Mike Moyer: Good morning, ladies and gentlemen, and welcome to the Protalix BioTherapeutics First Quarter 2025 Financial and Business Results Conference Call. As a reminder, this conference is being recorded. I will now turn the conference over to our host, Mike Moyer of LifeSci Advisors, Investor Relations for Protalix BioTherapeutics. Thank you. Please go ahead. Thank you, operator, and welcome to the Protalix BioTherapeutics First Quarter 2025 Financial Results and Business Update Conference Call.

Dror Bashan: With me today are Dror Bashan, President and CEO of Protalix BioTherapeutics, and Eyal Rubin, Senior Vice President and Chief Financial Officer. A press release announcing the financial results for the quarter and corporate updates was issued this morning and is available now on the Protalix BioTherapeutics website. Please take a moment to read the disclaimer and forward-looking statements in the press release. The earnings release and this teleconference include forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause results to differ materially from the statements made. Factors that could cause results to differ are described in the disclaimer and in Protalix BioTherapeutics’ filings with the US Securities and Exchange Commission. I will now turn the call over to Mr. Bashan. Sure. Thank you, Mike.

Dror Bashan: And thank you, everyone, for joining for our first quarter of 2025 financial results and business update call. I will begin with a review of our accomplishments over the quarter, in recent weeks. Following my remarks, Eyal will provide a detailed review of our financial results, and then we will open the line for your questions, of course. We had another solid quarter with an increase in revenues from selling goods compared to the same period last year. Given the promising results obtained in 2024 from our first in human study of our GUT product candidate, PRX-115, we are focused on building on the momentum and working towards initiating the phase two clinical trial in patients with gout later this year. At the same time, we continue to evaluate additional pipeline candidates for potential further development, including PRX-119 as well as other early-stage clinical assets.

Eyal will discuss the details of our financial achievements in a few minutes. And I would like to start with PRX-115. As we announced with our results for 2024, we completed all cohorts in the first in human phase one clinical trial of PRX-115. The study involved a single dose of PRX-115 in subjects with elevated uric acid levels. Overall, PRX-115 exposures increased, and a single dose of PRX-115 rapidly reduced plasma uric acid levels, both in a dose-dependent manner. The encouraging results from these studies suggest a long-acting effect and may enable us to potentially widen the dose and interval, which could enhance patients’ compliance and treatment flexibility. I encourage you to check the publication section of our website where we have uploaded a poster that was presented at the ACR conference in November of 2024 describing the results.

We are excited to progress with the clinical development of PRX-115, and our goal continues to be the initiation of this phase two study in the second half of this year. I now turn to El Fabrio. Last year, our commercial partner, Chiesi Global Rare Diseases, continued to increase its focus on Ophabolio and invest substantially in medical and commercial programs. Last December, Chiesi announced that the European Medicine Agency or EMA validated a variation submission for peglunigarcidazarsha. This submission is to reduce the dosing frequency in the label to be two milligrams per kg every four weeks. The currently approved dose is one milligram per kg administered every two weeks. The application was supported by the revised population PK model and the new exposure-response analysis of the clinical data from the previously completed BRIGHT phase three clinical study, as well as the related extension study.

We look forward to working closely with both Chiesi and the EMA throughout the review process, and we expect to hear from the EMA during the fourth quarter of this year. We continue to appreciate Chiesi’s partnership and dedication to Fabry disease patients and the patient community. Our next pipeline candidate also expressed full prosthetics is PRX-119. PRX-119 is a pegylated recombinant human DNLAS one candidate in development for the potential treatment of diseases associated with neutrophil extracellular traps. The clinical development of PRX-119 remains ongoing. As we have been discussing throughout the past year, we have been focusing our efforts on early-stage development assets to build our product development pipeline. This includes leveraging our prosthetics platform and pegylation capabilities, evaluating drug delivery systems that may allow protective delivery of different modalities, and focusing our therapeutic areas on renal rare diseases.

We will continue these efforts throughout 2025, and we hope to provide you with further updates as this program becomes more mature. For now, let me say that I’m excited about our R&D efforts, and we are laying the groundwork for future developments. With that, it is now my pleasure to turn the call over to Eyal to review our financials. Eyal, please go ahead.

