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What changed in Protalix BioTherapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Protalix BioTherapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+538 added−528 removedSource: 10-K (2024-03-14) vs 10-K (2023-02-27)

Top changes in Protalix BioTherapeutics, Inc.'s 2023 10-K

538 paragraphs added · 528 removed · 368 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

151 edited+48 added−86 removed191 unchanged
Biggest changeAt the meeting, we and Chiesi discussed the scope of the anticipated MAA submission for the European Union, and the Rapporteur and Co-Rapporteur were generally supportive of a planned MAA submission. ● On March 18, 2022, we, together with Chiesi, announced final results from our BRIGHT study, a phase III clinical trial of PRX-102 for the treatment of Fabry disease designed to evaluate the safety, efficacy and pharmacokinetics of PRX-102 treatment, 2 mg/kg every four weeks, in up to 30 patients with Fabry disease previously treated with a commercially available ERT (Replagal ® (agalsidase alfa; marketed by Takeda Pharmaceutical Company Limited (after the acquisition of Shire Plc)) or Fabrazyme ® (agalsidase beta; marketed by Sanofi after the acquisition of Genzyme)). ● On April 4, 2022, we, together with Chiesi, announced topline results from the BALANCE study evaluating PRX-102, 1 mg/kg, administered every two weeks, compared to agalsidase beta for the treatment of Fabry disease. 6 Table of Contents ● On June 30, 2022, we held our Annual Meeting at which our stockholders: (1) elected the six persons nominated by our Board of Directors to serve as directors of our Company; (2) approved, on a non-binding, advisory basis, the compensation of our named executive officers; (3) adopted the amendments to the Plan to increase the number of shares of common stock available under our Amended and Restated Pro BioTherapeutics, Inc. 2006 Stock Incentive Plan, as amended , from 5,725,171 shares to 8,475,171 shares and to amend certain other terms of the Plan; (4) approved the Charter Amendment; and (5) ratified the appointment of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member of PricewaterhouseCoopers International Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2022. ● On June 30, 2022, Shmuel “Muli” Ben Zvi, Ph.D. joined our Board of Directors.
Biggest changeWe hosted an informational booth at the symposium. ● On March 21, 2023, the first patient was dosed in our phase I First-in-Human (FIH) clinical trial of PRX-115. ● Our decision to voluntarily delist our common stock from the Tel Aviv Stock Exchange took effect on March 22, 2023. ● On May 5, 2023, we announced that the EC had granted marketing authorization to Elfabrio in the European Union for the treatment of adult patients with Fabry disease. ● On May 10, 2023, we announced that the FDA had approved Elfabrio in the United States for the treatment of adult patients with Fabry disease. ● On June 28, 2023, we held our Annual Meeting of Stockholders at which our stockholders: (1) elected the seven persons nominated by our Board of Directors to serve as directors of our Company; (2) approved, on a non-binding, advisory basis, the compensation of our named executive officers; (3) approved, on a non-binding, advisory basis, one year as the frequency at which we will solicit stockholder approval of the compensation of our named executive officers; (4) adopted amendments to our Amended and Restated 2006 Stock Incentive Plan, as amended , to increase the number of shares of common stock available under such plan from 8,475,171 shares to 12,475,171 shares and to amend certain other terms of the plan; and (5) ratified the appointment of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member of PricewaterhouseCoopers International Limited, as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
Patients who completed the BALANCE , BRIDGE and BRIGHT studies, and the extension of the phase I/II study, were offered the opportunity to continue PRX-102 treatment in one of two long-term open-label extension studies.
Extension Studies Patients who completed the BALANCE , BRIDGE and BRIGHT studies, and the extension of the phase I/II study, were offered the opportunity to continue PRX-102 treatment in one of two long-term open-label extension studies.
Under the Research Law and the regulations promulgated thereunder, NATI Council may allow the transfer outside of Israel of know-how derived from an approved program and the related manufacturing rights in limited circumstances which are currently as follows: ● in the event of a sale of know-how itself to a non-affiliated third party, provided that upon such sale the owner of the know-how pays to NATI an amount, in cash, as set forth in the Research Law (and the regulations promulgated thereunder).
Under the Research Law and the regulations promulgated thereunder, the NATI Council may allow the transfer outside of Israel of know-how derived from an approved program and the related manufacturing rights in limited circumstances which are currently as follows: ● in the event of a sale of know-how itself to a non-affiliated third party, provided that upon such sale the owner of the know-how pays to NATI an amount, in cash, as set forth in the Research Law (and the regulations promulgated thereunder).
PRX-119 PRX-119 is our plant cell-expressed PEGylated recombinant human DNase I product candidate which we are designing to have an elongated half-life in the circulation for the potential treatment of NETs-related diseases. NETs, Neutrophil extracellular traps, are web-like structures, released by activated neutrophils that trap and kill a variety of microorganisms.
PRX-119 PRX-119 is our plant cell-expressed PEGylated recombinant human DNase I product candidate which we are designing to have an elongated half-life in the circulation for the potential treatment of NETs-related diseases. NETs, or Neutrophil extracellular traps, are web-like structures released by activated neutrophils that trap and kill a variety of microorganisms.
Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize competitive products or technologies on their own through collaborations with pharmaceutical and biotechnology companies. With respect to Gaucher disease, we face competition from two ERTs, Sanofi Genzyme’s Cerezyme and Takeda’s (Shire) Vpriv.
Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize competitive products or technologies on their own through collaborations with pharmaceutical and biotechnology companies. With respect to Gaucher disease, we face competition primarily from two ERTs, Sanofi Genzyme’s Cerezyme and Takeda’s (Shire) Vpriv.
Gaucher disease, also known as glucocerebrosidase, or GCD, deficiency, is a rare genetic autosomal recessive disorder and one of the most common Lysosomal Storage Disorders in the world. It is one of a group of disorders that affect specific enzymes that normally break down fatty substances for reuse in the cells.
Gaucher disease, also known as glucocerebrosidase, or GCD, deficiency, is a rare genetic autosomal recessive disorder and one of the most common Lysosomal Storage Disorders, or LSDs, in the world. It is one of a group of disorders that affect specific enzymes that normally break down fatty substances for reuse in the cells.
Protalix Ltd. is also eligible to receive additional payments of up to a maximum of $320.0 million in regulatory and commercial milestone payments. Protalix Ltd. agreed to manufacture all of the PRX-102 needed for all purposes under the agreement, subject to certain exceptions, and Chiesi will purchase PRX-102 from Protalix Ltd., subject to certain terms and conditions.
Protalix Ltd. is also eligible to receive additional payments of up to a maximum of $320.0 million, in the aggregate, in regulatory and commercial milestone payments. Protalix Ltd. agreed to manufacture all of the PRX-102 needed for all purposes under the agreement, subject to certain exceptions, and Chiesi will purchase PRX-102 from Protalix Ltd., subject to certain terms and conditions.
In addition, we intend to use our manufacturing space to produce all of the drug substance needed in connection with the clinical trials for our other product candidates. In 2017, the FDA approved the supplemental New Drug Application, sNDA, we submitted to allow us to convert our manufacturing facility from a single dedicated product facility to a multi-product facility.
We intend to use our manufacturing space to produce all of the drug substance needed in connection with the clinical trials for our other product candidates. In 2017, the FDA approved the supplemental New Drug Application (sNDA) we submitted to allow us to convert our manufacturing facility from a single dedicated product facility to a multi-product facility.
These regulations include: ● the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; ● the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics, and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; 28 Table of Contents ● the FDCA, which among other things, strictly regulates drug and biologic product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
These regulations include: ● the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; 26 Table of Contents ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; ● the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics, and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; ● the FFDCA, which among other things, strictly regulates drug and biologic product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
The Letter Agreement changed the obligations of both us and Chiesi under the License Agreements with respect to, among other things, the evaluation, selection and establishment of an initial alternate source of commercial fill/finish services for PRX-102.
The Letter Agreement changed the obligations of both us and Chiesi under the Chiesi Agreements with respect to, among other things, the evaluation, selection and establishment of an initial alternate source of commercial fill/finish services for PRX-102.
In addition, the Letter Agreement amended certain provisions of the License Agreements to reflect the appointment of Chiesi as a supplier to our company of commercial fill/finish services and the potential establishment of an initial alternate source of commercial fill/finish services.
In addition, the Letter Agreement amended certain provisions of the Chiesi Agreements to reflect the appointment of Chiesi as a supplier to our company of commercial fill/finish services and the potential establishment of an initial alternate source of commercial fill/finish services.
The process required by the FDA before a biological product or drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other regulations; ● Submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin; ● Performance of adequate and well-controlled clinical trials according to Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed biological product or drug for its intended use; ● Submission to the FDA of a BLA for a new biological product or a new drug application, or NDA, for a new drug; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity; and ● FDA review and approval of the BLA or NDA.
The process required by the FDA before a biological product or drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other regulations; ● Submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin; ● Performance of adequate and well-controlled clinical trials according to Good Clinical Practices, or GCP, to establish the safety and efficacy of the proposed biological product or drug for its intended use; 21 Table of Contents ● Submission to the FDA of a BLA for a new biological product or a new drug application, or NDA, for a new drug; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity; and ● FDA review and approval of the BLA or NDA.
The Brazilian MoH clinical treatment guidelines state that BioManguinhos alfataliglicerase is the therapy of choice for newly diagnosed patients. BioManguinhos alfataliglicerase is currently estimated to be used by approximately 25% of Gaucher patients in Brazil.
