Protalix BioTherapeutics(US:PLX)2025-08-14 11:05markdown [PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and detailed notes [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents the company's financial position at specific dates, detailing assets, liabilities, and equity Balance Sheet Summary (USD in thousands) | Metric (USD in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :------------------ | | Total Assets | 78,486 | 73,417 | | Total Liabilities | 28,583 | 30,206 | | Stockholders' Equity | 49,903 | 43,211 | [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Details the company's revenues, expenses, and net income or loss over specific periods Three Months Ended June 30 (USD in thousands) | Metric (USD in thousands) | 2025 | 2024 | Change | | :------------------------ | :----- | :------ | :------- | | Total Revenue | 15,658 | 13,474 | +16.2% | | Operating Income (Loss) | 1,172 | (2,427) | N/A | | Net Income (Loss) | 164 | (2,203) | N/A | | Basic EPS | 0.00 | (0.03) | N/A | Six Months Ended June 30 (USD in thousands) | Metric (USD in thousands) | 2025 | 2024 | Change | | :------------------------ | :------ | :------ | :------- | | Total Revenue | 25,771 | 17,222 | +49.6% | | Operating Income (Loss) | (2,973) | (7,283) | N/A | | Net Income (Loss) | (3,455) | (6,798) | N/A | | Basic EPS | (0.04) | (0.09) | N/A | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) Outlines changes in equity from net income, stock issuance, and other comprehensive income - Stockholders' equity **increased to** **$49,903 thousand** as of **June 30, 2025**, from **$43,211 thousand** at **January 1, 2025**[16](index=16&type=chunk) - During the **six months** ended **June 30, 2025**, the company issued **2,775,215 shares** of common stock under the Sales Agreement, **generating** **$6,812 thousand**[16](index=16&type=chunk) - Exercise of warrants and options resulted in the issuance of **1,106,625 shares** and **generated** **$2,368 thousand** in proceeds during the **six months** ended **June 30, 2025**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (Six Months Ended June 30, USD in thousands) | Activity | 2025 | 2024 | | :------------------------ | :-------- | :------ | | Operating Activities | (10,291) | 578 | | Investing Activities | (750) | (786) | | Financing Activities | 9,180 | — | | Net Decrease in Cash | (1,865) | (235) | | Cash at End of Period | 17,895 | 23,399 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies and financial statement items [NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%201%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines the key accounting principles and methods used in preparing the financial statements [General](index=8&type=section&id=General) Describes the company's business, product portfolio, and financial outlook - **Protalix BioTherapeutics, Inc.** is a biopharmaceutical company focused on developing and commercializing recombinant therapeutic proteins using its proprietary **ProCellEx®** protein expression system[26](index=26&type=chunk) - The company has successfully developed two enzyme replacement therapies (ERTs): **Elfabrio®** for Fabry disease (**approved May 2023**) and **Elelyso®** for Gaucher disease (**approved May 2012**)[26](index=26&type=chunk)[27](index=27&type=chunk) - The product pipeline includes **PRX-115** for uncontrolled gout and **PRX-119** for NETs-related diseases[32](index=32&type=chunk) - The company's cash and cash equivalents and short-term bank deposits as of **June 30, 2025**, are believed to be **sufficient to satisfy capital needs for at least 12 months**[38](index=38&type=chunk) [Basis of presentation](index=11&type=section&id=Basis%20of%20presentation) Explains the framework and principles used for preparing the interim financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information[39](index=39&type=chunk) - There have been **no material changes** in the company's significant accounting policies since **December 31, 2024**[40](index=40&type=chunk) [Net earnings (loss) per share](index=11&type=section&id=Net%20earnings%20(loss)%20per%20share) Defines the calculation methods for basic and diluted earnings per share - Basic earnings (loss) **per share** is calculated by dividing net income (loss) by the weighted average number of common shares outstanding[41](index=41&type=chunk) - Diluted earnings **per share** adjusts basic EPS for potential dilution from stock options, warrants, and convertible notes[42](index=42&type=chunk) [Convertible notes](index=11&type=section&id=Convertible%20notes) Details the accounting treatment and repayment status of the company's convertible debt - The company fully repaid its **7.50%** Senior Secured Convertible Promissory Notes due **2024** in **September 2024** using available cash[43](index=43&type=chunk) - Starting **January 1, 2024**, convertible debt instruments were accounted for as a single liability measured at amortized cost[44](index=44&type=chunk) [New accounting