Eyal Rubin: Thank you, Dror. Thank you, everyone, for joining today’s call. Let me review our first quarter 2025 financials. We recorded revenues from selling goods of $10 million during the three months ended March 31, 2025, an increase of $6.3 million or 70% compared to revenues of $3.7 million for the three months ended March 31, 2024. The increase resulted primarily from an increase of $5.9 million to Pfizer and an increase of $400,000 in sales to Fircruz in Brazil. We recorded revenues from license and R&D services of $100,000 for the three months ended March 31, 2025, and March 31, 2024. Revenues from license and R&D services are comprised primarily of revenues we recognize in connection with our license supply agreements with Chiesi.

Going forward, we expect to generate minimal revenues from license and R&D services other than potential regulatory milestone payments. Cost of goods sold was $8.2 million for the three months ended March 31, 2025, an increase of $5.6 million or 215% from the cost of goods sold of $2.6 million for the three months ended March 31, 2024. The increase in cost of goods sold was primarily the result of the increase in sales to Pfizer and Fircruz in Brazil. For the three months ended March 31, 2025, our total research and development expenses were approximately $3.5 million, comprised of approximately $1.8 million in salary-related expenses, approximately $800,000 in subcontractor-related expenses, approximately $200,000 in materials-related expenses, and approximately $700,000 in other expenses.

For the three months ended March 31, 2024, our total research and development expenses were approximately $2.9 million, comprised of approximately $1.5 million in salary-related expenses, approximately $500,000 in subcontractor-related expenses, approximately $200,000 in materials-related expenses, and approximately $700,000 in other expenses. The total increase in research and development expenses for the three months ended March 31, 2025, was $600,000 or 21% compared to the three months ended March 31, 2024. The increase in research and development expenses resulted primarily from the advancement in our clinical pipeline. Selling, general, and administrative expenses were $2 million for the three months ended March 31, 2025, a decrease of $500,000 or 16% compared to $3.1 million for the three months ended March 31, 2024.

The decrease resulted primarily from a decrease of $400,000 in salary-related expenses and a decrease of $100,000 in selling expenses. Financial income net was $400,000 for the three months ended March 31, 2025, compared to financial income net of $100,000 for the three months ended March 31, 2024. The difference resulted primarily from lower notes interest expenses due to the September 2024 repayment in full of all the outstanding principal and interest payable under our then-outstanding 7.5% senior secured promissory notes, partially offset by lower interest income on bank deposits and higher exchange rate costs. For the three months ended March 31, 2025, and March 31, 2024, we recorded a tax benefit of approximately $100,000. The tax benefit resulted primarily from deferred taxes on income mainly derived from duty income mainly in respect to section 124 of The US Tax Cuts and Jobs Act of 2017 or the TCJA.

Effective in 2022, section 124 of the TCJA requires all US companies for tax purposes to capitalize and subsequently amortize R&D expenses that fall within the scope of section 134 over five years for research activities conducted in The US, and over fifteen years for research activities conducted outside The United States, rather than deducting such costs in the current year. Cash, cash equivalents, and short-term bank deposits were approximately $34.7 billion at March 31, 2025. Net loss for the quarter ended March 31, 2025, was approximately $3.6 million or $0.05 per share basic and diluted compared to $4.6 million or $0.06 per share basic and diluted for the same period in 2024. I will now turn the call back to you, Dror.

Dror Bashan: Thank you, Eyal. To conclude, 2025 is off to a good start and promises to be an exciting year for Protalix BioTherapeutics as we continue to build out the foundations for the future. We are excited to begin a phase two program for PRX-115 later this year, and we continue to make progress on our early-stage R&D efforts. I’m confident in our strategy. Our balance sheet and three streams of revenue will enable the next phase of pipeline development for Protalix BioTherapeutics. We look forward to updating you on our progress as we continue to drive innovation and create long-term value for both patients and stockholders. Now I would like to ask the operator to open the call for questions, please.

Operator: Thank you. The floor is now open for questions. You may press 2 if you would like to remove your question from the queue. Our first question today is coming from John Vandermosten of Zacks. Please go ahead.

John Vandermosten: Great. Thank you. And how are you doing, Dror and Eyal? I thought I’d start out with any visibility that you might have on an El Fabrio milestone. I know in the past, we’ve talked about that and we’ve, you know, advanced a quarter since then, and I wanted to know if we’re close to anything and what you have to say on that.

