On May 14, 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 first quarter ended March 31, 2021 and provided a business update (Press release, Protalix, MAY 14, 2021, View Source [SID1234580019]).
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"While the receipt of the Complete Response Letter last month from the FDA was disappointing, we are encouraged that the FDA did not report any potential safety or efficacy concerns for PRX-102," said Dror Bashan, Protalix’s President and Chief Executive Officer. "We are working closely with the FDA and anticipate the required inspection and subsequent assessment will be completed once the FDA’s travel restrictions are lifted. We continue to advance our earlier stage pipeline and anticipate continued progress throughout 2021. We are grateful for the support of our clinicians, patients, shareholders, Board members, employees and external partners and look forward to building stockholder value," concluded Mr. Bashan.
2021 First 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. In the CRL the FDA noted an inspection of the Company’s manufacturing facility in Carmiel, Israel, including the FDA’s subsequent assessment of any related findings is required before the FDA can approve the BLA. Due to travel restrictions relating to the COVID-19 pandemic, the FDA was unable to conduct the required inspection during the review cycle. The FDA explained that it will continue to monitor the public health situation as well as travel restrictions, and is actively working to schedule outstanding inspections.
Clinical Advancements
On February 23, 2021, the Company, together with Chiesi, announced positive topline results from the phase III BRIGHT clinical trial, a study designed to evaluate the safety, efficacy and pharmacokinetics of PRX–102 treatment, 2 mg/kg every four weeks, in up to 30 patients with Fabry disease previously treated with a commercially available enzyme replacement therapy (ERT) (agalsidase alfa – Replagal or agalsidase beta – Fabrazyme). Topline results indicate that 2 mg/kg of PRX-102 administered by intravenous infusion every four weeks was found to be well tolerated among treated patients, and stable clinical presentation was maintained in adult Fabry patients.
Corporate & Financial Developments
Given the receipt of the CRL, the Company believes that it is prudent to secure short-term funds in order to continue development of PRX-102 while waiting for the FDA’s required inspection and subsequent assessment described in the CRL. To do so, 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 milestone 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-US 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.
On February 18, 2021, the Company announced the closing of a public offering of common stock raising gross proceeds of approximately $40.2 million before deducting the underwriting discount and estimated expenses of the offering.
On February 10, 2021, the Company entered into an exclusive partnership with SarcoMed USA Inc. for the worldwide development and commercialization of alidornase alfa, or PRX-110, for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis and other related diseases via inhaled delivery.
Financial Results
For the three months ended March 31, 2021, compared to the three months ended March 31, 2020
The Company recorded revenues from selling goods of $4.5 million during the three months ended March 31, 2021, a decrease of $0.5 million, or 10%, compared to revenues of $5.0 million for the same period of 2020. The decrease of $3.0 million in sales to Brazil was partially offset by an increase of $2.5 million in sales to Pfizer Inc. or Pfizer.
Revenue from licenses and R&D services was $6.8 million for the three months ended March 31, 2021, a decrease of $9.8 million, or 59%, compared to revenues from license and R&D services of $16.6 million for the same period in 2020. Revenues from license and R&D services are comprised primarily of revenues we recognized in connection with the license and supply agreements with Chiesi. The decrease resulted primarily from revenues for the three months ended March 31, 2020 recognized in connection with an updated costs estimation throughout the trials until completion, made in 2020, in the amount of $6.7 million and from revenues recognized in connection with the progress of our clinical trials that have been completed during 2020.
Cost of goods sold was $4.8 million for the three months ended March 31, 2021, an increase of $1.4 million, or 41%, from cost of goods sold of $3.4 million for the same period in 2020. The increase in cost of goods sold was primarily the result of higher manufacturing costs.
Research and development expenses were $7.1 million for the three months ended March 31, 2021, a decrease of $3.2 million, or 31%, compared to $10.3 million of research and development expenses for the same period of 2020. The decrease is primarily due to 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 a more advanced stage of preclinical and clinical trials for certain of its product candidates.
Selling, general and administrative expenses were $3.1 million for the three months ended March 31, 2021, a decrease of $0.1 million, or 3%, compared to $3.2 million for the same period of 2020.
Financial expenses, net were $1.8 million for the three months ended March 31, 2021, a decrease of $1.2 million, or 40%, compared to financial expenses net of $3.0 million for the same period of 2020. The decrease resulted primarily from a decrease in expenses related to the Company’s outstanding convertible notes equal to $1.3 million.
Cash, cash equivalents and short-term bank deposits were approximately $70.4 million on March 31, 2021. During the first quarter of 2021, the Company raised gross proceeds of $8.8 million from the sale of common stock under its ATM program and gross proceeds of $40.2 million via the public offering of its common stock.
Net loss for the three months ended March 31, 2021 was approximately $5.5 million, or $0.14 per share, basic and diluted, compared to a net income of $1.7 million, or $0.10 per share, basic and diluted, for the same period in 2020.
Conference Call and Webcast Information
The Company will host a conference call today, May 14, 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:
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.