The Brazilian MoH clinical treatment guidelines (PCDT) state that BioManguinhos alfataliglicerase is the therapy of choice for newly diagnosed patients. BioManguinhos alfataliglicerase is currently estimated to be used by approximately 25% of Gaucher patients in Brazil.
In addition, the amendment provides that if the purchaser of the know-how gives the selling Israeli company the right to exploit the know-how by way of an exclusive, irrevocable and unlimited license, the research committee may approve such transfer in special cases without requiring a cash payment. ● in the event of a sale of a company which is the owner of know-how, pursuant to which the company ceases to be an Israeli company, provided that upon such sale, the owner of the know-how makes a cash payment to NATI as set forth in the Research Law (and the regulations promulgated thereunder). ● in the event of an exchange of know-how such that in exchange for the transfer of know-how outside of Israel, the recipient of the know-how transfers other know-how to the company in Israel in a manner in which NATI is convinced that the Israeli economy realizes a greater, overall benefit from the exchange of know-how.
In addition, the amendment provides that if the purchaser of the know-how gives the selling Israeli company the right to exploit the know-how by way of an exclusive, irrevocable and unlimited license, the research committee may approve such transfer in special cases without requiring a cash payment. ● in the event of a sale of a company which is the owner of know-how, pursuant to which the company ceases to be an Israeli company, provided that upon such sale, the owner of the know-how makes a cash payment to NATI as set forth in the Research Law (and the regulations promulgated thereunder). ● in the event of an exchange of know-how such that in exchange for the transfer of know-how outside of Israel, the recipient of the know-how transfers other know-how to the company in Israel in a manner in 30 Table of Contents which NATI is convinced that the Israeli economy realizes a greater, overall benefit from the exchange of know-how.
The MAA submission includes a comprehensive set of preclinical, clinical and manufacturing data compiled from our completed and ongoing clinical studies evaluating PRX-102 as a potential alternative treatment for adult patients with Fabry disease. The submission was supported by the 12–month interim data analysis generated from our BALANCE study, which was released in June 2021.
The MAA submission included a comprehensive set of preclinical, clinical and manufacturing data compiled from our completed and ongoing clinical studies evaluating PRX-102 as a potential alternative treatment for adult patients with Fabry disease. The submission was supported by the 12–month interim data analysis generated from our BALANCE study, which was released in June 2021.
If Protalix Ltd. receives approval to manufacture the products developed with government grants outside of Israel, it will be required to pay an increased total amount of royalties (possibly up to 300% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside of Israel, as well as at a possibly increased royalty rate.
If Protalix Ltd. receives approval to manufacture the products developed with government grants outside of Israel, it will be required to pay an increased total amount of royalties (possibly up to 150% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside of Israel, as well as at a possibly increased royalty rate.
Each of these documents is also available in print, free of charge, to any stockholder who requests a copy by addressing a request to: Protalix BioTherapeutics, Inc. 2 University Plaza, Suite 100 Hackensack, NJ 07601 Attn: Mr. Eyal Rubin, Sr. Vice President and Chief Financial Officer ​ 34 Table of Contents
Each of these documents is also available in print, free of charge, to any stockholder who requests a copy by addressing a request to: Protalix BioTherapeutics, Inc. 2 University Plaza, Suite 100 Hackensack, NJ 07601 Attn: Mr. Eyal Rubin, Sr. Vice President and Chief Financial Officer ​ 32 Table of Contents
A company that has elected to participate in the alternative benefits program and that subsequently pays a dividend out of the income derived from the portion of its facilities that have been granted Approved Enterprise status during the tax exemption period will be subject to corporate tax in respect of the amount of dividend distributed at the rate that would have been applicable had the company not elected the alternative benefits program (generally 10% to 23%, depending on the extent to which non-Israeli shareholders hold such company’s shares).
A company that has elected to participate in the alternative benefits program and that subsequently pays a dividend out of the income derived from the portion of its facilities that have been granted Approved Enterprise status during the tax exemption period will be subject to corporate tax in respect of the amount of dividend distributed at the rate that would 28 Table of Contents have been applicable had the company not elected the alternative benefits program (generally 10% to 23%, depending on the extent to which non-Israeli shareholders hold such company’s shares).
To date, two variants of recombinant uricases are approved for marketing: (i) Krystexxa ® (pegloticase) for treatment of chronic gout refractory to conventional therapy (gout patients that have contraindication/failure of other lowering uric acid treatments) and (ii) Elitek ® , indicated for the treatment of tumor lysis syndrome but not gout.
To date, two variants of recombinant uricases are approved for marketing: (i) Krystexxa ® (pegloticase) for treatment of chronic gout refractory to conventional therapy (gout patients who have contraindication/failure of other lowering uric acid treatments) and (ii) Elitek ® , indicated for the treatment of tumor lysis syndrome but not gout.
The ProCellEx reactors are easy to use and maintain, allowing for rapid horizontal scale-up and do not involve the risk of mammalian viral contamination. Our bioreactors are well-suited for plant cell growth using a simple, inexpensive, chemically defined growth medium.
The ProCellEx reactors are easy to use and maintain, allow for rapid horizontal scale-up and do not involve the risk of mammalian viral contamination. Our bioreactors are well-suited for plant cell growth using a simple, inexpensive, chemically defined growth medium.
As part of the meeting minutes provided by the FDA, which included the preliminary comments and meeting discussion, the FDA, in principle, agreed that the data package proposed to the FDA for a BLA resubmission has the potential to support a traditional approval of PRX-102 for the treatment of Fabry disease.
As part of the meeting minutes provided by the FDA, which included the preliminary comments and meeting discussion, the FDA, in principle, agreed that the data package proposed to the FDA for a BLA resubmission had the potential to support a traditional approval of PRX-102 for the treatment of Fabry disease.
Biologics are subject to regulation by the FDA under the FDCA, the Public Health Service Act, and related regulations and other federal, state and local laws and regulations. Biological products include a wide variety of products including vaccines, blood and blood components, gene therapies, tissue and proteins.
Biologics are subject to regulation by the FDA under the FFDCA, the Public Health Service Act, and related regulations and other federal, state and local laws and regulations. Biological products include a wide variety of products including vaccines, blood and blood components, gene therapies, tissue and proteins.
For a description of such restrictions, please see “Risk Factors—Risks Relating to Our Operations in Israel.” NATI approval is not required for the export of any products resulting from the research or development or for the licensing of any technology in the ordinary course of business.
For a description of such restrictions, please see “ Risk Factors—Risks Relating to Our Operations in Israel .” NATI approval is not required for the export of any products resulting from the research or development or for the licensing of any technology in the ordinary course of business.
The Industry Encouragement Law defines “Industrial Company” as a company resident in Israel and incorporated in Israel, that derives 90% or more of its 32 Table of Contents income in any tax year (other than specified kinds of passive income such as capital gains, interest and dividends) from an “Industrial Enterprise” operating in Israel (including Judea & Samaria territories and the Gaza strip), that it owns.
The Industry Encouragement Law defines “Industrial Company” as a company resident in Israel and incorporated in Israel, that derives 90% or more of its income in any tax year (other than specified kinds of passive income such as capital gains, interest and dividends) from an “Industrial Enterprise” operating in Israel (including Judea & Samaria territories and the Gaza strip), that it owns.
Global Pending Jurisdictions Granted Jurisdictions Nominal Expiry Production of High Mannose Proteins in Plant Culture/PCT/ Il2004 000181 N/A Japan, Israel, Canada, Russian Federation, Mexico, India, Australia, South Africa, Republic of Korea, Singapore, Europe, Hong Kong, Ukraine, China, USA, Brazil ​ 2024(1) Cell/Tissue Culturing Device, System and Method/PCT/Il2005/ 000228 N/A Israel 2025 Large Scale Disposable Bioreactor/PCT/Il2008/000614 N/A Australia, Canada, China, Europe, Hong Kong, India, Israel, Republic of Korea, Russian Federation, Singapore, South Africa, USA, Brazil ​ 2028(2) Stabilized Alpha-galactosidase and uses thereof/PCT/Il2011/ 000209 Brazil Canada, South Africa, Russian Federation, Singapore, Israel, India, New Zealand, Republic of Korea, Australia, China, Japan, USA, Europe, Hong Kong, India, Brazil ​ 2031 Nucleic Acid Construct for Expression of Alpha-galactosidase in Plants and Plant Cells/PCT/ Il2011/000719 Brazil India, China, Republic of Korea, Japan, Israel, Europe, Hong Kong, USA 2024(2) Therapeutic Regimen For The Treatment of Fabry Using Stabilized Alpha-galactosidase/ PCT/Il2018/050018 USA, Europe, Brazil, Japan, Canada, Australia, Chile, Israel, Republic of Korea, China, New Zealand, Russian Federation, Mexico, Hong Kong South Africa 2038 18 Table of Contents Dry Powder Formulations of DNase 1/PCT/Il2013/050094 N/A Israel, USA 2033 DNase I Polypeptides, Polynucleotides Encoding Same, Methods of Producing DNase I and uses thereof in Therapy/PCT/ Il2013/050097 Brazil Europe, Israel 2033 Inhalable Liquid Formulations of DNase I/PCT/Il2013/050096 N/A Israel, USA 2033 Modified DNase and uses thereof/ PCT/Il2016/050003 Europe, Canada, China, New Zealand, Israel, Hong Kong, South Africa USA, Australia, Mexico 2036 Use of Plant Cells Expressing a TNF Alpha Polypeptide Inhibitor in Therapy/PCT/IL2014/050231 N/A Israel 2034 Removal of Constructs from Transformed Cells/PCT/IL2019/ 051266 USA, Israel, Japan, New Zealand, Australia N/A N/A Long-Acting DNase/PCT/IL2021/051207 N/A N/A N/A Dicer-Like Knock-Out Plant Cells/ PCT/IL2021/051194 N/A N/A N/A Modified Uricase and Uses Thereof/PCT/IL2021/051305 N/A N/A N/A (1) Patent granted in Australia expires in 2029.
