Protalix BioTherapeutics, Inc. (PLX) Q1 2026 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Protalix BioTherapeutics First Quarter 2026 Financial and Business Results Conference Call. As a reminder, this conference is being recorded. I will now turn the conference over to our host, Mr. Mike Moyer of LifeSci Advisors, Investor Relations for Protalix. Thank you. Please go ahead.

Thank you, operator, and welcome to the Protalix BioTherapeutics Q1 2026 Financial Results and Business Update Conference Call. With me today are Dror Bashan, President and CEO of Protalix; and Gilad Mamlok, Senior Vice President and Chief Financial Officer. A press release announcing the financial results and corporate updates were issued this morning and are available now on the Protalix website. Please take a moment to read the disclaimer about forward-looking statements in the press release. The earnings release and this teleconference 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 Protalix's filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Mr. Bashan. Dror?

Thank you, Mike, and thank you, everyone, for joining our Q1 2026 financial results and business update call. I want to begin by highlighting 2 points that underscore the strength of our business today. First, during the quarter, we received a $25 million milestone from Chiesi, following the European Commission approval of Elfabrio's every 4 weeks dosing regimen. As a result, we ended the first quarter of this year with $51 million in cash, providing us with a strong balance sheet and substantial financial flexibility and sufficient funds to support our ongoing operations as well as our Phase II RELEASE study with PRX-115. Second, we are reaffirming our 2026 guidance. We continue to expect total revenue for the year to range from approximately $78 million to $83 million, inclusive of the $25 million milestones received from Chiesi. Within that outlook, we anticipate Elfabrio revenues, excluding milestones of approximately $33 million to $35 million and Elelyso revenues of approximately $20 million to $23 million. Taken together, this guidance reflects the strength of our commercial partnerships and our confidence in execution across our business for the year ahead. We entered 2026 with a good momentum with the regulatory progress for Elfabrio in Europe, which triggered a $25 million milestone payment, the continued enrollment of our PRX-115 Phase II RELEASE study and a growing focus on our rare renal disease preclinical pipeline. We remain confident in our strategy for the years ahead. Our partner, Chiesi, continues to execute well with Elfabrio across approved markets. Following the European Commission recent approval of every 4 weeks regimen, we believe Elfabrio is well positioned to meaningfully reduce treatment burden for eligible patients in the European Union without compromising efficacy. This added dosing flexibility strengthens Elfabrio's competitive position and supports broader adoption over time. In the United States, the FDA-approved dosing regimen remains unchanged. Looking longer term with the global Fabry market projected to approach approximately $3.2 billion by 2031, we believe Elfabrio has the potential to achieve a meaningful 15% to 20% market share globally, supported by its differentiated profile. We believe our revenue mix, particularly the continued expansion of Elfabrio positions us well for substantial long-term value creation. On our clinical side, PRX-115 continues to move forward as planned. The Phase II RELEASE study is actively enrolling, and we remain encouraged by the program profile based on the Phase I data. We believe it has the potential to improve outcomes for patients with uncontrolled gout. We continue to expect top line results in the second half of 2027. Beyond 115, our strategy remains centered on rare renal diseases where we believe our capabilities and platform offer a clear advantage. In our view, our business model limits downside risk while preserving meaningful upside as we advance our clinical programs and continue our commercial partnership. With that, I will turn the call over to Gilad for a detailed review of our financial results and outlook.

Thank you, Dror. For the first quarter of 2026, total revenue was $33.8 million, driven mainly by the $25 million milestone payment received from Chiesi, following approval of the every 4 weeks dosing regimen for Elfabrio in Europe. This milestone underscores the value embedded in our commercial partnerships. Revenues from selling goods were $7.4 million compared to $10 million in the first quarter of 2025. This change reflects lower Elelyso purchases by Pfizer and Fiocruz, mainly due to timing and inventory dynamics and was partially offset by sales to Chiesi. As we have noted previously, quarterly product revenues can fluctuate based on partner purchasing patterns, and we encourage investors to focus on full year performance rather than quarter-to-quarter variability. Cost of revenues was $4.1 million compared to $8.2 million for the same period in 2025. The decrease was mainly attributable to lower sales volumes to Pfizer and Fiocruz, partially offset by increased sales to Chiesi. R&D expenses increased to $5.4 million, up from $3.5 million in the prior year period, driven mainly by preparations for and initiation of the PRX-115 Phase II RELEASE study. This increase reflects a deliberate allocation of capital towards advancing PRX-115, which remains our top clinical priority. SG&A expenses were $3.1 million, up $0.5 million, reflecting modest growth year-over-year, largely attributable to personnel-related costs. As a result of the milestone revenues and ongoing cost discipline, net income for the quarter was $18.3 million or $0.23 per share and $0.22 on a fully diluted basis compared to a net loss of $3.6 million or $0.05 per share in the prior year period. Importantly, the company continues to operate a profitable commercial business and milestone provides additional upside without changing our underlying expense base. Turning to the balance sheet. Cash, cash equivalents and short-term bank deposits totaled $51 million as of March 31, 2026. We have no outstanding debt or warrants, providing us with substantial financial flexibility to support our continued pipeline advancement. In summary, we remain in a strong financial position and well capitalized to advance our key programs to the next set of clinical and commercial milestones. With that, I will turn the call back over to Dror. Dror?