pronouncements](index=11&type=section&id=New%20accounting%20pronouncements) Discusses recently issued accounting standards and their potential impact on financial disclosures - ASU **2023-09** (Income Taxes) is **effective** for fiscal years beginning after **December 15, 2024**[45](index=45&type=chunk) - ASU **2024-03** (Expense Disaggregation) is **effective** for fiscal years beginning after **December 15, 2026**[46](index=46&type=chunk) - The company is currently evaluating the impact of these new ASUs on its consolidated financial statements disclosures[45](index=45&type=chunk)[46](index=46&type=chunk) [NOTE 2 - INVENTORIES](index=12&type=section&id=NOTE%202%20-%20INVENTORIES) Provides a breakdown of inventory components and their valuation Inventories (USD in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Raw materials | 4,357 | 4,549 | | Work in progress | 8,144 | 11,245 | | Finished goods | 8,630 | 5,449 | | **Total inventory**| **21,131** | **21,243** | [NOTE 3 – FAIR VALUE MEASUREMENT](index=12&type=section&id=NOTE%203%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENT) Explains the fair value hierarchy and measurement of financial instruments - The company utilizes a fair value hierarchy (Level **1**, **2**, **3**) that prioritizes observable inputs for financial assets and liabilities[48](index=48&type=chunk)[49](index=49&type=chunk) - The fair value of financial instruments included in working capital is identical or close to their carrying value[50](index=50&type=chunk) [NOTE 4 – STOCK TRANSACTIONS](index=12&type=section&id=NOTE%204%20%E2%80%93%20STOCK%20TRANSACTIONS) Details equity-related activities including warrant exercises and stock issuances - During the **three months** ended **March 31, 2025**, the company issued **908,000 shares** from warrant exercises, **generating** **approximately $2.1 million**[51](index=51&type=chunk) - All remaining warrants expired on **March 11, 2025**[51](index=51&type=chunk) - During the **six months** ended **June 30, 2025**, the company sold **2,775,215 shares** under the Sales Agreement, **generating** gross proceeds of **approximately $7.0 million**[51](index=51&type=chunk) - The company issued **198,625 shares** from option exercises, receiving **$0.3 million** in cash proceeds during the **six months** ended **June 30, 2025**[52](index=52&type=chunk) [NOTE 5 – EARNINGS (LOSS) PER SHARE](index=13&type=section&id=NOTE%205%20%E2%80%93%20EARNINGS%20(LOSS)%20PER%20SHARE) Presents the calculation of basic and diluted earnings per share for the periods Earnings (Loss) Per Share (Six Months Ended June 30) | Metric (In thousands, except share data) | 2025 | 2024 | | :--------------------------------------- | :----------- | :----------- | | Net income (loss) | $(3,455) | $(6,798) | | Basic EPS | $(0.04) | $(0.09) | | Diluted EPS | $(0.04) | $(0.09) | | Weighted average shares (Basic) | 77,651,330 | 73,172,980 | | Weighted average shares (Diluted) | 77,651,330 | 73,172,980 | Earnings (Loss) Per Share (Three Months Ended June 30) | Metric (In thousands, except share data) | 2025 | 2024 | | :--------------------------------------- | :----------- | :----------- | | Net income (loss) | $164 | $(2,203) | | Basic EPS | $0.00 | $(0.03) | | Diluted EPS | $0.00 | $(0.03) | | Weighted average shares (Basic) | 78,663,884 | 73,308,281 | | Weighted average shares (Diluted) | 81,271,610 | 73,308,281 | - Diluted EPS for the **six months** ended **June 30, 2025**, did not include **12,936,429 shares** underlying stock options, restricted stock, and warrants because their effect would be anti-dilutive[53](index=53&type=chunk) [NOTE 6 – TAXES ON INCOME (TAX BENEFIT)](index=13&type=section&id=NOTE%206%20%E2%80%93%20TAXES%20ON%20INCOME%20(TAX%20BENEFIT)) Details the company's income tax expense or benefit and effective tax rate Taxes on Income (Tax Benefit) (USD in thousands) | Period | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Current taxes on income | 266 | - | 266 | - | | Deferred taxes on income | 118 | (207) | 231 | (69) | | **Total taxes on income (tax benefit)** | **384** | **(207)** | **497** | **(69)** | - The effective tax rate for the **six months** ended **June 30, 2025**, was **13%**, compared to **(3)%** for the same period in **2024**, primarily due to **forecasted profits from U.S. taxable GILTI income related to Section 174 of the TCJA**[55](index=55&type=chunk) - Tax reform legislation (H.R.