Protalix Biotherapeutics Inc (PLX) Announces 2Q:17 Results and Provides Corporate Update


Protalix Biotherapeutics Inc (NYSEMKT:PLX) announced its financial results for the six months ended June 30, 2017 and provided a corporate update.

“Substantial progress was made across all three of our clinical assets in the second quarter, including active enrollment in all Fabry trials, nearing the end of enrollment for our PRX-106 trial and progress with our interactions with the CF Foundation,” said Moshe Manor, Protalix’s President and Chief Executive Officer.  “Recently, we executed a $10 million debt financing to counter balance a similar amount of cash paid out to settle conversions of our 7.50% convertible notes.  In addition, we refinanced $9 million principal amount of our 4.50% convertible notes due September 2018 into $8.55 million of new 4.50% convertible notes due February 2022.  These transactions solidify our cash position into 2019.”

2017 First Half and Recent Clinical and Corporate Highlights

General Corporate Highlight

  • The U.S. Food and Drug Administration (FDA) approved the Company’s current manufacturing facility to operate as a multi-product facility to support the potential manufacturing of both pegunigalsidase alfa and taliglucerase alfa on a commercial scale.
  • Manufacturing for drug substance for all phase III clinical trials of pegunigalsidase alfa are complete, and manufacturing capacity is readily available for commercial needs.

Pegunigalsidase alfa (PRX-102) for Fabry Disease

  • Both the Company’s Balance and Bridge studies are currently enrolling patients with the Bright study to initiate its first site this month.
  • To date, all of the patients in the Balance study that switched to pegunigalsidase alfa from Fabrazyme® have demonstrated excellent tolerability and no infusion reaction has been observed.  A number of patients in the study have been moved to home care therapy following successful initial infusion periods in the infusion center.

Alidornase alfa (PRX-110) for Cystic Fibrosis

  • The Cystic Fibrosis Foundation approved the Company’s letter of intent application.  With that approval, the Company has been invited to apply for a grant to support the clinical development of alidornase alfa.
  • An oral presentation titled, “Phase II clinical trial results with alidornase alfa for the treatment of CF,” made by Professor Eitan Kerem, Head of the Division of Pediatrics, Children’s Hospital, Hadassah Medical Center, and principal investigator of the phase 2a clinical trial of alidornase alfa at the 40th European Cystic Fibrosis Society Conference.

Oral anti-TNF (OPRX-106) for Ulcerative Colitis

  • Enrollment is nearing completion in global clinical trial sites.  Full results are expected around year-end.

Alfataliglicerase for Gaucher Disease

  • Shipment of approximately $3.6 million of alfataliglicerase was completed in June with an additional shipment of $1.3 million completed in July and $2.2 millionscheduled to be shipped later this quarter.
  • According to the purchase order received by the Company, additional shipments are scheduled to be made during fourth quarter.

Financial Results for Six Months ended June 30, 2017

  • The Company reported a net loss of $20.6 million, or $0.16 per share, basic and diluted, excluding a one-time, non-cash net charges of $38.1 million in connection with the remeasurement of a derivative which was reversed in its entirety into the Company’s income statement and shareholder equity section in the second quarter, compared to a net loss of $19.5 million, or $0.20 per share, basic and diluted, for the same period of 2016.
  • The Company recorded total revenues of $9.2 million, compared to $2.4 million during the same period of 2016.  The increase is attributed primarily to increased sales of drug product to Brazil and drug substance to Pfizer Inc.
  • Research and development expenses, net were $13.5 million, compared to $13.8 million for the same period in 2016.  Selling, general and administrative expenses were $5.4 million, compared to $4.2 million incurred during the same period of 2016.  The increase is primarily attributed to increased activities in Brazil.
  • On June 30, 2017, the Company had $34.5 million of cash and cash equivalents.  With the addition of the $10 million from the recent financing, cash is currently projected to fund operations into 2019.
  • During the period, investors converted approximately $10.8 million of face value of the Company’s 7.5% convertible notes, of which $7.7 million face value were settled for $11 million in cash (including accrued interest and make whole).  This conversion was the primary driver of the recent $10 million notes offering announced July 25, 2017.
  • Approximately principal amount $3.6 million of the 4.50% convertible notes due February 2022 have been converted into approximately 4.2 million shares of common stock since the issuance of the notes.
  • As of today, the Company’s outstanding convertible notes include 4.50% convertible notes due September 2018 with an aggregate principal amount of $5.9 million, senior secured 7.50% convertible notes due November 2021 with an aggregate principal amount of $61.9 million and 4.50% convertible notes due February 2022 an aggregate principal amount of $5.0 million.

Shares of Protalix are currently trading at $0.631, down $0.019 or -2.91%. PLX has a 1-year high of $1.51 and a 1-year low of $0.26. The stock’s 50-day moving average is $0.77 and its 200-day moving average is $0.93.

On the ratings front, PLX has been the subject of a number of recent research reports. In a report issued on July 12, H.C. Wainwright analyst Ram Selvaraju reiterated a Buy rating on the stock, with a price target of $5, which implies an upside of 669% from current levels. Separately, on June 8, Jefferies Co.’s Peter Welford reiterated a Buy rating on the stock and has a price target of $1.80.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ram Selvaraju and Peter Welford have a yearly average loss of -9.5% and a return of 27.3% respectively. Selvaraju has a success rate of 33% and is ranked #4579 out of 4628 analysts, while Welford has a success rate of 79% and is ranked #171.

Protalix Biotherapeutics, Inc. engages in the development and commercialization of recombinant therapeutic proteins based on ProCellEx plant cell based expression system. It offers Taliglucerase alfa injections under the brand name Elelyso, an enzyme replacement therapy for Gaucher disease. Its drug candidates also include Oral Glucocerebrosidase for potential treatment of Gaucher disease; therapeutic proteins for Fabry disease, and immune diseases such as rheumatoid, psoriatic and juvenile idiopathic arthritis, ankylosing, spondylitis, and plaque psoriasis; and protein for biodefense and other indications.