We filed our IND for the Phase 2 clinical trial of PRX-115 in October of this year and the IND has become effective following the FDA standard 30 days review period. We continue our plans to initiate the trial later this year. Based on the encouraging first in human data from our phase 1 clinical trial of PRX-115, we believe it has the potential to be best in class therapy within with a long acting profile that could improve patient compliance and outcomes. If successful. This program represents a significant opportunity in the market with a high unmet need. We look forward to updating you about the trial as data becomes available. Finally, I would emphasize that our operating strategy remains focused on three pillars driving commercial success with El Fabulo, advancing PRX-115 and other early stage pipeline program programs and maintaining financial discipline. With a strong cash position and positive quarterly net income, we are well positioned to execute on these three priorities. Before we turn to the financial results, I want to introduce Gilad Mamlok to this call. Gilad began serving as Protalik's Chief Financial Officer in August of this year and this is his first earning call for the company. I'm sure that I speak for everyone on this call and I wish you much success in the new position. Welcome Gilad and I'll now turn the call over to you to present detailed review of our financial results.

Gilad Mamlok - (00:07:06)

Gilad please thank you Duval and good morning everyone. Total revenues from selling Goods for the nine months ended September 30, 2025 were 43.1 million, an increase of 8.3 million or 24% compared to the 34.8 million for the same period in 2024. These revenues consist of 18.6 million in sales of Elfabrio to Chiesi, 15.4 million in sales Fabryz to Pfizer and 9.1 million in sales of Elelyso, the Fiacrus in Brazil. Total revenues from selling goods for the three months ended September 30, 2025 was 17.7 million, a decrease of 0.1 million or 1%, compared to 17.8 million for the same period In 2024. These revenues consist of 8.8 million in sales of Chiesi to Chiesi of El Fabio, 2.8 million in sales for Elisa to Pfizer, and 6.1 million from sales of Elelyso to Fiocruz in Brazil. As Rob mentioned, we recognize revenues from sales of our products to our partners Chiese, Pfizer and Fiocruz in Brazil, and the individual purchases change from quarter to quarter as each of our partners control its own inventories. As a result, the orders we receive from our partners may not be timed in relation to the pace of patient acquisition and retention and accordingly our product sales to our partner may not reflect patient demand for the product. We recorded revenues from licensed and R and D services of 0.5 million for the nine months ended September 30, 2025, an increase of 0.1 million compared to 0.4 million for the same period in 2024. For the three months ended September 30, 2025, we recorded revenues from license and R&D services of 0.2 million, an increase of 0.1million compared to 0.1 million for the same period in 2024. Revenues from licensed and RD services are comprised mainly of revenues we recognize in connection with our license and supply agreement with Chiesi. Other than potential regulatory milestone payments that may become payable, we expect to generate minimal revenues from license hours now that we have completed the clinical development of El Fabio. Cost of goods sold for the nine months ended September 30, 2025 was 22.4 million, up 2 million or 10% from 20.4 million for the same period last year, reflecting increased sales to Chies and Pfizer for the nine month period, partially offset by decreasing sales to vehicles. For the three months ended September 30, 2025, cost of goods sold was 8.3 million, a decrease of 0.1 million, or 1% from 8.4 million for the same period in 2024. The decrease was mainly the result of the decrease in sales to Keri and Pfizer for the quarter, partially offset by the increase in sales to fuel goods. Research and development expenses for the nine months ended September 30, 2025 totaled 13.9 million an increase of 5.1 million or 58% compared to 8.8 million for the prior year period. For the three months ended September 30, 2025, total research and development expenses were approximately 4.5 million, an increase of 1.5 million or 50% compared to 3 million for the same period of 2024. The increase of both the three and nine months period was mainly due to preparations for our planned Phase II clinical trial of PRX115 which we view as a strategic investment in our pipeline and long term growth. Selling general administrative expenses for the nine months ended September 30, 2025 were 8.2 million, down 1 million or 11% from 9.2 million for the same period last year. The decrease resulted mainly from lower salary and selling expenses. For the three months ended September 30, 2025, selling general administrative expenses were 2.9 million, an increase of 0.3 million or 12% compared to 2.6 million for the same period in 2024. The increase resulted mainly from an increase of $0.1 million in salary and related expenses, an increase of 0.2 million in selling expenses. Financial income net was 0.01 million for the nine months ended September 30, 2025 compared to financial income net of 0.1 million for the same period in 2024. The decrease resulted mainly from exchange rate cost and lower interest income and bank deposits which was partially offset by lower notes interest expenses due to September 2024 repayment in full of all the outstanding principal and interest payable under our then outstanding convertible promissory Note or the 2024 Notes. For the three months ended September 30, 2025, financial income net was 0.1 million compared to financial expenses net of 0.1 million for the same period in 2024. The difference resulted mainly from lower notes, interest expenses Due to the September 2024 repayment in full of all the outstanding principal and interest payable under the 2024 notes. We recorded tax expenses of approximately 0.3 million for the nine months ended September 30, 2025 compared to tax expenses of approximately 0.4 million for the same period in 2024. For the three months ended September 30, 2025, we recorded a tax benefit of approximately 0.1 million compared to tax expenses of approximately 0Point6 million for the same period in 2024. Our tax expenses and benefits result mainly from taxes on guilty income under the U.S. tax Cut and Job Acts of 2017. The U.S. one big beautiful bill act, which was signed into law on July 4, 2025 and includes a restoration of the current deductibility for domestic resource expenditure beginning in 2025 with transition options for previously capitalized amounts. We recorded a Net loss of 1.1 million for the nine months period ended September 30, 2025 or $0.01 per share basically diluted compared to a net loss of 3.6 million or $0.05 per share for the same period in 2024. For the three months ended September 30, 2025, net income was approximately 2.4 million or $0.03 per share basic and diluted compared to net income of 3.2 million or $0.04 per share basic and $0.03 per share diluted period in 2024. At September 30, 2025, we had 29.4 million in cash and cash equivalents and short term bank deposits which we believe are sufficient to satisfy our capital needs for at least 12 months from the date we issue our quarterly report for the quarter ended September 30, 2025. Overall, these results reflect strong execution and financial discipline as we continue to invest in our pipeline while maintaining a solid balance sheet. Vol. Back to you.