**1**) enacted on **July 4, 2025**, **restores current deductibility for domestic research expenditures beginning in 2025**[56](index=56&type=chunk) [NOTE 7 – SEGMENT INFORMATION](index=14&type=section&id=NOTE%207%20%E2%80%93%20SEGMENT%20INFORMATION) Provides financial data segmented by customer and geographic region - The company operates as a **single operating segment in Israel**[59](index=59&type=chunk) Revenues from Selling Goods by Customer (Six Months Ended June 30, USD in thousands) | Customer | 2025 | 2024 | Change | | :---------------- | :----- | :----- | :------- | | Pfizer (Ireland) | 12,626 | 8,001 | +57.8% | | Fiocruz (Brazil) | 3,016 | 7,266 | -58.5% | | Chiesi (Italy) | 9,793 | 1,714 | +471.4% | | **Total revenues from selling goods** | **25,435** | **16,981** | **+49.8%** | [NOTE 8 – SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION](index=14&type=section&id=NOTE%208%20%E2%80%93%20SUPPLEMENTARY%20FINANCIAL%20STATEMENT%20INFORMATION) Offers additional details on accounts payable and other accrued liabilities Accounts Payable and Accruals – Other (USD in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Payroll and related expenses | 1,527 | 1,343 | | Provision for vacation | 2,209 | 1,811 | | Accrued expenses | 7,311 | 9,568 | | Royalties payable | 763 | 1,080 | | Income tax payable | 3,742 | 3,476 | | Payable to customer | - | 2,056 | | Property and equipment suppliers | 378 | 254 | | **Total** | **15,930** | **19,588** | [NOTE 9 – SUBSEQUENT EVENTS](index=15&type=section&id=NOTE%209%20%E2%80%93%20SUBSEQUENT%20EVENTS) Discloses significant events that occurred after the reporting period - After **June 30, 2025**, the company **collected approximately $1.4 million from Pfizer and $7.8 million from Chiesi**[60](index=60&type=chunk) - On **July 20, 2025**, **10-year options to purchase 597,990 shares of common stock** were granted to the incoming Sr Vice President and CFO, **Gilad Mamlok**, with an **exercise price of $1.45 per share** and an **estimated fair value of $0.6 million**[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition and operational results, including business overview, pipeline, and liquidity [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY](index=16&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS%20AND%20RISK%20FACTORS%20SUMMARY) Warns about uncertainties and risks that could cause actual results to differ from projections - Forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially, including those related to commercialization, regulatory approvals, global conditions, and the ongoing conflict in Israel[63](index=63&type=chunk)[64](index=64&type=chunk) - Companies in the pharmaceutical and biotechnology industries often experience significant setbacks in advanced clinical trials, and regulatory approval is not guaranteed even with promising data[66](index=66&type=chunk) [Recent Company Developments](index=18&type=section&id=Recent%20Company%20Developments) Highlights key corporate events and personnel changes during the reporting period - **Protalix** was added to the **Russell 3000®** and **Russell 2000®** Indexes, **effective June 27, 2025**[67](index=67&type=chunk) - **Gilad Mamlok** was appointed as the new Senior Vice President and Chief Financial Officer, **effective August 24, 2025**, succeeding Eyal Rubin[68](index=68&type=chunk) [Our Business](index=18&type=section&id=Our%20Business) Provides an overview of the company's proprietary technology, marketed products, and pipeline - **Protalix** is a commercial-stage biopharmaceutical company focused on recombinant therapeutic proteins produced via its proprietary **ProCellEx®** plant cell-based protein expression system[69](index=69&type=chunk) - The company has successfully developed two commercial enzyme replacement therapies (ERTs): **Elfabrio®** for Fabry disease and **Elelyso®** for Gaucher disease[70](index=70&type=chunk) - The company's pipeline includes **PEGylated uricase (PRX-115)** for uncontrolled gout and **Long Acting (LA) DNase I (PRX-119)** for NETs-related diseases[76](index=76&type=chunk) [ProCellEx: Our Proprietary Protein Expression System](index=20&type=section&id=ProCellEx%3A%20Our%20Proprietary%20Protein%20Expression%20System) Describes the company's unique plant cell-based protein production platform and its advantages - **ProCellEx** is **Protalix's** proprietary platform for producing recombinant proteins through plant cell-based expression, being the **first and only system to receive FDA approval for such proteins**[80](index=80&type=chunk) - The system offers advantages such as **biologic optimization, handling complex protein expressions, flexible manufacturing, simplified production, and elimination of viral contamination risks**[82](index=82&type=chunk) - **ProCellEx** utilizes advanced genetic engineering and plant cell culture technology (e.g., carrot and tobacco BY-**2** cells) in **cGMP-compliant, clean-room environments**[81](index=81&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [Our Marketed Products](index=22&type=section&id=Our%20Marketed%20Products) Details the company's approved enzyme replacement therapies for rare genetic disorders - The company markets two enzyme replacement therapies (ERTs): **Elelyso** for Gaucher disease and **Elfabrio** for Fabry disease[92](index=92&type=chunk) - **Elelyso** is **approved** in **23 markets**, including the United States and Brazil, while **Elfabrio** is **approved** in the United States, European Union, and other regions[93](index=93&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - The **global market for Gaucher disease is