Global Pending Jurisdictions Granted Jurisdictions Nominal Expiry Production of High Mannose Proteins in Plant Culture/PCT/ Il2004 000181 N/A Japan, Israel, Canada, Russian Federation, Mexico, India, Australia, South Africa, Republic of Korea, Singapore, Europe, Hong Kong, Ukraine, China, USA, Brazil 2024(1) (3) Plant Cell/Tissue Culturing Device, System and Method/PCT/Il2005/ 000228 N/A Israel 2025 Large Scale Disposable Bioreactor/PCT/Il2008/000614 N/A Australia, Canada, China, Europe, Hong Kong, India, Israel, Republic of Korea, Russian Federation, Singapore, South Africa, USA, Brazil 2028(2) Stabilized Alpha-galactosidase and uses thereof/PCT/Il2011/ 000209 Brazil Canada, South Africa, Russian Federation, Singapore, Israel, India, New Zealand, Republic of Korea, Australia, 2031(3) 16 Table of Contents China, Japan, USA, Europe, Hong Kong, India, Brazil Nucleic Acid Construct for Expression of Alpha-galactosidase in Plants and Plant Cells/PCT/ Il2011/000719 N/A India, China, Republic of Korea, Japan, Israel, Europe, Hong Kong, USA, Brazil 2024(2) Therapeutic Regimen For The Treatment of Fabry Using Stabilized Alpha-galactosidase/ PCT/Il2018/050018 USA, Europe, Brazil, Japan, Canada, Australia, Chile, Israel, Republic of Korea, China, Mexico, Hong Kong South Africa, New Zealand, Russian Federation 2038 Dry Powder Formulations of DNase 1/PCT/Il2013/050094 N/A Israel, USA 2033 DNase I Polypeptides, Polynucleotides Encoding Same, Methods of Producing DNase I and uses thereof in Therapy/PCT/ Il2013/050097 N/A Europe, Israel, Brazil 2033 Inhalable Liquid Formulations of DNase I/PCT/Il2013/050096 N/A Israel, USA 2033 Modified DNase and uses thereof/ PCT/Il2016/050003 Europe, Canada, China, Hong Kong USA, Australia, Mexico, Israel, New Zealand, South Africa 2036 Use of Plant Cells Expressing a TNF Alpha Polypeptide Inhibitor in Therapy/PCT/IL2014/050231 N/A Israel 2034 Removal of Constructs from Transformed Cells/PCT/IL2019/ 051266 USA, Israel, Japan, New Zealand, Australia N/A N/A Long-Acting DNase/PCT/IL2021/051207 Canada, Israel, USA, Japan, Europe, Hong Kong, Republic of Korea, China N/A N/A Dicer-Like Knock-Out Plant Cells/ PCT/IL2021/051194 Israel, USA, Japan, Europe, Hong Kong, Republic of Korea, China N/A N/A Modified Uricase and Uses Thereof/PCT/IL2021/051305 Japan, Canada, Brazil, USA, Israel, Mexico, Europe, Republic of Korea, China N/A N/A Methods of treating diseases associated with elevated uric acid N/A N/A N/A ​ (1) Patent granted in Australia expires in 2029.
We are also entitled to a non-exclusive worldwide license to make and have made other proteins expressed by using Icon’s technology. As consideration for the license, we are obligated to make royalty payments equal to varying low, single-digit percentages of net sales of products by us, our affiliates, or any sublicensees under the agreement.
We are also entitled to a non-exclusive worldwide license to make and have made other proteins expressed by using Icon’s technology. As consideration for the license, we are obligated to make royalty payments equal to varying low, single-digit percentages of net sales of products by us, our affiliates, or any 17 Table of Contents sublicensees under the agreement.
Further, 26 Table of Contents the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, warning letters, holds on clinical trials, product recalls or seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties.
Further, the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, warning letters, holds on clinical trials, product recalls or seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties.
The F/F Agreement will expite December 31, 2025, unless terminated earlier in accordance with its terms and may be extended by mutual agreement in writing for an additional period of seven years.
The F/F Agreement will expire December 31, 2025, unless terminated earlier in accordance with its terms and may be extended by mutual agreement in writing for an additional period of seven years.
As of December 31, 2022, our patent portfolio consisted of several patent families (consisting of patents and/or patent applications) covering our technology, protein expression methodologies and system and product candidates, as follows: Patent Name/Int. App. No.
As of December 31, 2023, our patent portfolio consisted of several patent families (consisting of patents and/or patent applications) covering our technology, protein expression methodologies and system and product candidates, as follows: ​ Patent Name/Int. App. No.
Orphan drug designation is generally given to medicinal products that treat conditions for which no current therapy exists or are expected to bring a significant benefit to patients over existing therapies. Third Party Payor Coverage and Reimbursement Coverage and reimbursement status of any approved therapy carries uncertainty and risk.
Orphan drug designation is generally given to medicinal products that treat conditions for which no current therapy exists or are expected to bring a significant benefit to patients over existing therapies. 25 Table of Contents Third Party Payor Coverage and Reimbursement Coverage and reimbursement status of any approved therapy carries uncertainty and risk.
Cardiac parameters, including LVM, LVMI and EF, remained stable with no cardiac fibrosis development detected. In conclusion, an improvement of over 40% in disease severity was shown as measured by the Mainz Severity Score Index, or MSSI, a score compiling the different elements of the disease severity including neurological, renal and cardiovascular parameters.
Cardiac parameters, including LVM, LVMI and EF, remained stable with no cardiac fibrosis development detected. In conclusion, an improvement of over 40% in disease severity was shown as measured by the Mainz Severity Score Index, or MSSI, a score compiling the different elements of the disease severity 13 Table of Contents including neurological, renal and cardiovascular parameters.
An Approved Enterprise may elect to forego any entitlement to the grants otherwise available under the Investment Law and, instead, participate in an alternative benefits program under which the undistributed income (after deductions and 29 Table of Contents offsets) from the Approved Enterprise is exempt from corporate tax for a defined period of time.
An Approved Enterprise may elect to forego any entitlement to the grants otherwise available under the Investment Law and, instead, participate in an alternative benefits program under which the undistributed income (after deductions and offsets) from the Approved Enterprise is exempt from corporate tax for a defined period of time.
The Commission maintains an Internet site that contains reports, 33 Table of Contents proxy and information statements and other information regarding issuers that file electronically with the Commission at www.sec.gov . Additionally, from time to time, we provide notifications of material news including press releases and conferences on our website.
The Commission maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission at www.sec.gov . Additionally, from time to time, we provide notifications of material news including press releases and conferences on our website.
Under the F/F Agreement, we agreed to supply Chiesi with drug substance for PRX-102 and, following relevant technology and technical information transfer 21 Table of Contents activities, Chiesi has agreed, among other things, to provide us with commercial fill/finish services for PRX-102, including to support the anticipated global launch of PRX-102.
Under the F/F Agreement, we agreed to supply Chiesi with drug substance for PRX-102 and, following relevant technology and technical information transfer activities, Chiesi has agreed, among other things, to provide us with commercial fill/finish services for PRX-102, including to support the anticipated global launch of PRX-102.
As of December 31, 2022, NATI approved grants in respect of Protalix Ltd.’s continuing operations totaling approximately $53.2 million (before interest, as described below), measured from inception.
As of December 31, 2023, NATI approved grants in respect of Protalix Ltd.’s continuing operations totaling approximately $53.2 million (before interest, as described below), measured from inception.
A majority of the patients who completed the trial opted to continue receiving PRX-102 in an open-label, 60-month extension study under which all patients were switched to receive 1 mg/kg of the drug, the selected dose for our BALANCE and BRIDGE studies.
Of the patients who completed the trial, 10 patients opted to continue receiving PRX-102 in an open-label, 60-month extension study under which all patients were switched to receive 1 mg/kg of the drug, the selected dose for our BALANCE and BRIDGE studies.
This benefit is an incentive granted by the Israeli government regardless of whether the alternative benefits program is elected. 30 Table of Contents The benefits available to an Approved Enterprise are conditioned upon terms stipulated in the Investment Law and its regulations and the criteria set forth in the applicable certificate of approval.
This benefit is an incentive granted by the Israeli government regardless of whether the alternative benefits program is elected. The benefits available to an Approved Enterprise are conditioned upon terms stipulated in the Investment Law and its regulations and the criteria set forth in the applicable certificate of approval.
Protalix Ltd. received an upfront, non-refundable, non-creditable payment of $25.0 million from Chiesi and was entitled to additional payments of up to a maximum of $20.0 million to cover development costs for PRX-102, capped at $7.5 million per year.
