Protalix BioTherapeutics Q3 2025 Earnings Call - Advancing PRX-115 Phase Two and Managing Elefabrio's Regulatory and Commercial Momentum

Conference Operator: Greetings and welcome to the Protalix BioTherapeutics third quarter financial and business results conference call. At this time, all participants are on a listen-only basis. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero 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, Protalix BioTherapeutics: 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 Dror Bashan, CEO of Protalix, and Gilad Memlock, 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. They 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 U.S. Securities and Exchange Commission. I will now turn the call over to Mr. Bashan. Dror?

Dror Bashan, CEO, Protalix BioTherapeutics: 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 Fiocruz in Brazil, and their purchases vary from quarter to quarter 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 cooperation, has formally requested a re-examination of the negative opinion issued in October by the Committee for Medicinal Products for Human Use, CHMP, regarding the proposed every four weeks dose regimen for Elefabrio in Europe. There should be no misunderstanding. This process has nothing to do with the currently approved every two weeks regimen, and the May 2023 approval of the every two weeks regimen in the EU is unaffected, and Elefabrio remains available to patients in the EU.

We remain confident in Elefabrio’s long-term potential, and we are working closely with Chiesi to provide additional data and 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 uricase candidate under development for the potential treatment of uncontrolled gout. Preparations for the phase two clinical trial are well underway. We filed our IND for the phase two clinical trial of PRX-115 in October of this year, and the IND has become effective following the FDA standard 30-day review period. We continue our plans to initiate the trial later this year.

Based on the encouraging first-in-human data from our phase one clinical trial of PRX-115, we believe it has the potential to be best-in-class therapy 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 Elefabrio, advancing PRX-115 and other early-stage pipeline 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 Memlock to this call.

Gilad began serving as Protalix 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 him much success in the new position. Welcome, Gilad, and I’ll now turn the call over to you to present a detailed review of our financial results. Gilad, please.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: Thank you, Dror, 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 Elefabrio to Chiesi, $15.4 million in sales of Elelyso to Pfizer, and $9.1 million in sales of Elelyso to Fiocruz in Brazil. Total revenues from selling goods for the three months ended September 30, 2025, were $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 Elefabrio to Chiesi, $2.8 million in sales of Elelyso to Pfizer, and $6.1 million from sales of Elelyso to Fiocruz in Brazil.

As Dror mentioned, we recognize revenues from sales of our products to our partners, Chiesi, Pfizer, and Fiocruz in Brazil, and the individual purchases change from quarter to quarter as each of our partners controls 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&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 licensed and R&D services of $0.2 million, an increase of $0.1 million compared to $0.1 million for the same period in 2024.

Revenues from licensed and R&D services are comprised mainly of revenues we recognize in connection with our licensed and supply agreement with Chiesi. Other than potential regulatory milestone payments that may become payable, we expect to generate minimal revenues from licensed R&D services now that we have completed the clinical development of Elefabrio. The 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 Chiesi and Pfizer for the nine-month period, partially offset by decrease in sales to Fiocruz. For the three months ended September 30, 2025, the 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 Chiesi and Pfizer for the quarter, partially offset by the increase in sales to Fiocruz. 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 for both the three and nine-month period was mainly due to preparations for our planned phase two clinical trial of PRX-115, which we view as a strategic investment in our pipeline and long-term growth.

Selling general and 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 and 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 costs and lower interest income and bank deposits, which was partially offset by lower notes interest expenses due to the 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 $0.6 million for the same period in 2024. Our tax expenses and benefits result mainly from taxes on GILTI income under the U.S. Tax Cut and Jobs Act 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 research expenditure beginning in 2025, with transition options for previously capitalized amounts. We recorded a net loss of $1.1 million for the nine-month period ended September 30, 2025, or $0.01 per share, basic and 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 for the same 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, this result reflects strong execution and financial discipline as we continue to invest in our pipeline while maintaining a solid balance sheet. Dror, back to you.

Conference Operator: 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 PRX-115 towards phase two initiation and continue to strengthen our commercial foundation with Elefabrio. We believe these achievements position Protalix BioTherapeutics 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.

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 Selvaraju with H.C. Wainwright. Please proceed with your question.

Ram Selvaraju, Analyst, H.C. Wainwright: 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 re-examination of the CHMP opinion on the every four-week dosing regimen of Elefabrio. 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 PRX-115. 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 Elefabrio sales going forward, or if you anticipate any additional sources of volatility that may impact how you recognize revenue stemming from sales of Elefabrio. Thank you.

Conference Operator: Thank you, Ram. I will answer you one by one if it’s okay. On the once-in-four-weeks re-examination request, we expect to have an answer in Q1 of 2026, and of course, we’ll update accordingly. This is one. With regard to the gout, indeed, there are multiple developments, mainly year-to-one mechanism of action base, 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 to six years. We think that within the uricases or the uncontrolled gout patients that require uricases, it will grow as well. If indeed our phase two will be successful, potentially we have a product that can take very nice market share from this, I would say, increased pool.