forecasted to be approximately $1.7 billion in 2025**, while the **Fabry disease market is projected to grow from $2.3 billion in 2025 to $3.2 billion in 2030**[95](index=95&type=chunk)[102](index=102&type=chunk) [Elelyso for the Treatment of Gaucher Disease](index=22&type=section&id=Elelyso%20for%20the%20Treatment%20of%20Gaucher%20Disease) Focuses on Elelyso's regulatory approvals, market presence, and disease prevalence - **Elelyso** (taliglucerase alfa) was **approved by the FDA** in **2012** for adult patients and in **2014** for children **four years** and older with Type **1** Gaucher disease[93](index=93&type=chunk) - It is the **first plant cell-derived recombinant protein approved by the FDA** for Gaucher disease and is **marketed in 23 countries**[93](index=93&type=chunk) - Gaucher disease is a rare genetic disorder with a **prevalence ranging from 0.70 to 1.75 per 100,000** in the general population[94](index=94&type=chunk) [Elfabrio for the Treatment of Fabry Disease](index=22&type=section&id=Elfabrio%20for%20the%20Treatment%20of%20Fabry%20Disease) Covers Elfabrio's regulatory status, market potential, and disease characteristics - **Elfabrio** was **approved** by the EC and FDA in **May 2023** for adult patients with Fabry disease (**1 mg/kg every two weeks** dosage), with subsequent approvals in other regions[97](index=97&type=chunk)[99](index=99&type=chunk) - The FDA approval included a boxed warning for hypersensitivity reactions/anaphylaxis and warnings/precautions for membranoproliferative glomerulonephritis (MPGN)[104](index=104&type=chunk) - Fabry disease is a serious life-threatening rare genetic disorder affecting **1 in 40,000 to 60,000 males**, leading to Gb**3** accumulation and end-organ failure[100](index=100&type=chunk)[101](index=101&type=chunk) [Regulatory Background of Elfabrio](index=24&type=section&id=Regulatory%20Background%20of%20Elfabrio) Summarizes the regulatory approval process and key milestones for Elfabrio - The **BLA for PRX-102 (Elfabrio) was resubmitted to the FDA in November 2022** after an **initial CRL in April 2021**, which cited the need for a manufacturing facility inspection and addressing updated regulatory circumstances[103](index=103&type=chunk) - The EMA's Committee for Medicinal Products for Human Use (CHMP) adopted a **positive opinion** in **February 2023**, leading to **EC approval**[104](index=104&type=chunk) - **Chiesi's Variation Submission to the EMA in December 2024** seeks to **add an additional dose and dosing regimen (2 mg/kg every four weeks)** to the current **Elfabrio** label[105](index=105&type=chunk) [Key Trials and Design](index=25&type=section&id=Key%20Trials%20and%20Design) Outlines the design and primary findings of pivotal clinical trials for Elfabrio - The **PRX-102** clinical development program aimed to demonstrate clinical benefit in adult Fabry patients, analyzing **1 mg/kg every two weeks** and **2 mg/kg every four weeks** dosing regimens[106](index=106&type=chunk)[107](index=107&type=chunk) - Preclinical studies showed **PRX-102** had a **significantly longer half-life, enhanced activity in affected organs, and reduced immunogenicity**[106](index=106&type=chunk) [Phase III BALANCE Study](index=25&type=section&id=Phase%20III%20BALANCE%20Study) Details the comparative efficacy and safety of PRX-102 versus agalsidase beta in Fabry patients - The BALANCE study was a **pivotal 24-month, randomized, double-blind, active-control study** comparing **PRX-102 (1 mg/kg every two weeks)** to **agalsidase beta** in Fabry patients with deteriorating renal function[108](index=108&type=chunk) - **PRX-102** demonstrated a **favorable tolerability profile** with **lower rates of infusion-related reactions (0.5 per 100 infusions for PRX-102 vs. 3.9 for agalsidase beta)** and **less premedication use**[111](index=111&type=chunk)[116](index=116&type=chunk) - A **trend of reduction in anti-drug antibody (ADA) positivity** was observed in the **PRX-102** arm (**from 34.6% to 23.4%**) while remaining stable in the **agalsidase beta** arm[112](index=112&type=chunk) [Phase III BRIDGE Study](index=26&type=section&id=Phase%20III%20BRIDGE%20Study) Evaluates PRX-102's impact on renal function in Fabry patients transitioning from agalsidase alfa - The BRIDGE study was a **12-month open-label study** evaluating **PRX-102 (1 mg/kg every two weeks)** in Fabry patients previously treated with **agalsidase alfa**[117](index=117&type=chunk) - It showed **substantial improvement in renal function**, with the **mean annualized eGFR slope improving from -5.90 mL/min/1.73m2/year on agalsidase alfa to -1.19 mL/min/1.73m2/year on PRX-102**[118](index=118&type=chunk) - **PRX-102** was **well-tolerated**, with the **majority of treatment-emergent adverse events (TEAEs) being mild or moderate in severity**[119](index=119&type=chunk) [Phase III BRIGHT Study](index=26&type=section&id=Phase%20III%20BRIGHT%20Study) Assesses the safety and efficacy of PRX-102 at a 2 mg/kg every four weeks dosage in Fabry