Protalix Ltd. received an upfront, non-refundable, non-creditable payment of $25.0 million from 19 Table of Contents Chiesi and was entitled to additional payments of up to a maximum of $20.0 million to cover development costs for PRX-102, capped at $7.5 million per year.
We developed ProCellEx based on our plant cell culture technology for the development, expression and manufacturing of recombinant proteins, which are the essential foundation of modern biotechnology.
We developed ProCellEx based on our plant cell culture technology for the development, expression and manufacture of recombinant proteins which are the essential foundation of modern biotechnology.
The initial BLA for PRX-102 was submitted to the FDA on May 27, 2020 under the FDA’s Accelerated Approval pathway, and the submission was subsequently accepted by the FDA and granted Priority Review designation. However, in April 2021, the FDA issued a CRL in response to the initial BLA.
The initial BLA for PRX-102 was submitted to the FDA on May 27, 2020 under the FDA’s Accelerated Approval pathway, and the submission was subsequently accepted by the FDA and granted Priority Review designation. However, in April 2021, the FDA issued a complete response letter, or CRL, in response to the initial BLA.
There were no deaths in this study. 13 Table of Contents Considering that in the trial, patients in the PRX-102 arm were exposed for the first time to the novel enzyme, tolerability data appear favorable for PRX-102 and in line with what was observed in the previous clinical studies of PRX-102.
There were no deaths in this study. Considering that in the trial patients in the PRX-102 arm were exposed for the first time to the novel enzyme, tolerability data appear favorable for PRX-102 and in-line with what was observed in the previous clinical studies of PRX-102.
For the first 10-year period after the execution of the Amended Pfizer Agreement, we have agreed to sell 20 Table of Contents drug substance to Pfizer for the production of Elelyso, subject to certain terms and conditions, and Pfizer maintains the right to extend the supply period for up to two additional 30-month periods, subject to certain terms and conditions.
For the first 10-year period after the execution of the Amended Pfizer Agreement, we have agreed to sell drug substance to Pfizer for the production of Elelyso, subject to certain terms and conditions, and Pfizer maintains the right to extend the supply period for up to two additional 30-month periods, subject to certain terms and conditions.
In order to qualify for these incentives, an Approved Enterprise is required to comply with the requirements of the Investment Law, and Letter of approval received by Protalix Ltd. Protalix Ltd. will continue to enjoy the tax benefits under the pre-revision provisions of the Investment Law.
In order to qualify for these incentives, an Approved Enterprise is required to comply with the requirements of the Investment Law, and Letter of approval received by Protalix Ltd. 27 Table of Contents Protalix Ltd. will continue to enjoy the tax benefits under the pre-revision provisions of the Investment Law.
In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.
In addition, changes to the manufacturing process generally 24 Table of Contents require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.
Our technology allows for many unique advantages, including: biologic optimization; an ability to handle complex protein expressions; flexible manufacturing with improvements through efficiencies, enhancements and/or rapid 3 Table of Contents horizontal scale-ups; a simplified production process; elimination of the risk of viral contaminations from mammalian components; and intellectual property advantages.
Our ProCellEx technology allows for many unique advantages, including: biologic optimization; an ability to handle complex protein expressions; flexible manufacturing with improvements through efficiencies, enhancements and/or rapid horizontal scale-ups; a simplified production process; elimination of the risk of viral contaminations from mammalian components; and intellectual property advantages.
Further, Icon may terminate the agreement in connection with certain events relating to a wind up or bankruptcy, 19 Table of Contents if we make a general assignment for the benefit of our creditors, or if we cease to conduct operations for a certain period.
Further, Icon may terminate the agreement in connection with certain events relating to a wind up or bankruptcy, if we make a general assignment for the benefit of our creditors, or if we cease to conduct operations for a certain period.
Under the Chiesi Ex-US Agreement, Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of the agreement, and Protalix Ltd. was entitled to additional payments of up to $25.0 million in development costs in the aggregate, capped at $10.0 million per year.
Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of the agreement, and Protalix Ltd. was entitled to additional payments of up to $25.0 million in development costs in the aggregate, capped at $10.0 million per year.
Item 1. Business We are a biopharmaceutical company focused on the development, production and commercialization of recombinant therapeutic proteins produced by our proprietary ProCellEx ® plant cell-based protein expression system. We are the first and only company to gain FDA approval of a protein produced through plant cell-based expression in suspension.
Item 1. Business We are a commercial stage biopharmaceutical company focused on the development, production and commercialization of recombinant therapeutic proteins produced via our proprietary ProCellEx ® plant cell-based protein expression system. We are the first and only company to gain FDA approval of a protein produced through plant cell-based expression in suspension.
Once an IND is in 23 Table of Contents effect, each new clinical protocol and any amendments to the protocol must be submitted to the FDA for review, and to the IRBs for approval. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: ● Phase I.
Once an IND is in effect, each new clinical protocol and any amendments to the protocol must be submitted to the FDA for review, and to the IRBs for approval. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: ● Phase I.
The data package in the BLA resubmission, given the change in the regulatory landscape in the United States, includes the final two-year analyses of 8 Table of Contents our BALANCE study, which were completed in July 2022, and long-term data from our open-label extension study of PRX-102 in adult patients treated with a 2 mg/kg every four weeks dosage of PRX-102.
The data package in the BLA resubmission, given the change in the regulatory landscape in the United States, included the final two-year analyses of our BALANCE study, which were completed in July 2022, and long-term data from our open-label extension study of PRX-102 in adult patients treated with a 2 mg/kg every four weeks dosage of PRX-102.
Sixteen adult, naïve Fabry patients (9 male and 7 female) completed the trial, each in one of three dosing groups, 0.2 mg/kg, 1 mg/kg and 2 mg/kg. Each patient received IV infusions of PRX-102 every two weeks for 12 weeks, with efficacy follow-up after six-month and twelve-month periods.
Sixteen adult, naïve Fabry patients (9 male and 7 female) completed the phase I/II study, each in one of three dosing groups, 0.2 mg/kg, 1 mg/kg and 2 mg/kg. Each patient received IV infusions of PRX-102 every two weeks for 12 weeks, with efficacy follow-up after six-month and twelve-month periods.
We maintain an approximately 3,400 sq/ft pilot plant for protein development and to manufacture supplies for clinical trials (phase I and phase II). Elelyso, pegunigalsidase alfa and our other drug product candidates must be manufactured in a sterile environment and in compliance with cGMPs set by the FDA and other relevant foreign regulatory authorities.
We maintain an approximately 3,400 sq/ft pilot plant for protein development and to manufacture supplies for clinical trials (phase I and phase II). Elelyso, Elfabrio and our drug product candidates must be manufactured in a clean environment and in compliance with cGMPs set by the FDA and other relevant foreign regulatory authorities.
On January 1, 2016, the Israeli government established the National Authority for Technological Innovation, or NATI, which replaced many of the functions of the OCS. For purposes of clarity, references to NATI will include the OCS. NATI grants are made available to finance of a portion of Protalix Ltd.’s research and development expenditures in Israel.
On January 1, 2016, the Israeli government established the National Authority for Technological Innovation, or NATI, which replaced many of the functions of the OCS. For purposes of clarity, references to NATI will include the OCS. NATI grants may be made available, from time to time, to finance a portion of Protalix Ltd.’s research and development expenditures in Israel.
Data generated from the completed BRIDGE study, the phase I/II clinical trial in naive or untreated patients, and from the extension studies with 1 mg/kg every two weeks were also included in the submission.
Data generated from the completed BRIDGE study, the phase I/II clinical trial in naive or untreated patients, and from the extension studies with 1 mg/kg every two weeks were also included in the 9 Table of Contents submission.
Elelyso is marketed globally, excluding Brazil, through an exclusive licensing agreement with Pfizer. We maintain the distribution rights to Elelyso in Brazil, where it is currently marketed as BioManguinhos alfataliglicerase, through the Supply and Technology Transfer Agreement, or the Brazil Agreement, we entered into on June 18, 2013, with Fiocruz, an arm of the Brazilian MoH.
We maintain the distribution rights to Elelyso in Brazil, where it is currently marketed as BioManguinhos alfataliglicerase, through the Supply and Technology Transfer Agreement, or the Brazil Agreement, we entered into on June 18, 2013, with Fiocruz, an arm of the Brazilian MoH.
Phase I/II Study Our phase I/II clinical trial of PRX-102, which we completed in 2015, was a worldwide, multi-center, open-label, dose ranging study designed to evaluate the safety, tolerability, pharmacokinetics, immunogenicity and efficacy parameters of PRX-102 in adult patients with Fabry disease.
Phase I/II Study The phase I/II clinical trial of PRX-102 (NCT01678898) was a worldwide, multi-center, open-label, dose ranging study designed to evaluate the safety, tolerability, pharmacokinetics, immunogenicity and efficacy parameters of PRX-102 in adult patients with Fabry disease. It was completed in 2015.
The trial was completed in December 2019. Patients were screened and evaluated over three months while continuing agalsidase alfa treatment. Final results of the data generated in the BRIDGE study showed substantial improvement in renal function as measured by mean annualized eGFR slope in both male and female patients. Twenty of 22 patients completed the 12-month treatment duration.
In the study, patients were screened and evaluated over three months while continuing agalsidase alfa treatment. The study was completed in December 2019. Final results of the data generated in the BRIDGE study showed substantial improvement in renal function as measured by mean annualized eGFR slope in both male and female patients.
