ProCell Opportunity: Protalix BioTherapeutics (NYSE American: PLX)

Published on September 24, 2024 | Ticker: PLX

Protalix BioTherapeutics, Inc. (NYSE American: PLX) is a biopharmaceutical company focused on the development and commercialization of recombinant therapeutic proteins based on its proprietary ProCellEx protein expression system. The company has successfully developed two enzyme replacement therapies (ERTs) - Elfabrio® (pegunigalsidase alfa) for the treatment of adult patients with Fabry disease and Elelyso® (taliglucerase alfa) for the treatment of adult patients with Gaucher disease.

Business Overview

Protalix's ProCellEx platform is a key differentiator for the company. ProCellEx is a proprietary plant cell-based protein expression system that allows for the creation and selection of high-expressing, genetically-stable cell lines capable of producing complex, biologically equivalent recombinant proteins. This platform provides several advantages over traditional mammalian cell-based systems, including biologic optimization, handling of complex protein expressions, flexible and efficient manufacturing, and intellectual property advantages.

Elfabrio

Elfabrio, Protalix's second commercial product, was approved by the FDA and the European Commission in May 2023 for the treatment of adult patients with Fabry disease. Fabry disease is a rare, genetic lysosomal disorder that results in the progressive accumulation of abnormal deposits of a fatty substance called globotriaosylceramide in the body's blood vessel walls. Elfabrio was approved with a 1 mg/kg every two weeks dosage. The FDA review team concluded that the benefit-risk of Elfabrio is favorable for the treatment of adults with confirmed Fabry disease, given the rare, serious nature of the disease and the limited therapeutic options available.

Protalix has licensed the global rights to commercialize Elfabrio to Chiesi Farmaceutici S.p.A. Under the licensing agreements, Protalix has received $50 million in upfront payments and development cost reimbursements of $45 million, and is eligible for up to $1 billion in potential milestone payments as well as additional payments as consideration for drug product supply.

Elelyso

Protalix's first commercial product, Elelyso, is an ERT approved for the treatment of adult patients with Gaucher disease. Gaucher disease is a rare genetic disorder in which a fatty substance called glucocerebroside accumulates in the body's cells and organs. Elelyso is approved in 23 markets, including the United States, Brazil, and Israel. Protalix has licensed the global rights to commercialize Elelyso, excluding Brazil, to Pfizer Inc.

Pipeline

In addition to its two commercial products, Protalix has a pipeline of product candidates in various stages of development. The company's current pipeline includes:

1. PRX-115: A recombinant PEGylated uricase (urate oxidase) product candidate being developed for the potential treatment of uncontrolled gout. Protalix recently initiated a Phase I clinical trial of PRX-115 and has decided to expand the study by adding an eighth cohort and to commence preparations for a Phase II clinical trial.

2. PRX-119: A plant cell-expressed PEGylated recombinant human DNase I product candidate being designed to elongate half-life in the circulation for the potential treatment of diseases associated with neutrophil extracellular traps (NETs).

Financials

Protalix's financial performance in 2023 was mixed. The company reported annual revenue of $65.5 million, an increase from the prior year, driven by sales of Elfabrio and Elelyso. However, Protalix reported an annual net loss of $8.3 million and negative operating and free cash flows of $1.3 million and $2.5 million, respectively.

For the first quarter of 2024, Protalix reported revenues from selling goods of $3.7 million, a decrease of 27% compared to the same period in 2023, primarily due to timing of deliveries to Pfizer and Brazil. Revenues from license and R&D services decreased by 98% to $0.1 million, reflecting the completion of Protalix's research and development obligations related to Elfabrio. The company reported a net loss of $4.6 million, or $0.06 per share, for the first quarter of 2024.

Liquidity

Protalix ended the first quarter of 2024 with $48.5 million in cash, cash equivalents, and short-term bank deposits, which the company believes is sufficient to enable the repayment of its convertible notes due in September 2024 and to fund its ongoing operations.

Outlook

The company's future growth and profitability will depend on the continued commercial success of Elfabrio and Elelyso, as well as the development and potential commercialization of its pipeline candidates, particularly PRX-115 and PRX-119. Protalix faces competition in the Fabry and Gaucher disease markets, as well as potential risks related to the development and regulatory approval of its pipeline products.

Conclusion

Overall, Protalix's ProCellEx platform, its two approved products, and its pipeline of early-stage candidates provide a solid foundation for the company's future growth. However, the company's financial performance and liquidity position will need to be closely monitored as it continues to invest in research and development and navigate the competitive landscape in the rare disease space.

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