patients - The BRIGHT study evaluated **PRX-102 (2 mg/kg every four weeks)** in Fabry patients previously treated with ERT, demonstrating it was **well-tolerated**[120](index=120&type=chunk)[124](index=124&type=chunk) - Study outcomes showed **stable renal function** (**mean eGFR slope -2.92 mL/min/1.73 m2/year**) and **stable plasma lyso-Gb3 concentrations throughout the 52-week treatment period**[126](index=126&type=chunk) - **Patient perception of health remained high and stable**, and **pain severity improved or remained stable**, with **no Fabry clinical events reported**[128](index=128&type=chunk) [Phase I/II Study](index=28&type=section&id=Phase%20I%2FII%20Study) Reports on early-stage clinical findings for PRX-102 in ERT-naïve adult Fabry patients - The phase I/II study in **ERT-naïve adult Fabry patients** demonstrated that **PRX-102 reduced kidney Gb3 inclusions and plasma lyso-Gb3 levels** (**approximately 90% decrease from baseline**)[130](index=130&type=chunk)[132](index=132&type=chunk) - **Renal function remained stable**, and **improvements were noted across gastrointestinal symptoms and overall disease severity (Mainz Severity Score Index, MSSI)**[132](index=132&type=chunk) - **Anti-drug antibodies (ADAs) formed by a minority of patients (<19%) turned negative after 12 months of treatment**, with **no observed impact on safety or efficacy**[133](index=133&type=chunk) [Extension Studies](index=28&type=section&id=Extension%20Studies) Describes the long-term follow-up studies for patients completing initial PRX-102 trials - **Two long-term open-label extension studies** were available for patients completing previous **PRX-102** trials, with **126 patients** initially enrolling[134](index=134&type=chunk) - Following **Elfabrio's** approval, **sponsorship and administration of the extension studies transferred to Chiesi**[136](index=136&type=chunk) - **Most patients have transitioned to commercial or expanded access programs**, leading to the **closure of the 1 mg/kg every two weeks dosage extension study**[136](index=136&type=chunk) [Pediatric FLY Study](index=29&type=section&id=Pediatric%20FLY%20Study) Introduces the ongoing study evaluating pegunigalsidase alfa in pediatric Fabry disease patients - **Chiesi** is sponsoring the **Pediatric FLY Study** to assess pegunigalsidase alfa in **Fabry disease patients aged 2 to less than 18 years**, with recruitment commenced[137](index=137&type=chunk) - The study design is based on the **Initial Pediatric Study Plan (iPSP) agreed with the FDA and the Paediatric Investigation Plan (PIP) accepted by the EMA**[137](index=137&type=chunk) [Japanese RISE Study](index=29&type=section&id=Japanese%20RISE%20Study) Details the clinical trial assessing pegunigalsidase alfa in Japanese Fabry disease patients - **Chiesi** is recruiting patients for the **Japanese RISE study** to evaluate the safety and efficacy of pegunigalsidase alfa (**PRX-102**) in **Japanese Fabry disease patients (adults and adolescents)**[138](index=138&type=chunk) - The study includes both **1 mg/kg every two weeks and 2 mg/kg every four weeks dosages**[138](index=138&type=chunk) [Commercialization of Approved Products](index=29&type=section&id=Commercialization%20of%20Approved%20Products) Explains the company's strategies and partnerships for marketing its approved therapies - **Elelyso is commercialized globally (excluding Brazil) through Pfizer and in Brazil through Fiocruz**[139](index=139&type=chunk)[140](index=140&type=chunk) - **Elfabrio is commercialized globally through Chiesi under two exclusive licensing and supply agreements**[142](index=142&type=chunk) - **Revenue from product sales to partners is recognized upon delivery, which may not directly reflect patient demand and can lead to period-to-period variability in results**[73](index=73&type=chunk)[75](index=75&type=chunk) [Elelyso – Pfizer](index=29&type=section&id=Elelyso%20%E2%80%93%20Pfizer) Describes the licensing agreement with Pfizer for global commercialization of Elelyso (excluding Brazil) - **Protalix has licensed global rights (excluding Brazil) to market and sell Elelyso to Pfizer under the Amended Pfizer Agreement**[139](index=139&type=chunk) - **Protalix supplies drug substance to Pfizer for Elelyso production at a fixed cost, with an initial 10-year supply period and options for extensions**[139](index=139&type=chunk) [Alfataliglicerase – Fundação Oswaldo Cruz (Fiocruz)](index=29&type=section&id=Alfataliglicerase%20%E2%80%93%20Funda%C3%A7%C3%A3o%20Oswaldo%20Cruz%20(Fiocruz)) Details the commercialization agreement for Elelyso in Brazil with Fiocruz - **Elelyso**, marketed as BioManguinhos alfataliglicerase, is commercialized in Brazil through an agreement with **Fiocruz**[140](index=140&type=chunk) - **Despite Fiocruz's purchases being significantly below agreed-upon milestones, Protalix continues to supply the product**[35](index=35&type=chunk)[141](index=141&type=chunk) - BioManguinhos alfataliglicerase is the therapy of choice for newly