Dror Bashan: You know, all I can say, I mean, I think we’ve discussed it multiple times, and I can emphasize it today, of course. It’s very relevant. It gives the sales efforts and outcomes are strong. The pace of recruitment of commercial patients is very good and above our expectations. And, you know, Protalix BioTherapeutics sells, as we discussed, to Chiesi’s inventory. They are not directly to the market. Managing the inventory does not reflect, you know, one to one with actual sales. Which I think I emphasized. And, actually, they are actually improving every quarter. This is, you know, what we can say. Chiesi is a private company. We are obliged by the agreement to not detail specific numbers. But I say loudly, and I hope clear that they are doing very well. And actually improving every quarter.

John Vandermosten: Okay. And you mentioned on the call about the change in dosing frequency in the EMA and in The EU. Is there any effort going to be made for a similar approach in The United States to gain that dosing here?

Dror Bashan: First, what we discussed is an application Chiesi has submitted. Okay. It’s not a done deal. This is I hope it will be approved, of course. It’s ongoing. We don’t have any red flag present. So it’s ongoing, and we are encouraged. With regard to The US, once there will be something to update, we will update, of course.

John Vandermosten: Okay. I was looking at the list of medications for gout. And, you know, I know we’ve talked about Crexetapha previously on these calls and in person or in our other meetings. I also noticed that there was Novartis’ Alaris out there, and wanted to know how that fits into the treatment of gout.

Dror Bashan: You know, we will know more, I would say, let’s put it this way. From the phase one, we are very much encouraged. From the outcomes of the phase one, which are single dose. Once we initiate the phase two and then especially once we have the top line results, we will know much, much more. This is a well-designed study, double-blind. A high, I would say, statistical power, even very high. It was discussed with the FDA. So if indeed it will mimic or will be close to the phase one results, we potentially have a very good asset in hand. Including, you know, at least what we see for now. I want to be careful about future competition. You don’t expect me to refer to this product or the other product.

John Vandermosten: Okay. Yeah. I know it’s indicated for a bunch of different things, including gout. So I didn’t know. No complaints, but, you know, you know, I cannot refer to, you know, specific potential competition, you know, the market is or the pipeline is bigger than one program.

John Vandermosten: Got it. And final question for me is just on the options. I think you had some options that were both close to expiration and close to their exercise price last quarter. Did those get cleared out, or what was the disposition of that?

Dror Bashan: So I think Eyal will refer to that if it’s okay.

Eyal Rubin: Yeah. Sure, Dror. So, John, thanks for the question. The warrants that you’re referring to from the 2020 pipe transaction, they all expired other than a minimal amount. The disclosure, obviously, the 10-Q. A 908,000 warrants were exercised. All the rest, if I remember correctly, 12.5 million shares were actually expired without being exercised.

John Vandermosten: Okay. Very good. Thank you, Eyal. Thank you, Dror.

Eyal Rubin: Thank you. Thank you, John.

Operator: Thank you. The next question is coming from Ben Oksutti of Parental Securities.

Ben Oksutti: Hello, Dror. Thank you for taking my questions, and congrats on the continued progress. Just small questions on the phase two trial planned in gout. Do you also plan to enroll US patients? And then the other question is more of a general one. What other benefits could you kind of mention versus, like, Restexa besides the injection frequency? What else would you like that is worth highlighting or looking at? Thank you.

Dror Bashan: So thank you for that. The answer to the first question is yes. The majority of the patients will be enrolled in The US. And as for the second one, of course, it’s this is the plan. And to your second question, beyond the frequency, which is, by the way, very much important, which will be significant, we will need to see the outcomes in order to say that we have a better immunogenicity profile, rather. So, you know, we of course, we hope to have a very good safety profile and a very good immunogenicity profile, but you know, let’s see the results. But certainly, this is the intent as well.

Ben Oksutti: Okay. Thank you very much.

Operator: Thank you. The next question is coming from Robert Raju of H. C. Wainwright. Please go ahead.

Daniel Smith: Hi. Good morning, Dror. This is Dan on for Ram. Thank you for taking our question. So I guess just to start, we were wondering and just to confirm, has there been a lot of recent changes in the FDA, even more so as of, I think, it’s Tuesday, The Protalix BioTherapeutics products are regulated by CEDAR in The US. Right?

Dror Bashan: As far as I know, if I remember well, and I can relook at it, maybe I remember how, Fabio was approved by the rare disease division.

Daniel Smith: Got it. Okay. Then secondly, can you discuss any effects with the planned US pharmaceutical tariffs may have on the cost of goods sold? Would those be booked when you sell them inventories, or would you have an after-sale agreement on that?