In June 2012, CHMP issued a positive opinion regarding the benefit of Elelyso but did not immediately grant marketing authorization because of the ten-year market exclusivity granted to Vpriv ® (Takeda Shire) in August 2010 for the same condition, which was extended for an additional two years, and expired in August 2022.
In June 2012, the EMA’s Committee for Medicinal Products for Human Use, or the CHMP, issued a positive opinion regarding the benefit of Elelyso but did not immediately grant marketing authorization because of the ten-year market exclusivity granted to Vpriv ® (Takeda Shire) in August 2010 for the same condition, which was extended for an additional two years, and expired in August 2022.
Research and development expenses which were not approved shall be deductible over a period of three years. Employees As of December 31, 2022, we had 197 employees of whom 193 are full time employees and 17 have a Ph.D. or an M.D. in their respective scientific fields. We believe that our relations with our employees are good.
Research and development expenses which were not approved shall be deductible over a period of three years. Employees As of December 31, 2023, we had 208 employees of whom 208 are full time employees and 16 have a Ph.D. or an M.D. in their respective scientific fields. We believe that our relations with our employees are good.
The initial BLA included a comprehensive set of preclinical, clinical and manufacturing data compiled from our completed phase I/II clinical trial of PRX-102, including the related extension study, interim clinical data from our BRIDGE study and safety data from our on-going clinical studies of PRX-102 in adult patients receiving 1 mg/kg every two weeks.
The initial BLA included a comprehensive set of preclinical, clinical and manufacturing data compiled from our completed phase I/II clinical trial of PRX-102, including the related extension study, interim clinical data from our phase III BRIDGE clinical trial of PRX-102 for the treatment of Fabry disease, or the BRIDGE study, and safety data from our then on-going clinical studies of PRX-102 in adult patients receiving 1 mg/kg every two weeks.
Fabry patients lack or have low levels of α-galactosidase-A resulting in the progressive accumulation of abnormal deposits of a fatty substance called Gb 3 in blood vessel walls throughout their body. The abnormal storage of Gb 3 increases with time.
Fabry patients lack or have low levels of α-galactosidase-A resulting in the progressive accumulation of abnormal deposits of a fatty substance called globotriaosylceramide, or Gb 3 , in blood vessel walls throughout their body.
Phase III BRIGHT Study The BRIGHT study was a multicenter, multinational open-label, switch-over study designed to evaluate the safety, efficacy and pharmacokinetics of treatment with 2 mg/kg of PRX-102 administered every four weeks for 52 weeks (a total of 14 infusions).
Phase III BRIGHT Study The BRIGHT study (PB-102-F50, NCT03180840) was a multicenter, multinational open-label, switch-over study designed to evaluate the safety, efficacy and pharmacokinetics of treatment with 2 mg/kg of PRX-102 administered every four weeks for 52 weeks (a total of 14 infusions). The study was completed in June 2020.
Phase III BRIDGE Study The BRIDGE study was a 12-month open-label, single arm switch-over study evaluating the safety and efficacy of pegunigalsidase alfa, 1 mg/kg infused every two weeks, in up to 22 Fabry patients previously treated with agalsidase alfa for at least two years and on a stable dose for at least six months.
Phase III BRIDGE Study The BRIDGE study (PB-102-F30, NCT03018730) was a 12-month open-label, single arm switch-over study evaluating the safety and efficacy of PRX-102, 1 mg/kg infused every two weeks, in up to 22 Fabry patients previously treated with 11 Table of Contents agalsidase alfa for at least two years and on a stable dose for at least six months.
For example, we are aware of a product candidate that is the subject of a phase III clinical trial for chronic refractory gout and another product candidate that is the subject of a phase II clinical trial for hyperuricemia in gout patients with advanced CKD.
For example, we are aware of a product candidate for chronic refractory gout that recently completed a phase III clinical trial and has met the primary endpoints of the trial, and of another product candidate that is the subject of a phase II clinical trial for hyperuricemia in gout patients with advanced CKD.
The ultimate consequences of Gb 3 deposition range from episodes of pain and impaired peripheral sensation to end-organ failure, particularly of the kidneys, but also of the heart and the cerebrovascular system. Fabry disease occurs in one person per 40,000 to 60,000 males.
The ultimate consequences of Gb 3 deposition 8 Table of Contents range from episodes of pain and impaired peripheral sensation to end-organ failure, particularly of the kidneys, but also of the heart and the cerebrovascular system. Fabry disease occurs in one person per 40,000 to 60,000 males. The standard of care for Fabry disease is ERT.
Topline results from the completed study were announced in April 2022 and the Clinical Study Report for the BALANCE study was completed in July 2022. The final analysis confirmed the positive topline results and favorable tolerability profile.
The Clinical Study Report for the BALANCE study was completed in July 2022. The final analysis confirmed the positive top-line results (announced in April 2022) and favorable tolerability profile.
At the end of the study, only three out of 47 (6.4%) patients in the PRX-102 arm used infusion premedication compared to three out of 24 (12.5%) in the agalsidase beta arm.
At baseline, 21 (40.4%) patients in the PRX-102 arm used infusion premedication compared to 16 (64.0%) in the agalsidase beta arm. At the end of the study, only three out of 47 (6.4%) patients in the PRX-102 arm used infusion premedication compared to three out of 24 (12.5%) in the agalsidase beta arm.
Severe gout is generally described as a state of gout in which there is a presence of monosodium urate crystals with any of the following: frequent recurrent gout flares, chronic gouty arthritis, subcutaneous tophi or disease elements of gout seen via imaging.
Severe gout is generally described as a state of gout in which there is a presence of monosodium urate crystals with any of the following: frequent recurrent gout flares, chronic gouty arthritis, subcutaneous tophi or disease elements of gout seen via imaging. Currently available urate-lowering therapies, can be effective in treating gout.
A total of 78 patients who were previously treated with agalsidase beta for at least one year with an estimated glomerular filtration rate (eGFR) slope at screening worse than -2 mL/min/1.73m 2 /year were enrolled in the study. Patients were randomized on a 2:1 ratio for switching to PRX-102 or continuing on agalsidase beta.
A total of 78 patients who were previously treated with agalsidase beta for at least one year with an eGFR slope at screening worse than -2 mL/min/1.73 m 2 /year were enrolled in the study. 10 Table of Contents Patients were randomized on a 2:1 ratio for switching to PRX-102 or continuing on agalsidase beta.
(2) Patent granted in the United States expires in 2032. We are aware of U.S. patents, and corresponding international counterparts of such patents, owned by third parties that contain claims covering methods of producing glucocerebrosidase.
(2) Patent granted in the United States expires in 2032. (3) PTE/SPC applications were submitted for some of the patents. We are aware of U.S. patents, and corresponding international counterparts of such patents, owned by third parties that contain claims covering methods of producing glucocerebrosidase.
Of the treatment-related TEAEs, 27 were infusion-related reactions (IRRs) and the remainder were single events of diarrhea, erythema, fatigue, influenza-like illness, increases urine protein/creatinine ratio, and urine positive for white blood cells. The 27 IRRs were reported in five (16.7%) patients, all male.
There were no serious or severe treatment-related TEAEs and no TEAEs led to death or study withdrawal. Of the treatment-related TEAEs, 27 were infusion-related reactions (IRRs) and the remainder were single events of diarrhea, erythema, fatigue, influenza-like illness, increases urine protein/creatinine ratio, and urine positive for white blood cells. The 27 IRRs were reported in five (16.7%) patients, all male.
Of the patients that completed the trial from both the PRX-102 and agalsidase beta treatment arms, 69 have opted, with the advice of the treating physician, to receive PRX-102 1 mg/kg every two weeks in the long-term open-label extension study (PB-102-F60, NCT03566017).
Of the patients that completed the trial from both the PRX-102 and agalsidase beta treatment arms, 69 opted, with the advice of the treating physician, to receive PRX-102 1 mg/kg every two weeks in the long-term open-label extension study which is now sponsored by Chiesi.
The trial, which was completed in June 2020, enrolled 30 adult patients (24 males and 6 females) with mean (SD) age of 40.5 (11.3) years, ranging from 19 to 58 years previously treated with a commercially available 14 Table of Contents ERT (agalsidase beta or agalsidase alfa), for at least three years and on a stable dose administered every two weeks.
Enrollment in the study included 30 adult patients (24 males and 6 females) with mean (SD) age of 40.5 (11.3) years, ranging from 19 to 58 years previously treated with a commercially available ERT (agalsidase beta or agalsidase alfa), for at least three years and on a stable dose administered every two weeks.
BLA or NDA review usually does not begin until the drug company has submitted the entire application to the FDA. We used the Rolling Review option for our taliglucerase alfa NDA, which we completed in April 2010. In January 2018, the FDA granted Fast Track designation to PRX-102. 25 Table of Contents Accelerated Approval Section 901 of the U.S.
BLA or NDA review usually does not begin until the drug company has submitted the entire application to the FDA. We used the Rolling Review option for our taliglucerase alfa NDA, which we completed in April 2010. Accelerated Approval Section 901 of the U.S.
Of the patients that completed the trial, 18 have opted, with the advice of the treating physician, to continue receiving PRX-102 1 mg/kg every two weeks in a long-term open-label extension study (PB-102-F60, NCT03566017).
Of the patients that completed the trial, 18 opted, with the advice of the treating physician, to continue receiving PRX-102 1 mg/kg every two weeks in a long-term open-label extension study which is now sponsored by Chiesi.