diagnosed Gaucher patients in Brazil and is used by **approximately 25% of patients**[140](index=140&type=chunk) [Elfabrio (pegunigalsidase alfa/PRX-102) – Chiesi Farmaceutici](index=29&type=section&id=Elfabrio%20(pegunigalsidase%20alfa%2FPRX-102)%20%E2%80%93%20Chiesi%20Farmaceutici) Outlines the exclusive global licensing and supply agreements with Chiesi for Elfabrio - **Under two exclusive global licensing and supply agreements, Protalix received $50.0 million in upfront payments and $45 million in development cost reimbursements from Chiesi**[142](index=142&type=chunk) - **Protalix is eligible for over $1.0 billion in potential milestone payments and tiered payments ranging from 15% to 40% of net sales**[142](index=142&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk) - **Chiesi is responsible for global commercialization and medical programs for Elfabrio, while Protalix is responsible for manufacturing the drug substance**[73](index=73&type=chunk)[144](index=144&type=chunk) - **A Fill/Finish Agreement with Chiesi for commercial fill/finish services was amended in November 2024 to have an initial term of 10 years**[147](index=147&type=chunk) [Product Development Pipeline](index=30&type=section&id=Product%20Development%20Pipeline) Presents the company's investigational drug candidates and strategic focus for future development - **Protalix's corporate strategy focuses on developing new, early-stage product candidates for rare and orphan diseases with high unmet needs, including renal diseases**[148](index=148&type=chunk) - The company intends to leverage its **ProCellEx** platform and PEGylation capabilities, as well as other modalities like small molecules and antibodies[148](index=148&type=chunk) - The current pipeline includes **PEGylated uricase (PRX-115)** for uncontrolled gout and **Long Acting (LA) DNase I (PRX-119)** for NETs-related diseases[148](index=148&type=chunk) [PEGylated Uricase (PRX-115)](index=30&type=section&id=PEGylated%20Uricase%20(PRX-115)) Focuses on PRX-115, a candidate for uncontrolled gout, and its clinical trial progress - **PRX-115 is a recombinant PEGylated uricase under development for uncontrolled gout, designed to lower urate levels with low immunogenicity and increased half-life**[149](index=149&type=chunk) - A **completed Phase I clinical trial showed dose-dependent increases in PRX-115 exposure and rapid, dose-dependent reductions in plasma urate levels for up to 12 weeks**[151](index=151&type=chunk)[154](index=154&type=chunk) - **PRX-115 was well-tolerated in the Phase I study, with only 25% of treated subjects reporting mild to moderate study drug-related adverse events**[158](index=158&type=chunk)[160](index=160&type=chunk) - **Preparations for a Phase II clinical trial of PRX-115 have been initiated, with the study expected to commence in the second half of 2025**[163](index=163&type=chunk) [PRX-119](index=33&type=section&id=PRX-119) Describes PRX-119, a DNase I product candidate for NETs-related diseases, and preclinical findings - **PRX-119 is a plant cell-expressed PEGylated recombinant human DNase I product candidate designed for elongated half-life to treat NETs-related diseases**[167](index=167&type=chunk) - **Preclinical studies demonstrated that PRX-119 administration decreased circulating DNA levels and significantly enhanced the survival of mice in sepsis and ARDS models**[168](index=168&type=chunk) [Intellectual Property](index=33&type=section&id=Intellectual%20Property) Summarizes the company's patent portfolio protecting its technology and products - As of **June 30, 2025**, **Protalix** holds a broad portfolio of **16 patent families**, consisting of **approximately 68 patents** and **42 pending patent applications** worldwide[169](index=169&type=chunk) [Research & Development](index=33&type=section&id=Research%20%26%20Development) Details ongoing efforts to enhance the ProCellEx platform and develop new product candidates - The company **continuously works on the further development and enhancement** of its **ProCellEx** plant cell expression technology and bioreactor system[170](index=170&type=chunk) - R&D efforts are focused on new, early-stage product candidates for indications with high unmet needs in efficacy and safety, including renal diseases[171](index=171&type=chunk) - The company intends to use its **ProCellEx** platform, PEGylation capabilities, and other modalities such as small molecules and oligonucleotides, while also exploring novel platform technologies[171](index=171&type=chunk)[172](index=172&type=chunk) [Critical Accounting Policies](index=35&type=section&id=Critical%20Accounting%20Policies) Confirms no material changes to key accounting policies and the use of estimates - **There have been no material changes to the company's critical accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2024**[173](index=173&type=chunk) - The preparation of financial statements requires management to make estimates and assumptions that are evaluated on an ongoing