Protalix BioTherapeutics, Inc. (PLX) Earnings Call Transcript

Thank you.

Good morning, ladies and gentlemen, and welcome to the ProTallix Biotherapeutics Second Quarter 2026 Financial and Business Results Conference Call. As a reminder, this conference is being recorded. I will now turn the conference over to your host, Mr. Mike Moyer of LifeSci Advisors, Investor Relations for Protelix. Please go ahead.

Thank you, Operator, and welcome to the Pratalex Biotherapeutics Q2 2026 Financial Results and Business Update Conference Call. With me today are Dror Bashan, President and CEO, and Gilad Mamlok, Senior Vice President and Chief Financial Officer. Press release announcing the financial results and corporate updates was issued this morning and is available now on the Bratalex website. take a moment to read the disclaimer about forward-looking statements in the press release the earnings release and this conference the conference 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 Bertalix's filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Mr. Bichon.

Thank you, Mike, and thank you everyone for joining this morning. Our results today reflect the strengths of our profitable commercial partnerships and we remain confident in our outlook for this year. We enter the second half of 2026 with El Pablo Saves through Chiesi, continuing to drive growth of our business. We walked through the financial details, but the key driver in the first half was continued growth in El Fabio's revenues, together with the previously reported $25 million KIEZ milestone payment recognized in the first quarter of this year. El Fabio's sales through KIEZ continue to drive revenues from selling good. And this performance reflects further global penetration of El Fabrio and continued growth. This continued growth keeps us on track with our full year 2026 revenue guidance. global fabric market projected to reach approximately 3.2 billion dollars by 2031 and Fabri is positioned to capture 15 to 20 percent of these markets supported by our partnership with Chiesi which is strengthened by the recent approval the once every four weeks dosing regimen in Europe we believe that our revenue mix, particularly the continuing expansion of El Fabrio, position us well for success. sustained long-term value creation and profitability. On the clinical side, PRS115 continues to advance its claim. PRS115 is designed as a long-acting differentiated uric acid, and we believe it has the potential to meaningfully improve quality of life for patients with uncontrolled gout, which could be a significant inflection point and venue driver for prosthetics. There is a significant unmet need in this population, and we expect top-line results from our release study in the second half of 2027. Beyond PRX115, our strategy remains centered on rare renal diseases, where we believe our capabilities and platform offer a clear advantage, and we remain focused on execution across our partnerships and pipeline, and we believe our business model limits downside risks. preserving meaningful upside as we advance our clinical programs. With that, I will turn the call over to Gilad for a detailed review of our financial results and outlook. Gilad, please. Thank you, Drol. For the second quarter of 2026, total revenues were $19.9 million compared to $15.7 million in the second quarter of 2025. For the first half of 2026, total revenues were $53.6 million compared to $25.8 million for the first half of 2025. For the second quarter of 2026, revenues from selling goods were 19.8 million compared to 15.4 million in the second quarter of 2025, an increase of 4.4 million. For the first half of 2026, revenues from selling goods were 27.2 million compared to 25.4 million for the first half of 2025. an increase of 1.8 million. The increase was driven mainly by higher sales for Fabio Tocchiesi. For the remainder of the results, I will report only on the second quarter, and you can refer to this morning's press release for additional year-to-date data. The cost of revenues was $7.8 million compared to $5.9 million in the same period in 2025, an increase of $1.9 million. The increase was mainly attributable to higher sales volumes to Kiersey and Fiocruz, partially offset by lower sales to Pfizer. expenses were $4.4 million down from $6 million in the prior period, a decrease of $1.6 million. The decrease was mainly driven by There are 2.1 million runs recorded under the new R&D law as a reduction of R&D expenses. As of 2026, this grant is available for us under the R&D law on an ongoing basis. Expect to continue to incur expenses as the release study progresses and additional preclinical and clinical programs advance. SG&A expenses were 3.1 million, up 0.5 million from the prior year period, largely attributable to higher salary and related expenses. Minus income net was 0.2 million compared to financial expenses net of 0.5 million in the second quarter of 2025. The change was mainly due to exchange rate fluctuations. Taxes on income were 1.1 million compared to 0.5 million in the second quarter of 2025, an increase of 0.6 million. This increase resulted mainly from taxes on income derived from global intangible low-tax income, or GILTI, resulting from limitations under IFC Section 174. Net income for the quarter was 3.8 million or 5 cents per share basic and diluted compared to net income of 164,000 or zero dollars per share basic and diluted in the second quarter of 2025. Turning to the balance sheet, cash, cash equivalents, and short-term bank deposits, the total is $40.7 million as of June 30, 2026. We have no outstanding debt or warrants, providing us with substantial financial flexibility to support our continued pipeline advancements. As we have noted in prior quarters, our revenues can vary from quarter to quarter based on the timing of shipment and order from our partners. We believe it is more useful to evaluate our business on a full year basis, and we remain confident in our full year 2026 guidance. With that, I will turn the call back over to Paul. Thank you, Bilal. In closing, positive revenue trends keeps us firmly on track to meet our full year 2026 guidance. We have a strong cash position to maintain our operations and advance our clinical and preclinical assets. in the momentum behind our business and about the opportunities ahead. Now I will ask the operator to open the line for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 start keys. Our first question will come from Raj Haram Selurahu with HC Wainwright.