George Bashan - Chief Executive Officer - (00:14:19)

Thanks Gilad. To conclude, we are proud of our progress over the course of 2025. So far we delivered strong year to date financial performance. We advanced PRX115 towards a Phase 2 initiation and continue to strengthen our commercial foundation with El Fabrio. We believe these achievements position protardix for the long term growth and value creation. We appreciate your continued support and look forward to updating you on our progress in the coming months. Operator, please open the line for questions.

OPERATOR - (00:14:51)

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. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Ram Selvarju with HC Wainwright. Please proceed with your question.

Ram Selvarju - Equity Analyst - (00:15:25)

Thanks so much for taking my questions and congratulations on all the recent progress. I first of all wanted to ask if you could provide us with any granularity regarding the timeline for the anticipated reexamination of the CHMP opinion on the every four week dosing regimen of El Fabrio. Secondly, I wanted to see if you had any additional comments on the evolving competitive landscape in treatment refractory gout and what implications this may have for the ultimate size of the commercial opportunity for PRX115. And then lastly with respect to ongoing financial reporting, I was just wondering if you anticipate further predictability of the royalty based revenue recognition related to El Fabrio sales going forward or if you anticipate any additional sources of volatility that may impact how you recognize revenue stemming from sales of El Fabrio. Thank you.

George Bashan - Chief Executive Officer - (00:16:34)

Thank you Ram. So I will answer you one by one if it's okay on the one in four weeks re examination request, we expect to have an answer on Q1 of 2026 and of course we'll update accordingly. This is one with regard to the gout. Indeed there are Multiple developments, mainly EuroT1 mechanism of action based, if I may say. When we look at the gout market we see or we foresee a significant increase in the overall gout market in the next five, six years. And we think that within the uricases or the uncontrolled gout patients that required uricases, it will grow as well. And if indeed our phase two will be successful. So potentially we have a product that can take very nice market share from this, I would say increased pool on the third one. You know, we continue Gilad will add if there are any with tap. Of course you know, we continue to recognize what we sell to Chiesi's inventory. I'm not aware of any major change. Chiesi does well on the market. We are optimistic when we look into the future and this is it.

Gilad Mamlok - (00:17:55)

I would just add to that Ram, that we have good predictability in terms of our revenues and we do hope to give some more visibility also in our annual report. But as you know, we are limited in what we can say given our agreement with Chiesi and Chiesi is a privately held company.

Ram Selvarju - Equity Analyst - (00:18:17)

Thank you very much for all of those responses. I just had one other quick one maybe for Gilad regarding the cash Runway guidance. I just wanted to clarify whether this is based solely on the expenditures, the operating expenditures that you expect, or if this is factoring in the continued receipt of royalty based revenue on El Fabrio.

Gilad Mamlok - (00:18:45)

It's based on both and as I said, we have good predictability regarding the royalty stream.

Ram Selvarju - Equity Analyst - (00:18:54)

And this includes of course the expenses associated with the phase two trial on PRX 115. Right?

Gilad Mamlok - (00:19:02)

Definitely.

Ram Selvarju - Equity Analyst - (00:19:03)

Okay, thank you.

George Bashan - Chief Executive Officer - (00:19:04)

Thank you Ram.

OPERATOR - (00:19:08)

Our next question comes from John Van der Moysen with Zax, please proceed with your question.

John Van der Moysen - Equity Analyst - (00:19:15)

Thank you and hi door and welcome to the call. Gillard, regarding the CHMP decision on the every four week dosing, does it make sense to run a new trial to get the information that the EMA might be looking for to get that different dosing regimen, assuming that they don't find a favorable decision?

George Bashan - Chief Executive Officer - (00:19:42)

Okay. Right. Now, you know Kezi submitted a request for re examination. They will put their arguments together in, in the coming months and then there will be discussions within the CHMP and the verdict will be given. Of course, as I mentioned in Q1 of 2026. If it's positive, great. If it's not positive, Chiesi will discuss internally and we'll take a decision.