basis[174](index=174&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance for the three and six months ended June 30, 2025 [Three months ended June 30, 2025 compared to the three months ended June 30, 2024](index=35&type=section&id=Three%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202024) Compares financial results for the three-month periods, highlighting revenue and expense changes - **Revenues from selling goods increased by $2.1 million (16%) to $15.4 million**, primarily driven by an **$8.0 million increase in sales to Chiesi**, partially offset by decreases in sales to Fiocruz and Pfizer[175](index=175&type=chunk) - **Research and development expenses increased by $3.0 million (100%) to $6.0 million**, mainly due to preparations for the planned Phase II clinical trial of **PRX-115**[178](index=178&type=chunk)[179](index=179&type=chunk) - **Selling, general and administrative expenses decreased by $0.9 million (26%) to $2.6 million**[181](index=181&type=chunk) - **Financial expenses, net, were $0.5 million**, compared to **financial income, net, of $0.2 million** in the prior year, due to exchange rate costs and lower interest income, partially offset by lower notes interest expenses[182](index=182&type=chunk) [Six months ended June 30, 2025 compared to the six months ended June 30, 2024](index=36&type=section&id=Six%20months%20ended%20June%2030%2C%202025%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202024) Compares financial results for the six-month periods, detailing revenue and expense trends - **Revenues from selling goods increased by $8.4 million (49%) to $25.4 million**, primarily due to increases in sales to Chiesi (**+$8.1 million**) and Pfizer (**+$4.6 million**), partially offset by a decrease in sales to Fiocruz (**-$4.3 million**)[184](index=184&type=chunk) - **Research and development expenses increased by $3.7 million (64%) to $9.5 million**, mainly due to preparations for the planned Phase II clinical trial of **PRX-115**[187](index=187&type=chunk)[188](index=188&type=chunk) - **Selling, general and administrative expenses decreased by $1.4 million (21%) to $5.2 million**[190](index=190&type=chunk) - **Financial expenses, net, were $0.1 million**, compared to **financial income, net, of $0.3 million** in the prior year, due to exchange rate costs and lower interest income, partially offset by lower notes interest expenses[191](index=191&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, funding sources, and future capital requirements - As of **June 30, 2025**, the company had **$33.4 million in cash and cash equivalents and short-term bank deposits**[193](index=193&type=chunk) - The company repaid its **2024** Notes in **September 2024** with a cash payment of **approximately $21.2 million**[193](index=193&type=chunk) - During the **six months** ended **June 30, 2025**, the company raised **approximately $7.0 million** from common stock issuance under the Sales Agreement, with **approximately $15.7 million remaining available for sale**[194](index=194&type=chunk) - Management believes current funds are **sufficient to satisfy capital needs for at least 12 months** from the report issuance date[195](index=195&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) Analyzes cash generated or used by operating, investing, and financing activities - **Net cash used in operating activities was $10.3 million** for the **six months** ended **June 30, 2025**, primarily due to net loss and increases in accounts receivable and other assets[196](index=196&type=chunk) - **Net cash provided by financing activities was $9.2 million** for the **six months** ended **June 30, 2025**, from common stock issuance and exercise of warrants and options[196](index=196&type=chunk) - In contrast, **net cash provided by operations was $0.6 million** for the **six months** ended **June 30, 2024**[197](index=197&type=chunk) [Future Funding Requirements](index=38&type=section&id=Future%20Funding%20Requirements) Discusses anticipated capital needs and strategies for securing future financing - The company expects to incur **significant and increasing research and development expenditures** for its product candidates[200](index=200&type=chunk) - Anticipated revenues from **Elfabrio** and **Elelyso** may not be sufficient to fund all future expenditures[200](index=200&type=chunk) - Future cash needs will be financed through product sales, corporate collaborations, licensing arrangements, and public or private equity/debt financings[201](index=201&type=chunk) - The company currently has **no commitments for future external funding**, except for potential milestone payments under the **Chiesi** Agreements[201](index=201&type=chunk) [Effects of Currency Fluctuations](index=38&type=section&id=Effects%20of%20Currency%20Fluctuations) Examines the impact of exchange rate changes on the company's financial results - The company's **functional currency is the U.S. dollar**, but **approximately 44% of its costs are incurred in New Israeli