STIFEL 2026 HEALTHCARE CONFERENCE - PROTALIX BIOTHERAPEUTICS INC

All right. Good afternoon. Thanks for being here for the Stifel Healthcare Conference. My name is Colleen Cousy. I'm one of the senior analysts here at Stifle, and I'm pleased to have with us the Protallix team, including Gerard Bichon, CEO, and Gilad Momlok, CFO. We'll have a formal presentation, and then I have some Q&A at the end. So thank you, and thank you everybody for coming. I will start with a snapshot about the company. Protalix actually develop and manufacture and sell drugs, and we actually do it from concept to the market. We have two drugs approved. One is Elelyza, which is an ERT for Gaucher disease, for patients diagnosed with Gaucher, and the other one is Elfabri, which was approved in 2023 for patients diagnoses with Fabry disease. Elelysa was licensed to Pfizer, except Brazil. In Brazil, we have our own operations. And Chiesi, which is a private Italian company, we'll discuss it a bit later, is the global licensor for Fabrio. Fabrio was approved originally in May of 2023 with a regimen of once in two weeks, both in the EU and the US. about seven, eight months ago, at the beginning of March of this year. We got the once-in-four-weeks approval in the EU, which is a very nice achievement for us. Actually, 70% of the Fabry patients are outside the U.S., so this is very much important. And they do well. In the last three years, the launch is a success, and they do good, and we will discuss it a bit later. So this is, if I may say, the business segment of Protaris, where we enjoy royalties from our partners and milestones from time to time. The next one is a potential big upside. We have a program under phase two, advanced phase two if I may say, for uncontrolled gout. We plan to finance enrollment by Q1 next year. And actually a year from today to have the readout. We speak about a pretty robust study with a high biostatistical power. So, we think that once we will open the codes and have the readout, we will have very few questions left. These studies following a successful phase one was subject with hyperuricemia, so we know the mechanism of action works well. So, the reason to believe that we have a fair chance to hit the endpoints, and one or more of the four active arms. In addition, the last two or three years, we started to explore and get up the learning curve, and so we have already a couple of problems within selected rare renal disease indications. So, we are working on that, and I believe that within two years, we will have an interesting basket of rare reinal early stage program, let's say between discovery to phase one, just a minute. Portalix was based or was established, if I may say, both the unique technology where we can express complex human protein through plans as in suspension. This is where EL-ELIZO, EL-FABRIO, and the GALT programs are expressed through. We have our own drug substance line in our site. We are competitive, it's unique platform, and we are pleased with that. For the future portfolio and pipeline, I assume we'll have a combination of a program based on our platform and collaborations or licenses from third parties. It's per the indication that unmet needs per indication. This is the pipeline portfolio, how it looks in a more graphic way. I would like to refer to our financial situation. Actually, today, there are very few moments in the life of my job, at least a year that you have professional joy, if I may say, to go and publish results. The market is pleased, so it's nice. We just published the third quarter results, and we have achieved the accumulated 75.6 million dollars already we plan to meet the guidance or even exceed the guys and depends upon release of final release of batches and we sit on 48.5 million dollar cash and deposits and overall we are in a position where we can plan and finance advance our strategy and our plans for the next few years. We have the means to finance, of course, the phase two in GAUT and the other operational responsibilities. So, overall, it's a much more solid position than we have been earlier. So, we are pleased with these results. We expect a good overall 2026. And as we see the data that we get from Chiesi, we think the trend will continue for the foreseeable future. And we think, as I mentioned earlier about what I call the business segment or the royalties and milestone from this will grow and will increase our profitability in time. I would like to spend some time about the GAUD program. It's very much important. It's a significant upside for our business model. We are now running the release study. We are more or less two-thirds enrolled. We expect to find those enrollment by Q1, as I mentioned earlier. Here is one slide a bit about the disease. What is gout? About elevated plasma uric acid, which actually create crystals in the joint and damages them. There are, I would say, about 11 million gout patients in the U.S. Most of them are lighter patients, if I may say. We are targeting the more severe part, which is called uncontrolled gout. And I will show a little bit later the estimated numbers we are talking about. When you reach a situation where you are in uncontrolled gout, it's usually a very low quality of life. It's a pretty severe condition. And the idea is actually to reduce, if I may say, in a quick or rapid way, the uric acid level in the plasma. This is what is PRX115 about. About the numbers I mentioned, the 11 million overall gout patients, they are about eligible or uncontrolled gout patient is severe stage of about 150 to 200,000 patients. This way we put around 180,000. Right now, bless