On August 16, 2021 Protalix BioTherapeutics, Inc. (NYSE American: PLX) (TASE: PLX), a biopharmaceutical company focused on the development, production and commercialization of recombinant therapeutic proteins produced by its proprietary ProCellEx plant cell-based protein expression system, reported financial results for the second quarter ended June 30, 2021 and provided a financial and business update (Press release, Protalix, AUG 16, 2021, View Source [SID1234586642]).
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"We continue to work closely with the FDA to address the issues raised in the Complete Response Letter received in April for PRX-102 for the proposed treatment of adult patients with Fabry disease," said Dror Bashan, Protalix’s President and Chief Executive Officer. "We look forward to the meeting with the FDA, which has been scheduled for September 9, 2021. In addition, we strengthened our balance sheet by entering into definitive agreements with a majority of our institutional note holders relating to exchanges by such note holders of a total of $54.65 million principal amount of our outstanding 7.50% Senior Secured Convertible Notes due 2021 for an aggregate of $28.75 million principal amount of newly issued 7.50% Senior Secured Convertible Notes due 2024, $25.90 million in cash and accrued and unpaid interest through the closing date. We plan to close the exchanges as soon as practicable. This transaction will allow us the use of our cash resources to continue to realize the PRX-102 potential and advance our early-stage pipeline. We are grateful for the continued support from our team members and external partners and look forward to a productive finish to 2021."
2021 Second Quarter and Recent Business Update
Regulatory Updates
On April 28, 2021, the Company, together with its development and commercialization partner, Chiesi Farmaceutici S.p.A., or Chiesi, announced the receipt of a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding the Biologics License Application (BLA) seeking accelerated approval of pegunigalsidase alfa, or PRX-102, for the proposed treatment of adult patients with Fabry disease. The CRL did not report any concerns relating to the potential safety or efficacy of PRX-102 in the submitted data package.
On August 2, 2021, the Company announced that a Type A meeting request was submitted to the FDA to discuss the CRL dated April 27, 2021 regarding the BLA for PRX-102 for the proposed treatment of adult patients with Fabry disease. The FDA has scheduled the Type A meeting for September 9, 2021.
Clinical Advancements
On June 2, 2021, the Company, together with Chiesi, announced initial top-line results from an interim analysis of the phase III BALANCE clinical trial, a study designed to evaluate the safety and efficacy of 1 mg/kg of PRX-102 dosed every two weeks compared to agalsidase beta (Fabrazyme).
Based on the interim analysis of the 12-month data generated from the BALANCE study, and in combination with previously reported positive data from the phase III BRIGHT and BRIDGE clinical trials of PRX-102, Protalix and Chiesi intend to submit a Marketing Authorization Application (MAA) to the European Medicines Agency for the review of PRX-102 for the proposed treatment of Fabry disease, subject to a positive meeting with the EMA rapporteur.
Corporate & Financial Developments
On August 12, 2021, the Company entered into definitive agreements relating to exchanges of an aggregate of $54.65 million principal amount of the Company’s outstanding 7.50% Senior Secured Convertible Notes due 2021 for an aggregate of $28.75 million principal amount of newly issued 7.50% Senior Secured Convertible Notes due 2024 (the "Exchange Notes"), $25.90 million in cash and accrued and unpaid interest through the closing date. The exchanges are expected to close as soon as practicable, subject to satisfaction of certain closing conditions. At closing, we will have reduced our debt by $28.75 million and effectively extended the maturity for substantially all of the remaining debt from 2021 until 2024. The support and willingness of our note holders to extend the maturity underscores their confidence in our core technology and expanding pipeline.
On May 13, 2021, the Company and Chiesi entered into a binding term sheet pursuant to which they amended the two exclusive license and supply agreements for PRX-102 in order to provide the Company with near-term capital. Chiesi agreed to make a $10.0 million payment to the Company before the end of the second quarter in exchange for a $25.0 million reduction in a longer-term regulatory milestone payment in the Ex-U.S. Exclusive License and Supply Agreement. All other regulatory and commercial milestone payments remain unchanged. The Company and Chiesi also agreed to negotiate certain manufacturing related matters. The $10.0 million payment was received in June 2021.
On July 2, 2021, the Company entered into an ATM Sales Agreement with H.C. Wainwright & Co., LLC (the agent) whereby the Company may sell, from time-to-time, shares of its common stock through the agent up to an aggregate offering price of $20.0 million. Upon execution of the sales agreement, the Company terminated the ATM Equity Offering Sales Agreement it had previously entered into with BofA Securities, Inc.
Second Quarter 2021 Financial Highlights
The Company recorded revenues from selling goods of $3.2 million during the three months ended June 30, 2021, a decrease of $0.4 million, or 11%, compared to revenues of $3.6 million for the same period of 2020.
Revenues from license and R&D services for the three months ended June 30, 2021 were $3.2 million, a decrease of $4.1 million, or 56%, compared to $7.3 million for the same period of 2020. Revenues from license and R&D services are comprised primarily of revenues the Company recognized in connection with its license and supply agreements with Chiesi. The decrease resulted primarily from an updated costs estimation throughout the trials until completion in the amount of $4.1 million and from revenues recognized in connection with the progress of the Company’s clinical trials that have been completed during 2020.
Cost of goods sold for the three months ended June 30, 2021 was $4.7 million, an increase of $2.9 million, or 161%, compared to $1.8 million for the same period in 2020. The increase in cost of goods sold was primarily the result of certain one-time manufacturing costs incurred while preparing for the then anticipated FDA approval of the PRX-102 BLA.
Research and development expenses for the three months ended June 30, 2021 were $7.7 million, a decrease of $1.5 million, or 16%, compared to $9.2 million for the same period of 2020. The decrease was primarily the result of the completion of two out of the three phase III clinical trials of PRX-102 and reduced costs related to the BALANCE study. The Company expects research and development expenses to continue to be its primary expense as it enters into more advanced stages of preclinical and clinical trials for certain of its product candidates.
Selling, general and administrative expenses for the three months ended June 30, 2021 were $3.2 million, an increase of $1.0 million, or 45%, compared to $2.2 million for the same period in 2020. The increase resulted primarily from an increase in corporate costs related to insurance and funding.
Financial expenses, net were $2.1 million for the three months ended June 30, 2021 and $1.9 million for the three months ended June 30, 2020. The increase resulted primarily from an increase in the amortization of debt issuance costs and debt discount.
Cash, cash equivalents and short-term bank deposits were approximately $76.9 million at June 30, 2021.
Net loss for the three months ended June 30, 2021 was approximately $11.2 million, or $0.25 per share, basic and diluted, compared to a net loss of $4.2 million, or $0.13 per share, basic and diluted, for the same period in 2020.
Conference Call and Webcast Information
The Company will host a conference call today, August 16, 2021 at 8:30 am Eastern Daylight Time, to review the clinical, corporate, and financial highlights, which will also be available by webcast. To participate in the conference call, please dial the following numbers prior to the start of the call:
Conference Call Details:
The conference call will be webcast live from the Company’s website and will be available via the following links:
Webcast Details:
Company Link: View Source
Webcast Link: View Source
Please access the websites at least 15 minutes ahead of the conference to register, download and install any necessary audio software.
The conference call will be available for replay for two weeks on the Events Calendar of the Investors section of the Company’s website, at the above link.