Dror Bashan: Thank you. Eyal will refer to this too. Better than I do. Yeah. Of course.

Eyal Rubin: Of course. Of course. So we’re actually, we’re not selling to The US. We are selling to Chiesi from Surikivi, an Italian company. So our relationship with Chiesi is basically a relationship between an Israeli company and an Italian company. The taxes that they are now in the news, obviously, are not going to impact our relationship with Chiesi. With regards to the way that Chiesi is going to ship those, the how the actually, the vial. The five-year vial, you know, to the that’s a I guess, going to be an intercompany transaction between two of the entities held by the same parent company. I’m not even sure that that can impact them, but that is a question for them.

Daniel Smith: Got it. And kind of a follow-up on that. Can you confirm if has Chiesi discussed any increase in the list price or plans to increase the list price about Fabrio in The US in response to those tariffs?

Eyal Rubin: The answer is no. As far as we know and, again, it’s something we can share their pricing strategy that confidential and protected under the license agreement, but they so far as we understand, today, this is not part of the plan. But, obviously, it might change once they once and if the taxes are going to be the tax replaced. We’ll see how this impacts the price of the market. And I guess if they’re going to fall.

Dror Bashan: As you know, it’s difficult to see today. What will be, you know, the change in the tariffs, and it’s a bit volatile. And it gets a very, you know, well-established company. They know what they’re doing. So I’m sure we are in very good hands. Like, you know, in very good commercial hands, by the way.

Daniel Smith: Got it. Thank you.

Operator: Thank you. The next question is coming from Dara Vashish, a private investor. Please go ahead.

Dara Vashish: Thank you very much for taking my call, gentlemen. You said in your statement this morning that you expect minimal revenues going forward on the R&D line item. Basically, from Chiesi. Can you tell me what the approximate amount of the value of the contract left to be paid out by Chiesi is? Thank you.

Eyal Rubin: Yes. So let me, let me explain what I said. So research and development revenues that we recorded in the past were associated in connection with a license and IND agreement with Chiesi. It means to say that when they invested in El Fabrio back then, so they funded part of the development cost. They put a down payment. All of this, according to US GAAP, has to be linearly divided along the years of the life of the agreement or the development. This is the reason that in past years, this line item was greater way greater than the minimal revenue that we’re showing. Going forward, the only thing that will appear is not going to be the commercial milestones because that’s going to be part of the sales, but only the regulatory milestones.

And the regulatory milestones, if I have to and again, that’s a very, you know, and it’s a far estimate. Nobody knows that it has to do with the once every two weeks, once every four weeks, I’m sorry, in The US. If approved, once every four weeks in Europe, if approved, in the future we’ll be able to show security. Basically, those are the regulatory milestones that are left. So if you want me to quantify them, then that can be up to something like $75 million. But obviously, I think it’s minimal to be at this point because they are milestone by milestone. It depends, yeah, when they should get it.

Dara Vashish: If I could simply clarify, you were saying that there’s approximately $75 million left to pay out on the agreement with Chiesi?

Eyal Rubin: No. That’s not what I’m saying. I’m saying that under this line item, the research and development revenues, the $75 million potential milestones, the global potential milestones on the Chiesi agreement, includes commercial milestones, and growth of milestone any number between, I don’t know, up to half a billion dollars. That makes sense. It all depends on their sales. And when they hit, the various thresholds in the various agreements, to remind everybody on the call that we’re talking about two separate agreements, ex-US and US, and the last move of separately. Paid and accrued, so in theory, the overall, you know, milestone to be paid can be potentially up to half a billion dollars.

Dara Vashish: Okay. Thank you very much. Appreciate your answer.

Eyal Rubin: You’re welcome. Thank you.

Operator: We’re showing no further questions at this time. I’d like to turn the floor back over to Mr. Bashan for closing comments.

Dror Bashan: So thank you, and thank you, everybody, that joined the call. I would like to emphasize again what we have said in the past. As I mentioned, Chiesi’s sales efforts are strong. The pace of recruitment of commercial patients is very good and actually beyond our expectations. And Protalix BioTherapeutics sells to Chiesi’s inventory, so we actually manage the inventory sales. And not directly to the market. And beyond that, we are focused on building our pipeline. Of course, we will initiate the phase two in gout later this year. So we look forward to updating you as the progress continues.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

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