On the third one, we continue, Gilad will add if there are any, will tap, of course. 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. This is it.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: 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. As you know, we are limited in what we can say given our agreement with Chiesi, and Chiesi is a privately held company.

Ram Selvaraju, Analyst, H.C. Wainwright: 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 Elefabrio.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: It’s based on both. As I said, we have good predictability regarding the royalty stream.

Ram Selvaraju, Analyst, H.C. Wainwright: This includes, of course, the expenses associated with the phase two trial on PRX-115, right?

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: Of course. Yeah, that’s right. Yes. Definitely.

Ram Selvaraju, Analyst, H.C. Wainwright: Okay. Thank you.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: Thank you, Ram.

Conference Operator: Our next question comes from John Vandermosten with Zacks. Please proceed with your question.

Thank you. Hi, Dror, and welcome to the call, Gilad. 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 do not find a favorable decision.

Dror Bashan, CEO, Protalix BioTherapeutics: Okay. Right now, Chiesi submitted a request for re-examination. They will put their arguments together in the coming months, and then there will be discussions within the CHMP, and a 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 they will take a decision.

Conference Operator: Okay. It sounds like you’re still on track for a start of the trial for PRX-115 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?

Dror Bashan, CEO, Protalix BioTherapeutics: Yes, indeed, we plan to start screening patients in a few weeks. In Q3 of 2027, we expect top-line results.

Conference Operator: Okay. And you’ve identified 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?

Dror Bashan, CEO, Protalix BioTherapeutics: We hope to update the market soon. PRX-119, I hope that we will be, if indeed we pass all the models and the tests that we are going through or the final test, we will update about the mechanism of action and the specific indication.

Conference Operator: Okay. And then a last one for me. I know you’ve been getting a few additional approvals in different geographies for, or Chiesi has new approvals. Has anything emerged recently since the last update in terms of that?

Dror Bashan, CEO, Protalix BioTherapeutics: I’m not aware that anything significant or something I’m aware of.

Conference Operator: Okay. Thank you, Dror.

Dror Bashan, CEO, Protalix BioTherapeutics: There is a long list of markets Chiesi is under submission or planning to submit for the next few years to come, so we are not concerned on this front. This is part of the further expansion of Elefabrio globally.

Conference Operator: Sounds good. I guess you’ll disclose that as it happens. I know in the past you’ve disclosed them in the queue.

Dror Bashan, CEO, Protalix BioTherapeutics: Yes, yes. Yes, we will disclose it accordingly and properly.

Conference Operator: Great. Thank you.

Dror Bashan, CEO, Protalix BioTherapeutics: You’re welcome.

Conference Operator: Our next question comes from Ophel Menkes. Please proceed with your question.

Ophel Menkes, Individual Investor: 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 end of Q3 receivables. And basically, from what I’ve seen, it looks like the Brazil and the Pfizer amounts that have been sold this year are basically probably 4%-5% above the all 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 what kind of numbers you could be doing with Chiesi next year?

I mean, what is your capacity based on royalties being paid every time that you basically sell a product to Chiesi? 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 R&D growth during the phase two of the 115? Because you guys are looking at a pretty 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. 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 think it over and answer. Thank you.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: Sure. Regarding the first question of field, we are not providing guidelines, as noted. Also, in terms of our revenue, something we mentioned is that we are buying to the inventory. 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 Chiesi, for example, because if Chiesi is buying to the inventory in the last quarter of 2024, just for the example, they may buy less in the first quarter and vice versa. It may be a bit misleading to try to relate that directly. I can tell you that they keep growing. Without providing any guidelines and their numbers, which we cannot give, I can say that they are growing nicely the way we see that.

In terms of the R&D growth, yes, definitely we take these expenses into account, the PRX-115. As we said, we have enough cash for more than 12 months to fund this trial.

Conference Operator: Our next question comes from John Vandermosten with Zacks. Please proceed with your question.

Great. Thanks for letting me ask another one. The last question, maybe wonder what your thoughts are in terms of cash burn for 2026 and how that might split between R&D and SG&A.

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: As I said already, we cannot provide guidance at that stage.

Conference Operator: Okay. Even for your costs?

Gilad Memlock, Senior Vice President and Chief Financial Officer, Protalix BioTherapeutics: Correct. 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 of course, we have in mind that we are funding the PRX-115 phase two trial.

Conference Operator: Okay. All right. Thank you.

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

Dror Bashan, CEO, Protalix BioTherapeutics: Thank you, everybody, for the time. We will keep updating you, and we will connect next quarter, please. Thank you.

Conference Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.