Shekels (NIS)**[205](index=205&type=chunk)[206](index=206&type=chunk) - A decline in the U.S. dollar's value relative to the NIS would **increase the U.S. dollar cost of operations in Israel**[205](index=205&type=chunk)[206](index=206&type=chunk) - Currency fluctuations have **not had a material effect on results** for the **three** and **six months** ended **June 30, 2025**, but the company may engage in hedging transactions in the future[202](index=202&type=chunk)[206](index=206&type=chunk) [Off-Balance Sheet Arrangements](index=38&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of any material off-balance sheet financial commitments - The company had **no off-balance sheet arrangements** as of **June 30, 2025**, and **December 31, 2024**[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to market risks, primarily focusing on currency exchange risk due to a significant portion of its expenses being denominated in New Israeli Shekels (NIS) while its functional currency is the U.S. dollar [Currency Exchange Risk](index=39&type=section&id=Currency%20Exchange%20Risk) Details the company's exposure to foreign currency fluctuations, particularly with NIS - **Approximately 44% of the company's costs**, including salaries and office expenses, are **incurred in New Israeli Shekels (NIS)**[206](index=206&type=chunk) - A **1% revaluation of the NIS** would affect the company's loss before tax by **less than 1%**[206](index=206&type=chunk) - The company has **not engaged in hedging transactions** to date but may do so in the future to mitigate financial exposure from exchange rate fluctuations[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Outlines the evaluation of the company's disclosure controls and procedures, concluding their effectiveness as of June 30, 2025 [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of controls ensuring timely and accurate financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective as of June 30, 2025**[208](index=208&type=chunk) - These controls are designed to provide **reasonable assurance** that information required for Exchange Act reports is recorded, processed, summarized, and reported timely[207](index=207&type=chunk)[208](index=208&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=39&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) Acknowledges that control systems provide reasonable, not absolute, assurance against errors - Management acknowledges that disclosure controls and internal control over financial reporting can provide only **reasonable, not absolute, assurance** against all errors and fraud[209](index=209&type=chunk) - The design of a control system must reflect **resource constraints**, and benefits must be considered relative to costs[209](index=209&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports on any modifications to internal controls during the reporting period - **No changes in internal control over financial reporting occurred** during the quarter ended **June 30, 2025**, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[210](index=210&type=chunk) [PART II – OTHER INFORMATION](index=41&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) States the company's involvement in any material legal disputes - The company is **not involved in any material legal proceedings**[211](index=211&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) Refers to previously disclosed risks and any material changes since the last annual report - **No material changes to the risk factors** previously disclosed in the Annual Report on Form **10-K** for the year ended **December 31, 2024**[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on any unregistered equity sales or use of proceeds - **None**[213](index=213&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Discloses any defaults on senior debt instruments - **None**[214](index=214&type=chunk) [Item 4. Mine Safety Disclosure](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) Confirms the non-applicability of mine safety reporting requirements - **Not applicable**[215](index=215&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) Provides details on any other material information not covered elsewhere - **None of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement** during the quarter ended **June 30, 2025**[216](index=216&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) Lists all supplementary documents filed with the report - Exhibits include **Certificate of Incorporation, Bylaws, Form of Restricted Stock Agreement/Notice, Form of Stock Option Agreement, Employment Agreement, and CEO/CFO Certifications**[217](index=217&type=chunk)[218](index=218&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) Authenticates the report with official signatures from company executives - The report was signed on **August 14, 2025**, by **Dror Bashan, President and Chief Executive Officer**, and **Eyal Rubin, Senior Vice President and Chief Financial Officer**[223](index=223&type=chunk)