Hi, this is Yanzi sitting in for Ram Silvaraju. Thanks for taking my question. I have two. The first is, so your presentation highlights E4W without methotrexate and the E8W with NTX as the two differentiated profiles within release. What totality of evidence framework will determine which regimen advances to phase 3, and could a modest month 6 responder rate difference be outweighed by eliminating MTX or extending dosing to EAW?.

Can you repeat the question? Actually both. I mean if you manage to, as you see, one of the five houses without methotrexate, which can be a huge competitive edge, but also a lower frequency of using the drug is also a big advantage. And we potentially can have both.

Right, so okay, so yes, I'll repeat the question. My question is what totality of evidence will determine which regimen advances to phase three? And could a modest month six responder rate difference be outweighed by eliminating the methotrexate or extending dosing to every eight weeks?.

You know, we are running now the multiple dose studies on the phase two. We have to see the outcomes. And by the outcome, we can decide with which regimens we continue. It's difficult to tell you today. And under what we have from the mechanism of action and the data from the phase one and whatever we understand about the molecule and the regulation of the molecule and the outcomes we have so far, we think that these four arms, I'm not speaking about the placebo, could be met. Which one will be met better? you know, we have to consider there is an immunogenicity aspect, there is the IRR aspect, so it's not just the frequencies. But let's say under the assumption immunogenicity is good or low or whatever the definition is, and with a pretty low IRR, and then it's only about the frequency and or with or without metal tracks as we have to see.

Got it, understood. The other question I have is relating to the 10-K, which reports approximately about 50% of Phase 1 subjects who have developed ADAs. and that comes with lower incidence at higher doses. My question is, how did the combined PK, PD, and immunogenicity data support selecting that fixed 36 milligram dose, and what ADA profile and release would support every four weeks dosing without methotrexate?.

So, you know, we will, in phase two, we will have the, I would say, the ADA against the PEG, against the enzyme, so we'll have, I think, a clearer picture of the different and what are the outcomes of course, third the different arms. So now then we see where we are. Don't forget the phase two is the multiple dose. Phase one was a single ascending dose. We chose the 36 milligram according to one day, I would say the, the PKPD, if I may say, of course, and also under the assumption that this specific, I would say, regiment could beat the highest or the more, I would say, convenient, I would And by the way, for the patients, if I may say, both the once in four weeks without metotrexate and the once in eight weeks with metotrexate, which let's call them like the highest outcomes if possible.

Got it. Thank you so much for taking my questions. Cool. Thank you.

Our next question will come from John Vandermosten with ZACS SCR.

Great. Nice to hear from you guys, Dora Gulod. And congratulations on El Fabrio's patent term extension and the approval in South Korea. Things are going pretty good for that product. I want to start out with a question on – on just the trend in purchases of El Fabrio. I'm wondering, is there any benefit to having lumpy purchases? You know, because we had a nice increase this quarter. And I'm wondering, you know, is that due perhaps to the new approvals and certain geographies? Or is there some other reason in terms of like product run or some other reason why it makes sense to have lumpy rather than steady purchases of El Fabrio.