Treatment-related adverse events were reported for 21 (40.4%) patients in the PRX-102 arm compared to 11 (44.0%) in the agalsidase beta arm. The number of treatment-related events adjusted to 100 years of exposure is 42.85 events for the PRX-102 arm and 152.91 events for the agalsidase beta arm.
The number of events adjusted to 100 years of exposure is 572.36 events for the PRX-102 arm and 816.85 events for the agalsidase beta arm. TEAEs were reported for 21 (40.4%) patients in the PRX-102 arm compared to 11 (44.0%) in the agalsidase beta arm.
In the currently approved ERTs, the missing α-galactosidase-A is replaced with a recombinant form of the protein via intravenous, or IV, infusion once every two weeks. Fabry disease, if left untreated, will progress from a less severe condition to a more serious one.
Currently, the ERTs for Fabry disease are agalsidase alfa, agalsidase beta, and now Elfabrio. Through an ERT, the missing α-galactosidase-A is replaced with a recombinant form of the protein via intravenous, or IV, infusion once every two weeks. Fabry disease, if left untreated, will progress from a less severe condition to a more serious one.
Manufacturing We use our current manufacturing facility in Carmiel, Israel, which has approximately 14,700 sq/ft of clean rooms built according to industry standards, to manufacture drug substance for Elelyso, pegunigalsidase alfa and other recombinant proteins for commercial use and phase III clinical trials.
Manufacturing We use our current manufacturing facility in Carmiel, Israel, which has approximately 14,700 sq/ft of clean rooms built according to industry standards, to manufacture drug substance for Elfabrio and Elelyso for commercial purposes and, with respect to Elfabrio, in connection with clinical trials.
Development and regulatory approval of our pharmaceutical products are dependent upon our ability to procure active ingredients and certain packaging materials from sources approved by the FDA and other regulatory authorities. The FDA and other regulatory approval processes require manufacturers to specify their proposed suppliers of active ingredients and certain packaging materials in their applications.
Development and regulatory approval of our pharmaceutical products are dependent upon our ability to procure active ingredients (DS) and certain packaging materials from sources approved by the FDA and other regulatory authorities.
These agreements affect matters such as cost of living adjustments to salaries, length of working hours and week, recuperation, travel expenses, and pension rights. Otherwise, our employees are not represented by a labor union or represented under a collective bargaining agreement. See “Risk Factors—We depend upon key employees and consultants in a competitive market for skilled personnel.
These agreements affect matters such as cost of living adjustments to salaries, length of working hours and week, recuperation, travel expenses, and pension rights. Otherwise, our employees are not represented by a labor union or represented under a collective bargaining agreement.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe successful commercialization of pegunigalsidase alfa will depend on several factors, including the following: ● Chiesi’s efforts under the Chiesi Agreements; ● obtaining marketing approvals from the FDA, EMA and other foreign regulatory authorities; ● maintaining the cGMP compliance of our manufacturing facility or establishing manufacturing arrangements with third parties; ● the successful inspection of our facilities by the FDA and other foreign regulatory authorities; ● Chiesi’s development of successful sales and marketing organizations for pegunigalsidase alfa; 40 Table of Contents ● the availability of coverage or reimbursement to patients from healthcare payors for pegunigalsidase alfa, if approved; ● a continued acceptable safety and efficacy profile of pegunigalsidase alfa following approval; and ● other risks described in these Risk Factors.
Biggest changeThe successful worldwide commercialization of Elfabrio and Elelyso depends on several factors, including the following: ● Chiesi’s efforts under the Chiesi Agreements and the effectiveness of Chiesi’s commercial strategy and its execution of that strategy, including its pricing strategy and the effectiveness of its efforts to obtain adequate third-party reimbursements and, to a lesser extent, Pfizer’s and Fiocruz’s efforts; ● expanding the scope of the countries in which our products are approved for marketing; ● maintaining the cGMP compliance of our manufacturing facility or establishing manufacturing arrangements with third parties; ● Chiesi’s development and maintenance of successful sales and marketing organizations for Elfabrio; ● the availability of coverage or reimbursement to patients from relevant healthcare payors for Elfabrio and Elelyso; ● the willingness of patients with Fabry disease and Gaucher disease to switch from other treatments to Elfabrio or Elelyso, as the case may be; ● competition from other approved treatments of Fabry disease and Gaucher disease; ● the continued acceptable safety and efficacy profile of Elfabrio and Elelyso; and ● other risks described in these Risk Factors.
If there is a default of such notes, the note holders could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of our available cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation, or, with respect to our indebtedness that is secured, result in the foreclosure on the assets that secure the debt, which would force us to relinquish rights to assets that we may believe are critical to our business.
If there is a default on such notes, the note holders could, among other things, elect to declare all amounts owed immediately due and payable, which could cause all or a large portion of our available cash flow to be used to pay such amounts and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation, or, with respect to our indebtedness that is secured, result in the foreclosure on the assets that secure the debt, which would force us to relinquish rights to assets that we may believe are critical to our business.
We expect to continue to incur significant operating expenditures, and we anticipate that our expenses will increase in the foreseeable future as we: ● continue to undertake preclinical development and clinical trials for our current and new drug candidates; ● seek regulatory approvals for our drug candidates; and ● seek to in-license additional technologies.
We expect to continue to incur significant operating expenditures, and we anticipate that our expenses will increase in the foreseeable future as we seek to in-license additional technologies, continue to undertake preclinical development and clinical trials for our current and new drug candidates and seek regulatory approvals for our drug candidates.
If we or any of our future collaborators are found to be in violation of any of the laws described above and other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from government healthcare reimbursement programs and the curtailment or restructuring or our operations, any of which could have a material adverse effect on our business, results of operations and financial condition.
If we or any of our collaborators are found to be in violation of any of the laws described above and other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from government healthcare reimbursement programs and the curtailment or restructuring or our operations, any of which could have a material adverse effect on our business, results of operations and financial condition.
All marketing activities associated with drug products that are approved for sale in the United States, if any, will be, directly or indirectly through our customers, subject to numerous federal and state laws governing the marketing and promotion of pharmaceutical products in the United States, including, without limitation, the federal Anti-Kickback Law, the federal False Claims Act and HIPAA.
All marketing activities associated with products that are approved for sale in the United States, if any, will be, directly or indirectly through our customers, subject to numerous federal and state laws governing the marketing and promotion of pharmaceutical products in the United States, including, without limitation, the federal Anti-Kickback Law, the federal False Claims Act and HIPAA.
These organizations also compete with us to attract qualified personnel, acquisitions and joint ventures candidates and for other collaborations. Activities of our competitors may impose unanticipated costs on our business or adversely affect the market for our drug products which would have a material adverse effect on our business, results of operations and financial condition.
These organizations also compete with us to attract qualified personnel, acquisitions and joint ventures candidates and for other collaborations. Activities of our competitors may impose unanticipated costs on our business or adversely affect the market for our products which would have a material adverse effect on our business, results of operations and financial condition.
We presently carry clinical trial liability insurance with coverages of up to $10.0 million per occurrence and $10.0 million in the aggregate, an amount we consider reasonable and customary. However, this insurance coverage includes various deductibles, limitations and exclusions from coverage, and in any event might not fully cover any potential claims.
We presently carry product liability and clinical trial liability insurance with coverages of up to $10.0 million per occurrence and $10.0 million in the aggregate, an amount we consider reasonable and customary. However, this insurance coverage includes various deductibles, limitations and exclusions from coverage, and in any event might not fully cover any potential claims.
In addition, contract manufacturers are subject to the rules and regulations of the FDA and comparable foreign regulatory authorities and face the risk that any of those authorities may find that they are not in compliance with applicable regulations.
In addition, we and contract manufacturers are subject to the rules and regulations of the FDA and comparable foreign regulatory authorities and face the risk that any of those authorities may find that they are not in compliance with applicable regulations.
Failure or delay in the commencement or completion of our clinical trials may be caused by several factors, including: ● slower than expected rates of patient recruitment, particularly with respect to trials of rare diseases; ● determination of dosing issues; ● unforeseen safety issues; ● lack of effectiveness during clinical trials; ● disagreement by applicable regulatory bodies over our trial protocols, the interpretation of data from preclinical studies or clinical trials or conduct and control of clinical trials; ● determination that the patient population participating in a clinical trial may not be sufficiently broad or representative to assess efficacy and safety for our target population; ● inability to monitor patients adequately during or after treatment; ● inability or unwillingness of medical investigators and institutional review boards to follow our clinical protocols; and 37 Table of Contents ● lack of sufficient funding to finance the clinical trials.
Failure or delay in the commencement or completion of our clinical trials may be caused by several factors, including: ● slower than expected rates of patient recruitment, particularly with respect to trials of rare diseases; ● determination of dosing issues; ● unforeseen safety issues; ● lack of effectiveness during clinical trials; ● disagreement by applicable regulatory bodies over our trial protocols, the interpretation of data from preclinical studies or clinical trials or conduct and control of clinical trials; ● determination that the patient population participating in a clinical trial may not be sufficiently broad or representative to assess efficacy and safety for our target population; ● inability to monitor patients adequately during or after treatment; ● inability or unwillingness of medical investigators and institutional review boards to follow our clinical protocols; and ● lack of sufficient funding to finance the clinical trials.
If we engage any contract manufacturers, such manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical or commercial needs.