John Van der Moysen - Equity Analyst - (00:20:09)

Okay. And it sounds like you're still on track for start of the trial for PRX115 before the end of the year. What does the timeline look like for. That. If you get started in the next few weeks in terms of top line readout and enrollment and everything?

George Bashan - Chief Executive Officer - (00:20:27)

Yes, indeed. We plan to start screening patients in few weeks in Q3 of 2027. We expect top line results.

John Van der Moysen - Equity Analyst - (00:20:37)

Okay. And you've identified there's. You want to have several different assets in your development pipeline and I know you have three right now listed. I was just wondering what's emerging as a follow on to PRX 115 as another candidate.

George Bashan - Chief Executive Officer - (00:20:53)

So we hope to update the market soon, you know, PRX119. I hope that we will be if indeed we'll pass all the models and the tests that we are going through or the final test we will update about the mechanism of action at the specific indication.

John Van der Moysen - Equity Analyst - (00:21:09)

Okay, and then a last one for me. I know you've been getting a few additional approvals in different geographies for Chiesi. Has new approvals. Has anything emerged recently since the last update in terms of that?

George Bashan - Chief Executive Officer - (00:21:25)

I'm not aware that anything significant or something I'm aware of.

John Van der Moysen - Equity Analyst - (00:21:31)

Okay, thank you, George.

George Bashan - Chief Executive Officer - (00:21:33)

There is a long list. There is a long list of Market SCs under Submission or planning to submit, you know, for the next few years to come. So we are not concerned on this front. This is part of the further expansion of Alfabrio globally.

John Van der Moysen - Equity Analyst - (00:21:48)

Sounds good. And I guess you'll disclose that as it happens. I know it's in the past. You've disclosed that in the queue.

George Bashan - Chief Executive Officer - (00:21:55)

Yes, yes. We will disclose it accordingly and properly.

John Van der Moysen - Equity Analyst - (00:22:00)

Great, thank you.

George Bashan - Chief Executive Officer - (00:22:02)

You're welcome.

OPERATOR - (00:22:07)

Our next question comes from Ophel Minckes. Please proceed with your question.

Ophel Minckes - (00:22:14)

Hi, I'm just an individual investor But I have a couple of questions for you. Number one is there seems to be a pattern of basically receivables going up at the end of the year and then being cleaned up at Q1. Now so far, $9.9 million has been basically paid off from the Q3, the end of Q3 receivables. And basically from what I've seen, looks like the Brazil and the Pfizer amount that have been sold this year are basically probably 5%, 4, 5% above the whole of last year. And assuming that they have about 10% growth, that means that they haven't got much, well, a lot of orders to get this year. Now based on these assumptions, I mean, is there any kind of indication of like what kind of numbers you could be doing with CSV? I mean, what is your capacity based on royalties being paid every time that you basically sell a product to CSV? Is there any kind of ballpark number or something like that? That would be question number one. Question number two is, do you guys have any kind of anticipated the R and D growth during the phase two of the 115? Because you guys are looking at a fully sizable phase two, which is actually pretty nice because you can prove your candidate pretty nicely with that, but that's costing a lot of money. So, I mean, I have a lot of other questions, but I'm going to stop at that so that you guys can have some time to actually take it over and answer. Thank you.

Gilad Mamlok - (00:24:22)

Sure. So regarding the first question of field and we are not providing guidelines as noted, and also in terms of our revenue, you know, something we mentioned is that we are buying to the inventory. So if you look at the revenues, there is no direct link. Of course there is a link, but there is no direct link between the revenues and the revenues of Kezzi, for example, because if Kezzi is buying to the inventory in the last quarter of 2024, just for the example, then they may buy less in the first quarter and vice versa. So it may be a bit misleading to try to relate that directly. I can tell you that they keep growing without providing any guidance. And then numbers which we cannot give, I can say that they are going nicely. The way we see that in terms of the R and D growth, yes, definitely we take this expense into account, the PRX115 and as we said, we have enough cash for more than and to fund this trial.

OPERATOR - (00:25:29)

Our next question comes from John Van der Moysen with Zacks. Please proceed with your question.

John Van der Moysen - Equity Analyst - (00:25:34)

Great, thanks for letting me ask another one. You know, the last question maybe wonder what your guide or what your thoughts are in terms of cash burn for 2026 and how that might split between R and D&SGA.

Gilad Mamlok - (00:25:52)

So as we said already John, we cannot provide guidance at that stage. Okay.

John Van der Moysen - Equity Analyst - (00:25:57)

Even for your costs.

Gilad Mamlok - (00:26:01)

Correct. But what we did say is that and I also replied to the previous question, we said that we have enough cash for more than 12 months and we of course we have in mind that we are funding the PRX115 phase to try. Okay.

John Van der Moysen - Equity Analyst - (00:26:16)

All right. Thank you.

OPERATOR - (00:26:21)

We have now reached the end of our question and answer session. I would now like to turn the floor back over to door for closing comments.

George Bashan - Chief Executive Officer - (00:26:29)

So thank you everybody for the time and we will keep updating you and we will connect next quarter please. Thank you.

OPERATOR - (00:26:38)

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.