you, right now one therapy is approved on the label for uncontrolled gout patients. It's Cristexa by Amgen. We don't know the exact number. I mean, they grow. It's about one and a half, $1.6 billion drug probably this year. We assume it's, I assume maybe a bit more, 10,000, 12,000 We just don't exactly know. They don't publish number of patients. Overall, we think that by the time we will, if indeed the company mature, the program matures positively, so by 2031, this market will be a couple of billions of dollars of market, from a value point of view, and if indeed we win the endpoints of this phase two that is going on, we will have potentially, of course, got a differentiated profile therapy to compete well on the market and address the unmet needs of the patients. And I think it's extremely significant, both for patients and from a business point of view. So, what we aim to do is actually to reduce the burden of the infusion. We are testing once in four, once in six, and once in six in eight weeks infusion, Cristaxta today is approved for once in two weeks. We also have one arm, active arm with once in four weeks without methotrexate, which is also if we meet the end point, it could be very much significant for the patients. Clearly, we aim to have due to the change in the enzyme that we did when we actually designed this molecule. So, we did the change at C250, and we have designed a special PEG, which is a small PEG 3.4 kilodalton, it's bi-functional. We think that we have potentially, of course, a favorable masking profile, and therefore, we will be able not only to let's say reduce the frequency of the infusion, but hopefully to have a good immunogenicity and a safety profile for this product. Together, it could be a home run for us, and a good alternative for the patients or for discussion with the treating physicians. So, when we conducted the phase one, it was done with 64 subjects with hyperuricemia. We had eight cohorts. It was a single ascending dose. We started with one or two milligram and went up the 36 milligram at the eight cohort. Overall, we had eight subject per each cohort, six on the active if I may say enzyme and two on placebo. You can see here the results from the phase one. We put together the upper if I may say three cohorts by the way we chose the higher one, the 36 milligram and this is the one that we test now at phase two. You can actually see that the 36 milligrams, We see that in all subjects, we are way below the six milligram per deciliter. This is the well-known biomarker for gout, test gout patients, and we see that four out of the six subjects in this cohort were below two milligram per decilit, which is a significant, if I may say, input. We looked at the different cohort. So, as we went up the ladder of the strength, we got better and better results including safety issues or safety events. And this is after a careful consideration, we looked into it and chose this one to continue with. So, overall, it's a journal well-tolerated. We had one anaphylactic event in the second cold after five minutes of the infusion. It was not related to our enzyme. it was carefully checked the patient is okay. This is it, knock on wood. This study, it's silent so far. In this respect at least, we can see different inputs related, I would say, safety issues, and we will see in phase two, phase one is a single ascending dose. In phase two where we have the multiple dose, we will see the profile from an immunogenicity and safety point of view. So, it will be, we can conclude much better within a year where we are at the result. After we analyze the data, we went into phase two, it was discussed with the FDA. We have five arms, one is a placebo and four active arms. As I mentioned earlier, once in four, once in six, and once in eight weeks with methotrexate, and once and four weeks without methotraxate. Two-thirds in, so we have two major events, one is to find out his enrollment within the next four or five months, and the second one is the readout within a year. His enrollment if indeed it flies, so this is the plan. You can see here the comparison of the different arms and clearly once in four, once in six, or once in eight weeks is a significant, I would say, improvement for patients, of course, as well, as long, I'm sorry, the immunogenicity and safety profile are good. Clearly, if the once in four weeks we fly without the immunomodulator this is also a nice proposition for patients. A bit about Chiesi. Chies is a private health company originates based in Italy. They have three different businesses. One of them is the rare disease business where we are part of. we have a high priority or a top priority attention. It's one of their biggest products. It grows. They do very well on the market. The once in four weeks approval in March clearly enhances it, and we see, I would say, years ahead of continued growth, which is very important for us as a small company, which enabled us to execute on the rest of the programs and plans. As for LLISO, in Brazil, we do well. We have about 25 percent market share against serozyme, which is the main enzyme. Pfizer does to a less extent, if I may say. They are focused on other problems, if i may say, overall we sell from LLisO 22, 25 million dollars. This is the range, depends on different shipments. It's steady. In Brazil, It will grow slowly, but this is give or take. February will be totally different. In February, we expect from whatever we understand and speak to and analyze the market to reach 15% to 25% or 15% to 20%, this was with them. We think it will be even higher. We will see, let's say, in the next