If we engage any contract manufacturers, such manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our preclinical, clinical or commercial needs.
Any modification required to a current patent application may delay the approval of such patent application which would have a material adverse effect on our business, results of operations and financial condition.
Any modification required to a current patent application may delay the approval of such patent application which may have a material adverse effect on our business, results of operations and financial condition.
If we or any of our current or future partners breach or terminate the agreements that make up such arrangements, our partners otherwise fail to conduct their obligations under such arrangements in a timely manner, there is a dispute about their obligations or if either party terminates the applicable agreement or elects not to continue the arrangement, we may not enjoy the benefits of the agreements or receive a sufficient amount of royalty or milestone payments from them, if any, which may have a material adverse effect on our business, results of operations and financial condition.
If we or any of our current or future partners breach or terminate the agreements that make up such arrangements, our partners otherwise fail to conduct their obligations under such arrangements in a timely 39 Table of Contents manner, there is a dispute about their obligations or if either party terminates the applicable agreement or elects not to continue the arrangement, we may not enjoy the benefits of the agreements or receive a sufficient amount of royalty or milestone payments from them, if any, which may have a material adverse effect on our business, results of operations and financial condition.
In addition, our operating results may suffer because of acquisition-related costs or amortization expenses or charges relating to acquired intangible assets. Any failure to successfully integrate other companies, products or technologies that we may acquire may have a material adverse effect on our business and results of operations.
In addition, our operating results may suffer because of acquisition-related costs or amortization expenses or charges relating to acquired intangible assets. Any failure to successfully integrate other companies, products or technologies that we may acquire may have a material adverse effect on our business, results of operations and financial condition.
The manufacture of our products is an exacting and complex process, and any manufacturing problems encountered by us or certain of our suppliers may have a material adverse effect on our business, results of operations and financial condition. The FDA and foreign regulators require manufacturers to register manufacturing facilities.
The manufacture of our products is an exacting and complex process, and any manufacturing problems encountered by us or certain of our providers may have a material adverse effect on our business, results of operations and financial condition. The FDA and foreign regulators require manufacturers to register manufacturing facilities.
If we were to default on certain of our obligations, or in certain other circumstances generally related to 52 Table of Contents a bankruptcy or insolvency, holders of our outstanding 2024 Notes could seek to foreclose on the collateral under the security agreements to obtain satisfaction of our obligations, and our business could be materially and adversely impacted, which would in turn have a material adverse effect on our results of operations and financial condition.
If we were to default on certain of our obligations, or in certain other circumstances generally related to a bankruptcy or insolvency, holders of our outstanding 2024 Notes could seek to foreclose on the collateral under the security agreements to obtain satisfaction of our obligations, and our business could be materially and adversely impacted, which would in turn have a material adverse effect on our results of operations and financial condition.
Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters 56 Table of Contents described above. Israeli courts might not enforce judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against us or our non-U.S. resident officers and directors.
Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Israeli courts might not enforce judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against us or our non-U.S. resident officers and directors.
While our assessment of our internal control over financial reporting resulted in our conclusion that as of December 31, 2022, our internal control over financial reporting was effective, we cannot predict the outcome of our testing or any subsequent testing by our auditor in future periods.
While our assessment of our internal control over financial reporting resulted in our conclusion that as of December 31, 2023, our internal control over financial reporting was effective, we cannot predict the outcome of our testing or any subsequent testing by our auditor in future periods.
Any costs incurred in connection with such events or the inability to sell our products may have a material adverse effect on our business, results of operations and financial condition. If we cannot meet requirements under our license agreements, we could lose the rights to our products, which could have a material adverse effect on our business.
Any costs incurred in connection with such events or the inability to sell our products may have a material adverse effect on our business, results of operations and financial condition. 54 Table of Contents If we cannot meet requirements under our license agreements, we could lose the rights to our products, which could have a material adverse effect on our business.
However, these agreements can be difficult and costly to enforce. Moreover, to 53 Table of Contents the extent that our contractors, consultants, advisors and research collaborators apply or independently develop intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to the intellectual property.
However, these agreements can be difficult and costly to enforce. Moreover, to the extent that our contractors, consultants, advisors and research collaborators apply or independently develop intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to the intellectual property.
Our collaborators may also have relationships with other commercial entities, some of whom may compete with us. If our collaborators also assist our competitors, our competitive position could be harmed. We have only limited experience in regulatory affairs, and some of our drug candidates may be based on new technologies.
Our collaborators may also have relationships with other commercial entities, some of whom may compete with us. If our collaborators also assist our competitors, our competitive position could be harmed. 49 Table of Contents We have only limited experience in regulatory affairs, and some of our drug candidates may be based on new technologies.
If we are unable to secure additional financing in the future on acceptable terms, or at all, we may be unable to commence or complete planned preclinical and clinical trials or obtain approval of our drug candidates from the FDA and other regulatory authorities.
If we are unable to secure additional financing in the future on acceptable terms, or at all, we may be unable to expand our portfolio of product candidates, commence or complete planned preclinical and clinical trials or obtain approval of our drug candidates from the FDA and other regulatory authorities.
We may publicly disclose interim, topline or preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data. The results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial.
We may publicly disclose interim, top-line or preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data. The results and related findings and conclusions are subject to change following a full analysis of all data related to the particular trial.
See “Business – Competition.” Most of our competitors, either alone or together with their collaborative partners, operate larger research and development programs, staff and facilities and have substantially greater financial resources than we do, as well as significantly greater experience in: 42 Table of Contents ● developing drugs; ● undertaking preclinical testing and human clinical trials; ● obtaining marketing approvals from the FDA and other regulatory authorities; ● formulating and manufacturing drugs; and ● launching, marketing and selling drugs.
See “ Business – Competition .” Most of our competitors, either alone or together with their collaborative partners, operate larger research and development programs, staff and facilities and have substantially greater financial resources than we do, as well as significantly greater experience in: ● developing drugs; ● undertaking preclinical testing and human clinical trials; ● obtaining marketing approvals from the FDA and other regulatory authorities; ● formulating and manufacturing drugs; and ● launching, marketing and selling drugs.
Topline data also remain subject to audit and verification procedures that may result in the final data being materially different than the preliminary data we previously published. As a result, any topline data should be viewed with caution until final data are available.
Top-line data also remain subject to audit and verification procedures that may result in the final data being materially different than the preliminary data we previously published. As a result, any top-line data should be viewed with caution until final data are available.
As a result, any interim, topline or preliminary results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
As a result, any interim, top-line or preliminary results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.
For example, it could: ● make it more difficult for us to satisfy our financial obligations, including with respect to the 2024 Notes; ● result in an event of default under our outstanding convertible notes if we fail to comply with the financial and other restrictive covenants contained in agreements governing any future indebtedness, which event of default could result in all of our debt becoming immediately due and payable; ● increase our vulnerability to general adverse economic, industry and competitive conditions; ● reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes because we will be required to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness; ● limit our flexibility in planning for, or reacting to, and increasing our vulnerability to changes in our business, the industry in which we operate and the general economy; ● prevent us from raising funds necessary to purchase 2024 Notes surrendered to us by holders upon a fundamental change (as described in the 2024 Indenture governing the notes), which failure would result in an event of default with respect to the 2024 Notes; ● place us at a competitive disadvantage compared to our competitors that have less indebtedness or are less highly leveraged and that, therefore, may be able to take advantage of opportunities that our debt levels or leverage prevent us from exploiting; and ● limit our ability to obtain additional financing. 47 Table of Contents Each of these factors may have a material and adverse effect on our business, results of operations and financial condition and our ability to meet our payment obligations under the 2024 Notes and our other indebtedness.
For example, it could: 50 Table of Contents ● make it more difficult for us to satisfy our financial obligations, including with respect to the 2024 Notes; ● result in an event of default under the 2024 Indenture if we fail to comply with the financial and other restrictive covenants contained in agreements governing any future indebtedness, which event of default could result in all of our debt becoming immediately due and payable; ● increase our vulnerability to general adverse economic, industry and competitive conditions; ● reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes because we will be required to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness; ● limit our flexibility in planning for, or reacting to, and increasing our vulnerability to changes in our business, the industry in which we operate and the general economy; ● prevent us from raising funds necessary to purchase 2024 Notes surrendered to us by holders upon a fundamental change (as described in the 2024 Indenture), which failure would result in an event of default with respect to the 2024 Notes; ● place us at a competitive disadvantage compared to our competitors that have less indebtedness or are less highly leveraged and that, therefore, may be able to take advantage of opportunities that our debt levels or leverage prevent us from exploiting; and ● limit our ability to obtain additional financing.
While we attempt to provide competitive compensation packages to 43 Table of Contents attract and retain key personnel, many of our competitors are likely to have greater resources and more experience than we have, making it difficult for us to compete successfully for key personnel.
While we attempt to provide competitive compensation packages to attract and retain key personnel, many of our competitors are likely to have greater resources and more experience than we have, making it difficult for us to compete successfully for key personnel.
Delays in the approval process for any drug candidate will have a material adverse effect upon our prospects, business, results of operations and financial condition. Clinical trials are very expensive, time-consuming and difficult to design and implement and may result in unforeseen costs, which may have a material adverse effect on our business, results of operations and financial condition.
Delays in the approval process for any drug candidate may have a material adverse effect upon our prospects, business, results of operations and financial condition. 47 Table of Contents Clinical trials are very expensive, time-consuming and difficult to design and implement and may result in unforeseen costs, which may have a material adverse effect on our business, results of operations and financial condition.
