Protalix BioTherapeutics(PLX) - 2024 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for Protalix BioTherapeutics, Inc. as of March 31, 2024, and for the three months then ended Condensed Consolidated Balance Sheets As of March 31, 2024, the company reported total assets of $89.8 million, an increase from $84.4 million at year-end 2023, driven by increases in cash and inventories Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $27,209 | $23,634 | | Inventories | $22,346 | $19,045 | | Total Assets | $89,825 | $84,434 | | Liabilities & Equity | | | | Contracts liability | $11,039 | $0 | | Convertible notes | $20,420 | $20,251 | | Total Liabilities | $60,039 | $50,865 | | Total Stockholders' Equity | $29,786 | $33,569 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2024, the company reported a net loss of $4.6 million, or ($0.06) per share, compared to a net loss of $3.1 million, or ($0.05) per share, for the same period in 2023 Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total Revenue | $3,748 | $9,588 | | Cost of Goods Sold | ($2,602) | ($3,085) | | R&D Expenses | ($2,887) | ($5,847) | | Operating Loss | ($4,856) | ($2,459) | | Net Loss | ($4,595) | ($3,131) | | Loss Per Share (Basic & Diluted) | ($0.06) | ($0.05) | Condensed Consolidated Statements of Cash Flows For the first quarter of 2024, net cash provided by operating activities was $4.2 million, a significant improvement from the $3.0 million used in the same period of 2023 Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,188 | ($2,998) | | Net cash provided by (used in) investing activities | ($606) | $4,732 | | Net cash provided by financing activities | $0 | $14,233 | | Net increase in cash and cash equivalents | $3,575 | $15,925 | | Cash and cash equivalents at end of period | $27,209 | $33,036 | Notes to Condensed Consolidated Financial Statements The notes provide detailed information on the company's accounting policies, business operations, and financial items, including its ProCellEx® platform and commercialization partnerships - The company's two commercialized products are Elfabrio® for Fabry disease and Elelyso® for Gaucher disease, both developed using the proprietary ProCellEx® protein expression system[23] - The development pipeline includes PRX-115 for uncontrolled gout, which is in a Phase I trial, and PRX-119 for NETs-related diseases[33][35] Disaggregation of Revenues (in thousands) | Revenue Source | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Pfizer | $1,127 | $2,266 | | Brazil | $2,550 | $2,800 | | Total revenues from selling goods | $3,677 | $5,066 | | Revenues from license and R&D services | $71 | $4,522 | - The company believes its cash, cash equivalents, and short-term bank deposits as of March 31, 2024, are sufficient to fund capital needs for at least 12 months from the financial statement issuance date[47] - Subsequent to the quarter's end, the company collected approximately $1.1 million from Pfizer and $2.6 million from Brazil sales[72] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance for Q1 2024, recent developments, and strategic outlook, highlighting product commercialization and pipeline progress Marketed Products and Development Pipeline The company has two commercial products: Elelyso for Gaucher disease and Elfabrio for Fabry disease, with a development pipeline focused on rare diseases, led by PRX-115 for gout - Elfabrio® was approved by the FDA and European Commission in May 2023 for adult patients with Fabry disease[95] - The Phase I trial for PRX-115 (gout) was expanded to an eighth cohort to test a higher dose, and preparations for a Phase II trial have commenced[76][156] - The pipeline also includes PRX-119, a long-acting DNase I for NETs-related diseases, which is in preclinical development[162][163] Results of Operations Comparing Q1 2024 to Q1 2023, total revenues decreased by 61% to $3.7 million, primarily due to a $4.4 million drop in license and R&D service revenues, partially offset by a 50% reduction in R&D expenses Comparison of Operations for Three Months Ended March 31 (in millions) | Item | 2024 | 2023 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Revenues from Selling Goods | $3.7 | $5.1 | -27% | Decrease in sales to Pfizer and Brazil due to timing of delivery | | Revenues from License and R&D Services | $0.1 | $4.5 | -98% | Completion of R&D obligations and regulatory processes for Elfabrio | | R&D Expenses | $2.9 | $5.8 | -50% | Completion of the Fabry clinical program | | SG&A Expenses | $3.1 | $3.1 | 0% | Remained stable | Liquidity and Capital Resources As of March 31, 2024, the company had $48.5 million in cash, cash equivalents, and short-term bank deposits, which management believes are sufficient to cover capital needs for at least the next 12 months - The company had $48.5 million in cash, cash equivalents, and short-term bank deposits as of March 31, 2024[180] - Management asserts that current cash is sufficient to satisfy capital needs for at least 12 months from the report's issuance date[185][191] - Net cash provided by operations was $4.2 million for Q1 2024, primarily due to an $11.0 million increase in contracts liability[186] - As of March 31, 2024, approximately $6.4 million remains available for sale under the 2023 At-The-Market (ATM) Sales Agreement[194] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is currency exchange risk between the U.S. dollar and the New Israeli Shekel (NIS), as approximately 44% of its operational costs are incurred in NIS - The company's main market risk is currency fluctuation between the U.S. dollar (functional currency) and the New Israeli Shekel (NIS), as approximately 44% of its costs are in NIS[197][198] - The company does not currently engage in hedging transactions to mitigate currency exchange risk[198] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective[200] - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[202] PART II – OTHER INFORMATION Legal Proceedings The company reports that it is not involved in any material legal proceedings - The company is not involved in any material legal proceedings[204] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[205] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[206] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and XBRL data files - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[211]