Thank you, Gilad. To conclude, as we look ahead, we do so from a position of strength. With the $25 million milestone triggered by the EC approval, we hold approximately $51 million in cash as of March 31st of this year, giving us the financial flexibility to continue investing in programs and partnerships that will drive our next stage of growth. We are reaffirming our 2026 guidance and our expectation that Elfabrio can achieve 15% to 20% market share of the Fabry market by 2031. This reflects our confidence in the product, our partnership with Chiesi and the continued expansion of Elfabrio global. Now I will turn -- I would like to ask the operator to open the call for questions.

[Operator Instructions] Our first question is from Ram Selvaraju with H.C. Wainwright.

Congratulations on a good quarter. I wanted to ask if you could comment on the core determinants of the cadence with which you expect to receive revenue from Chiesi regarding Elfabrio sales? And if -- what you think the likelihood is, if any, of increases to the full year 2026 guidance for Elfabrio-related royalty-based revenue?

So I think as we mentioned last time, we just -- Chiesi, we received the approval for every 4 weeks on 5th of March. And Chiesi is now in the process of going country-by-country and getting the local reimbursement approval. So I think we are going to see the effect mostly in the second half of the year, and we expect the second half of the year to be much stronger with regards to Chiesi sales. At that point of time, we still stick to the same guidance we provided.

And secondly, can you provide any commentary on how enrollment is going in the RELEASE trial? And if you can potentially provide us with the timing for completion of enrollment?

As we said before, we are not updating regarding the continuing progress of the enrollment. It does progress. As we mentioned, we have many sites open. Our target is to finish enrollment by the end of 2026 and have the top line results in the second half of 2027.

And then lastly, with respect to the positioning of 115 in the overall gout market, do you expect this to change meaningfully with the advent of next-generation URAT1 inhibitors? Or do you anticipate that the treatment refractory -- the refractory gout market -- segment is more or less likely to remain the same?

So Ram, this is Dror. Thank you. We believe that, I would say, this segment of uncontrolled gout patients will stay and there will be, I would say, enough room and growing even for patients qualified for Uricase.

Our next question is from John Vandermosten with Zacks.

I know you mentioned that it's only the very first initial stages of the launch of Elfabrio for every 4 weeks. But do you have any initial data or initial insight into the uptake in the market on that approach?

It's too early for that, John. But we do see -- I mean, when we talk with Chiesi, I mean, they're optimistic about the progress and they expect to see the progress. But again, in terms of seeing the actual results, I don't think we're going to see them before the second half of the year.

Understood. And there was a mention in the press release about Chiesi continuing launches and regulatory efforts around the globe. And can you give us an update on how things are going in that respect? Any new geographies and any geographies that we should expect in the next few months or next quarters in terms of expanding exposure of patients to Elfabrio?

So there are a few targets from here in the next 12 months, I would say. Some are more significant, some are less, but we are going to report them immediately once there's approval. But it's a continuous route of getting more approvals, and we see what they have in the pipeline, and we will update as soon as they receive the approval.

And then there's also a mention of PRX-119. And I was wondering what's the next milestone for PRX-119? And I'm thinking also in terms of like getting into the clinic or IND submission or something like that. How does that look, that program?

We are developing and putting together different activities, if I may say, to make sure that we have -- we are on the right path, if I may say. We will update soon. I believe I hope by the end of this quarter, what we -- I mean, to which specific indication this mechanism of action works. And then we will, of course, detail when we expect to start Phase I.

There are no further questions at this time. I would like to turn the floor back over to Dror Bashan for closing remarks.

So thank you, everybody, for joining us today, and we are looking forward to talk to you next quarter. Thank you.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.