Protalix Biotherapeutics Third Quarter 2026 Financial and Business Results Conference Call - PROTALIX BIOTHERAPEUTICS INC

Financial Performance:

• Third quarter 2026 total revenue reached $21.9 million, up from $17.9 million in Q3 2025; first nine months totaled $75.6 million, a 42% increase from $43.6 million in the prior year period.
• Q3 2026 revenues from selling goods were $21.8 million, driven primarily by increased sales of El Fabrio to partner Chiesi and higher volumes to Pfizer.
• Cost of revenues decreased to $7.9 million from $8.3 million in Q3 2025, largely due to lower sales to Fire Crews (likely a transcription error for a partner or product line, context suggests specific customer mix changes).
• Research and development (R&D) expenses rose to $6.9 million from $4.5 million, attributed to higher subcontractor costs for the REDOX study and a $1 million non-cash grant reduction under Israeli R&D law.
• Net income for Q3 2026 was $4.0 million ($0.05/share), compared to $2.4 million ($0.03/share) in Q3 2025.
• Cash, cash equivalents, and short-term bank deposits stood at $48.5 million as of September 30, 2026, with no outstanding debt or warrants, providing substantial financial flexibility.

Guidance and Future Outlook:

• Management expects positive revenue momentum to continue in 2027, citing a positive trend with Chiesi following the March approval of the every-four-week dosing regimen for El Fabrio.
• Explicit guidance for the full year 2027 will be provided at the time of the annual report publication.
• The REDOX Phase II study for PRX-115 is actively enrolling, with top-line results anticipated in the second half of 2027.
• Long-term outlook projects the global Fabry disease market to reach approximately $3.2 billion by 2031, with the company positioned to capture a significant share via its partnership with Chiesi.
• A decision on entering clinical trials for the PRX-119 program is expected to be made within the current quarter.

Business Segments and Product Lines:

• El Fabrio: Commercial foundation remains strong; the product is expanding globally with approvals outside the US and accelerated patient penetration in Europe. The new every-four-week dosing option is expected to drive significant uptake, potentially reaching a significant portion of the patient base.
• PRX-115: A PEGylated uricase for uncontrolled gout; Phase I data presented at ACR Convergence 2026 shows measurable plasma levels up to 85 days, supporting the potential for less frequent dosing and positioning it as a potential best-in-class therapy.
• Pipeline Expansion: The company is building a pipeline in rare renal diseases, utilizing the REDOX study for gout as a primary focus while preserving upside potential for future programs.
• PRX-119: Development activities are ongoing, with a go/no-go clinical decision anticipated soon.

Market and Competitive Landscape:

• El Fabrio is positioned to capture market share in a global Fabry market projected to reach $3.2 billion by 2031.
• PRX-115 targets the uncontrolled gout market, characterized as a blockbuster opportunity with high patient need and low quality of life among sufferers.
• The company differentiates PRX-115 through prolonged half-life, reduced immunogenicity, and the potential for significantly less frequent dosing compared to existing uricase drugs.

Risks and Challenges:

• Clinical Development: Future results depend on the successful completion of the REDOX Phase II study; failure to meet active arms or demonstrate safety/efficacy could delay commercialization.
• Manufacturing: Past manufacturing issues with Pfizer-related volumes previously suppressed revenue; supply chain continuity remains a critical factor for gross margin stability.
• Competition: The gout market includes existing uricase therapies; PRX-115 must prove superior efficacy and convenience (dosing frequency) to gain market adoption.
• Regulatory: Approval status and market acceptance of the four-week dosing regimen for El Fabrio in various global territories.

Management Commentary and Tone:

• Management expressed high confidence, describing the first nine months of 2026 as a period of "continued progress" and a "growing financial position."
• The tone was optimistic regarding the commercial execution of El Fabrio and the technical promise of PRX-115's Phase I data.
• CEO Dror Bashan emphasized the strength of the balance sheet (no debt) and the strategic focus on advancing key priorities.

Analyst Questions and Answers:

• Revenue Predictability: Analyst Ram Selvaraju asked about revenue plateauing; Management confirmed continued momentum with Chiesi but declined to provide specific future guidance numbers until the 2027 annual report.
• Dosing Penetration: Analyst John Vandermosen inquired about the four-week dosing adoption rate; Management stated a "significant portion" of patients are expected to switch, with accelerated penetration in Europe, though specific percentage targets were not provided.
• Gross Margins: Margins are considered stable at a new baseline due to higher sales mix with Chiesi and the resolution of prior manufacturing issues with Pfizer; El Fabrio carries a higher gross margin than the previously reported El Aliso.
• PRX-119 Update: Management confirmed that a decision on the PRX-119 clinical program will be finalized within the quarter.

Other Key Points:

• The transcript contains several transcription errors regarding company names (e.g., "Protallix," "Portalix," "Pertalic," "Fire Crews," "Kerysey," "Kyrgyz") which contextually refer to "PortaLix" or "Protallix," "Chiesi," and "Pfizer."
• The earnings call took place in late 2026, covering Q3 results and nine-month figures.
• The next earnings call is scheduled for mid-March to discuss full-year 2026 results and 2027 outlook.