Protalix BioTherapeutics, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, operator, and welcome to the Protalix BioTherapeutics Q2 2026 financial results and business update conference call.

With me today are Dror Bashan, President and CEO, and Gilad Mamlok, Senior Vice President and Chief Financial Officer. A press release announcing the financial results and corporate updates was issued this morning and is available now on the Protalix website. Please take a moment to read the disclaimer about 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 actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and in Protalix's filings with the U.S. Securities and Exchange Commission. I will now turn the call over to Mr. Bashan.

Dror. Thank you, Mike, and thank you everyone for joining this morning.

Our results today reflect the strengths of our profitable commercial partnerships, and we remain confident in our outlook for this year. We enter the second half of 2026 with Elfabrio sales through Chiesi continuing to drive growth of our business. Gilad will walk through the financial details, but the key driver in the first half was continued growth in Elfabrio's revenues, together with the previously reported $25 million Chiesi milestone payment recognized in the first quarter of this year. Elfabrio sales through Chiesi continues to drive revenues from selling group, and this performance reflects further global penetration of Elfabrio and continued growth. This continued growth keeps us on track with our full year 2026 revenue guidance.

With the global Fabry market projected to reach approximately $3.2 billion by 2031, Elfabrio is positioned to capture 15%-20% of this market, supported by our partnership with Chiesi, which is strengthened by the recent approval of the once every four weeks dosing regimen in Europe. We believe our revenue mix, particularly the continuing expansion of Elfabrio, position us well for sustained long-term value creation and profitability. On the clinical side, PRX-115 continues to advance as planned. PRX-115 is designed as a long-acting differentiated uricase, and we believe it has the potential to meaningfully improve quality of life for patients with uncontrolled gout, which could be a significant inflection point and value driver for Protalix. There is a significant unmet need in this population, and we expect top-line results from our RELEASE study in the second half of 2027.

Beyond PRX-115, our strategy remains centered on rare renal diseases, where we believe our capabilities and platform offer a clear advantage, and we remain focused on execution across our partnerships and pipeline. We believe our business model limits downside risks while preserving meaningful upside as we advance our clinical programs. With that, I will turn the call over to Gilad for a detailed review of our financial results and outlook.

Gilad, please. Thank you, Dror.

For the second quarter of 2026, total revenues were $19.9 million compared to $15.7 million in the second quarter of 2025. For the first half of 2026, total revenues were $53.6 million compared to $25.8 million for the first half of 2025. For the second quarter of 2026, revenues from selling goods were $19.8 million compared to $15.4 million in the second quarter of 2025, an increase of $4.4 million. For the first half of 2026, revenues from selling goods were $27.2 million compared to $25.4 million for the first half of 2025, an increase of $1.8 million. The increase was driven mainly by higher sales for Elfabrio to Chiesi.

For the remainder of the results, I will report only on the second quarter, and you can refer to this morning's press release for additional year-to-date data. Cost of revenues was $7.8 million compared to $5.9 million in the same period in 2025, an increase of $1.9 million. The increase was mainly attributable to higher sales volumes to Chiesi.

Partially offset by lower sales to Pfizer. R&D expenses were $4.4 million, down from $6 million in the prior year period, a decrease of $1.6 million. The decrease was mainly driven by a $2.1 million grant recorded under the new R&D law as a reduction of R&D expenses. As of 2026, this grant is available for us under the R&D law on an ongoing basis. We expect to continue to incur expenses as the RELEASE study progresses and additional preclinical and clinical programs advance. SG&A expenses were $3.1 million, up $0.5 million from the prior year period, largely attributable to higher salary and related expenses. Finance income net was $0.2 million compared to financial expenses net of $0.5 million in the second quarter of 2025. The change was mainly due to exchange rate fluctuations.

Taxes on income were $1.1 million compared to $0.5 million in the second quarter of 2025, an increase of $0.6 million. This increase resulted mainly from taxes on income derived from global intangible low tax income or GILTI, resulting from limitations under IRC Section 174. Net income for the quarter was $3.8 million, or $0.05 per share, basic and diluted.

Compared to net income of $164,000 or $0 per share, basic and diluted, in the second quarter of 2025. Turning to the balance sheet, cash equivalents, and short-term bank deposits, they totaled $40.7 million as of June 30, 2026. We have no outstanding debt or warrants, providing us with substantial financial flexibility to support our continued pipeline advancements. As we have noted in prior quarters, our revenues can vary from quarter to quarter based on the timing of shipments and orders from our partners. We believe it is more useful to evaluate our business on a full year basis, and we remain confident in our full year 2026 guidance. With that, I will turn the call back over to Dror.

Thank you, Gilad. In closing, positive revenue trends keeps us firmly on track to meet our full year 2026 guidance.