year or two, we may update this forecast. It's significant because it can drive Protalex a hundred million dollars in revenues and more. We are also entitled from time to time to different milestones, regulatory like the once in four weeks and future commercial milestones. So, it's a significant portion of our business, of course. This is just to illustrate how the once-in-four-weeks improves, if I may say, the quality of life of patients. Actually, they get additional two weeks of freedom. This is competition, there are two, additional two enzymes which were approved a while ago, they're once in two weeks, ERTs, Fabrazyme and Replagal, there is a shop on technology by Emicus called GalaFold, today it's by BioMarin, and they do very well, about $500-$550 million a year, it grows, and there is the Fabra which is I would say the new ERT on the block, which which we think is a good alternative for the patients and Kiersey indeed let's say proved that this is the case. This is about Kiersee just in a nutshell, it's a couple of billions, it's like four billion dollars in euros. It's a big company, they are stable, they grow, they're profitable, and again, we are pleased with their collaboration with them. For the future, this is just about the patent. I would like to summarize, if possible, I think we invest more and more in the last two, three years in Rayarinal beyond the 115. We see buds. I hope that within two years there will be, I don't know, four to six program give or take between discovery and phase one. It will update accordingly. some of them through our platform, some for collaborations. And this is just to close, as I mentioned earlier today, the commercial part which has limited downside actually, very limited in our case because the El Fabre launch is a success, and the once in four weeks enhances that. So, I think the financial data speaks for itself and we have a big upside with the 115. So, overall we see where we are today, we'll be in a year and a couple of years ahead and then into the future through their arena so this is it in a nutshell thank you great um thank you for that overview uh so as you mentioned uh the the q4 week regimen was approved in march uh in europe earlier this year can you talk about some of the trends that you're seeing with that new uh regimen that was approved so you know it's It's about seven to eight months on the market. More and more markets are approving the additional regimen. New markets like Brazil, I believe it was last week, they approved the ones in two weeks and the ones four weeks at the same time. I think it's a bit too early to say. So far it looks very good and we think it will continue to drive further penetration in the current market and you know successful launches in new markets that will be approved we are optimistic that's great and the uh announcement that you guys have with your earnings today expect to meet or exceed your 2026 guidance of 78 to 83 million in total revenues can you just speak to that agreement with kiezy and how you recognize that revenue Yeah, please. Maybe Gilad, our CFO, will address it. So I think what you're trying to understand is it's not a classic royalty model. So a classic royalty stream is, a classic loyalty model is when the revenues of KSI are growing, our revenues are growing one-to-one. This is not 100% correlation because the model is that we are selling batches to KSI, okay? So it's more about the inventory management of KS. So, of course, it's correlated to the increased revenues of of Chiesi, but if Chies in one quarter decides to increase the inventory in one more batch, then the next quarter it can be one batch less, and that's why you see fluctuation. That's why we encourage investors to look at it in an annual base, and that why we gave guidance of 78 to 83 million, which consists of 33 to 35 million dollar revenues to Chies, which is, by the way, 50% more than last year. There is, of course, a correlation, but it's not a one to one correlation with the revenues of KSI. I would add to that and say that what we see is a very impressive increase of number of patients, even the every four weeks in Europe, but not only in Europe also in the US and in ex-Europe. This trend we see and it's also affecting the number of batches we sell, but it's not one to one. But certainly just to a 2026, the correlation between what we sell to their inventory, what they order and what is going on in the model is becoming closer. So, I think we have a good Q3, we should have a Good 2026, we will put guidance for 2027 of course. I think all together we are on the right trend. Helpful. Let's spend a little bit of time on your holy on development pipeline you touched on 115. I know you touched this a little bit but what's so exciting to you about the phase one sad data that you presented so far? Again, again, again. What's so exciting to you about the phase one data you've presented so far? First, we see the mechanism for action works and works well because the subjects were hyperuricemia. And second, we saw a pretty long period of about 12 weeks of active enzyme. I mean, I speak with the highest dose. And we also saw, I don't remember the exact number, I think 40 or 40-something days, below 2 mg per deciliter with this 36 mg per decilitor. From whatever we have analyzed and did some simulation we think these are good results and although it was only a single ascending dose, we have the reasons to believe we have a fair chance to hit one or two arms in the phase 2 with good results. Great. And how is that enrollment going in the phase two study we are we think we are doing okay we are two-thirds in we plan to finalize enrollment by q1 of this year and then the six months study protocol then don't remember five seven weeks to go through committees and finalize all the data so actually in about a year if indeed we let's say for this for the example we end enrollment by the end of February so So in a year from today, we'll have the readout. Great. And what are you hoping to show in that phase two study? You're looking at a few different dose levels. What would be a success for that phase 2 study? Actually, what we measure is the same 36 milligram between couple of different frequency of infusion. So first, I would say we hope to hit and show good immunogenicity and safety profile. In addition to that, if we hit, for example, once in four weeks without metrotrexate, or once in six or eight weeks with metrotexate, it's a home run for us. What are the key efficacy endpoints that you're looking for? The main one is the proportion of responders within 80% of this six-month protocol. Cristexa for example is 70%, so clearly we want to be close to this number, or I don't not say above, and then there are secondary input which are related to different uric acid immunogenicity safety, and of course, there are other like questionnaires and other data. Great. And so, that data is coming, as you said, maybe roughly a year from now. Yes, correct. What does the development strategy look like after that? What are the next steps for that program? So, the next step will be meeting with the FDA in order to initiate a phase three study. it will be one pivotal study and we have to discuss it with them subject to the results, this is it. Then if indeed successful because since this study is done in a robust manner, if I may say like 85 and more biostatistical power, there will be, we think, few questions left for good or for bad. So we'll be able to fine-tune, if I may say, the one or two active arms going forward and hopefully execute successfully. And yeah, you touched on it right there maybe, but would you consider bringing more than one dose or, you know, cadence forward? Yes, I think that we don't know. We cannot foresee the future. But if indeed we hit well the main endpoints for, let's say, two out of the four, we will continue with them to give, let us say, the different profiles for the treating physician to discuss with their patients and treat them. Great. Fast forwarding a bit, if this comes to the market, what's the key differentiators that you're looking to offer versus Cristexa? I think it's a combination of a good immunogenicity and safety together with increase or reduce the frequency, but improve the burden on the patient. For the example, let's say it's once in six weeks as base case scenario so they will come to the clinic, let's say, every eight, nine weeks instead of 20 times, 22 times a year, it's significant. Again, immunogenicity has to be a good profile. I don't know to define right now what is a good profile because this is a multiple study, the first time we do a multiple study and of course safety, IRRs, etc. should be in a pretty low manner. Yes, I think it's a significant improvement if this comes through. Great. How would you think about future commercialization? So, we will see the results. Then, the couple of fortune one is to continue and do it by ourselves, and then by 2031, Portalic will be in a situation that we can establish our own platform. We can use third parties as, let's say, additional commercial muscles and brain, we can license it like we did with Kiersey and do co-promotion, we will see. I think right now as we evolve with the company, and the company is getting stronger and stronger, today we will consider seriously the first option. It will enable us to increase the business flexibility, to enjoy more from the upside, if I may say, instead of, for example, 25 percent from A to Z. We will see the results. We will discuss. We will look into it seriously. We are now initiating, I would say, a pretty robust market research with potential three TPPs. We'll get the inputs. Hopefully, we'll be ready way before the readout. Great. Maybe to just touch briefly on the rare renal side of the business as well. What are the next things we should be looking for out of that development? So, this is early. I think within the next two years there will be, I don't know, four to six, five to seven program between discovery to phase one. It will be less realistic that we can license a ready to phase two asset because we do not have yet the commercial infrastructure and we are a pretty small company. But all of these program are heavily considered. There are new mechanism for actions addressing real unmet needs. Each and every one that will be close to phase one and then further to phase two could be significant improvement in a big value contributor. Okay, great. Maybe just in summary now, could you just wrap things up over the next six to 12 months? Why should investors be paying attention to ProTalex? So, one is our commercial, I would say segment where we will see better and better execution and results. As we did Q2 and now Q3 and then the overall 2026, and we plan to stand by the guidance of 2026. We'll have guidance for 2027 which we think will be good or, I mean, I think we are on the right trend for the next years to come. Of course, the GAUT in Q1, we believe it's a major catalyst to finalize the enrollment because then there are six months of protocol and the readout which is in a year from today. These are the two main sections right now. Okay, great. Well, thank you so much. That was a great presentation. Thank you. You're welcome. Thank you