In-licensing additional drug candidates may significantly increase our capital requirements, and place a strain on the time of our existing personnel, which may delay or otherwise adversely affect the development of our existing drug candidates or cause us to re-prioritize our drug pipeline if we do not have the necessary capital resources to develop all of our drug candidates, which may have a material adverse impact on our business, results of operations and financial condition.
In-licensing additional drug candidates may significantly increase our capital requirements, and 41 Table of Contents place a strain on the time of our existing personnel, which may delay or otherwise adversely affect the development of our existing drug candidates or cause us to re-prioritize our drug pipeline if we do not have the necessary capital resources to develop all of our drug candidates, which may have a material adverse effect on our business, results of operations and financial condition.
Thus, any patents we own or license from or to third parties may not provide any protection against our competitors and those who infringe upon our patents. Furthermore, the life of our patents is limited.
Thus, any patents we own or license from or to third parties may not provide any protection against our competitors and those who infringe upon our patents. 53 Table of Contents Furthermore, the life of our patents is limited.
Most of our directors and all of our executive officers are residents of Israel, and accordingly, most of their assets and our assets are located outside the United States.
A majority of our directors and all of our executive officers are residents of Israel, and accordingly, most of their assets and our assets are located outside the United States.
Obtaining reimbursement approval for an approved product from governments and other third party payors is a time consuming and costly process that requires our collaborators or us, as the case may be, to provide supporting scientific, clinical and cost-effectiveness data for the use of our products, if and when approved, to every payor.
Obtaining reimbursement approval for an approved product from individual governments and other third party payors is a time consuming (six to 12 months or longer) and costly process that requires our collaborators or us, as the case may be, to provide supporting scientific, clinical and cost-effectiveness data for the use of our products, if and when approved, to every payor.
In addition, patients who enroll in our clinical trials may discontinue their participation at any time during the study as a result of a number of factors, including withdrawing their consent, experiencing adverse clinical events, which may or may not be judged related to our drug candidates under evaluation, or due to planned or actual pregnancies.
In addition, patients who enroll in our clinical trials may discontinue their participation at any time during the study as a result of a number of factors, related to the trials or not, including withdrawing their consent, experiencing adverse clinical events, which may or may not be judged related to our drug candidates, or due to personal reasons, such as planned or actual pregnancies.
Even if we obtain orphan drug designation, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan designated indication, and may be lost if the FDA later determines that the request for designation was materially defective, if we are unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition, or if a subsequent applicant demonstrates clinical superiority over our products, if approved.
Even if we obtain orphan drug designation, exclusive marketing rights in the United States or other applicable jurisdictions may be limited if we seek approval for an indication broader than the orphan designated indication, and may be lost if the FDA, or other applicable regulatory authorities later determine that the request for designation was materially defective, if we are unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition, or if a subsequent applicant demonstrates clinical superiority over our products, if approved.
Any product liability claim, even one that was not in excess of our insurance coverage or one that is meritless and/or unsuccessful, may adversely affect our cash available for other purposes, such as research and development, which may have a material adverse effect on our business, results of operations and financial condition.
Any product liability claim, even one that was not in excess of our insurance coverage or one that is meritless and/or unsuccessful, may adversely affect the availability of funds for other purposes, such as research and development, which may have a material adverse effect on our business, results of operations and financial condition.
Some of the diseases or disorders that our drug candidates are intended to treat are relatively rare and we expect only a subset of the patients with these diseases to be eligible for our clinical trials. Our clinical trials generally mandate that a 38 Table of Contents patient cannot be involved in another clinical trial for the same indication.
Some of the diseases or disorders that our drug candidates under evaluation are intended to treat are relatively rare and we expect only a subset of the patients with these diseases to be eligible for our clinical trials. Our clinical trials generally mandate that a patient cannot be involved in another clinical trial for the same indication.
In recent years the Israeli government has reduced the benefits available and has indicated that it may further reduce or eliminate some of these 55 Table of Contents benefits in the future.
In recent years the Israeli government has reduced the benefits available and has indicated that it may further reduce or eliminate some of these benefits in the future.
If the market opportunities for our current product candidates are smaller than we believe they are, our revenues may be adversely affected and our business may suffer.
If the market opportunities for our products or product candidates are smaller than we believe they are, our revenues may be adversely affected and our business may suffer.
Even if we do receive approval to manufacture products developed with government grants outside of Israel, we may be required to pay an increased total amount of royalties (possibly up to 300% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside of Israel, as well as at a possibly increased royalty rate.
Even if we do receive approval to manufacture products developed 56 Table of Contents with government grants outside of Israel, we may be required to pay an increased total amount of royalties (possibly up to 600% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside of Israel, as well as a possibly increased royalty rate.
We are highly dependent upon the principal members of our management team, especially our President and Chief Executive Officer, Dror Bashan, as well as the Chairman of our Board of Directors, Zeev Bronfeld, our other directors, consultants and collaborating scientists.
We are highly dependent upon the principal members of our management team, especially our President and Chief Executive Officer, Dror Bashan, as well as the Chairman of our Board of Directors, Eliot Forster, our other directors, consultants and collaborating scientists.
The perception in the public market that our existing stockholders might sell shares of common stock could also depress the trading price of our common stock. 57 Table of Contents A substantial majority of our outstanding shares of our common stock are freely tradable without restriction or further registration under the federal securities laws.
The perception in the public market that our existing stockholders might sell shares of common stock may also depress the trading price of our common stock. A substantial majority of our outstanding shares of our common stock are freely tradable without restriction or further registration under the federal securities laws.
A non-stock takeover of our company may trigger the requirement that we purchase the notes. This feature may have the effect of delaying or preventing a takeover of our company that would otherwise be beneficial to our stockholders. We may fail to meet the continued market capitalization-based listing requirement or other continued listing requirements of the NYSE American.
This feature may have the effect of delaying or preventing a takeover of our company that would otherwise be beneficial to our stockholders. We may fail to meet the continued market capitalization-based listing requirement or other continued listing requirements of the NYSE American.
We rely on third parties for final processing of taliglucerase alfa, pegunigalsidase alfa and our other product candidates, which exposes us to a number of risks that may delay development, regulatory approval and commercialization of taliglucerase alfa and our other product candidates or result in higher product costs.
We rely on third parties for final processing of Elfabrio, Elelyso and our other product candidates, which exposes us to a number of risks that may delay development, regulatory approval and commercialization of Elfabrio, Elelyso or our other product candidates or result in higher product costs.
Because our clinical trials depend upon third-party researchers, the results of our clinical trials and such research activities are subject to delays and other risks which are, to a certain extent, beyond our control, which could impair our clinical development programs and our competitive position.
Our clinical trials depend upon third-party service providers and, accordingly, the results of our clinical trials and such research activities are subject to delays and other risks which are, to a certain extent, beyond our control, which could impair our clinical development programs and our competitive position.
Our strategy, in certain cases, is to enter into collaboration agreements with third parties to leverage our ProCellEx system to develop product candidates. Failure to enter into such agreements, or non-compliance by us or our collaborators with such agreements, may have a material adverse effect on our business, results of operations and financial condition.
Failure to enter into such agreements, or non-compliance by us or our collaborators with such agreements, may have a material adverse effect on our business, results of operations and financial condition. Our strategy, in certain cases, is to enter into arrangements with pharmaceutical companies to leverage our ProCellEx system to develop additional product candidates.
We currently have no significant product revenues and need to raise additional capital to operate our business, which may not be available on favorable terms, or at all, and which will have a dilutive effect on our stockholders.
We may need to raise additional capital to operate our business, which may not be available on favorable terms, or at all, and which will have a dilutive effect on our stockholders.
As of December 31, 2022, we held, or had license rights to, more than 80 patents. If patent rights covering our products or technologies are not sufficiently broad, they may not provide us with sufficient proprietary protection or competitive advantages against competitors with similar products and technologies.
As of December 31, 2023, we held, or had license rights to, approximately 90 patents. If patent rights covering our products or technologies are not sufficiently broad, they may not provide us with sufficient proprietary protection or competitive advantages against competitors with similar products and technologies.
However, to the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability despite our insurance policy, and the further development and commercialization of our product candidates could be delayed. 44 Table of Contents We could be subject to securities class action litigation.
However, to the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability despite our insurance policy, and the further development and commercialization of our product candidates could be delayed.
If we fail to adequately protect or enforce our intellectual property rights or secure rights to third party patents, the value of our intellectual property rights would diminish and our business, competitive position and results of operations would suffer. As of December 31, 2022, we had more than 30 pending patent applications.
If we fail to adequately protect or enforce our intellectual property rights or secure rights to third party patents, the value of our intellectual property rights would diminish and our business, competitive position and results of operations would suffer. As of December 31, 2023, we had approximately 50 pending patent applications.
Item 1A. Risk Factors You should carefully consider the risks described below together with the other information included in this Annual Report on Form 10-K. Our business, financial condition or results of operations could be adversely affected by any of these risks. If any of these risks occur, the value of our common stock could decline.
Item 1A. Risk Factors You should carefully consider the risks described below together with the other information included in this Annual Report on Form 10-K. Our business, financial condition and results of operations could be adversely affected by any of these risks.
We may seek orphan drug designation for our product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products.
We may seek orphan drug or other comparable designations for our product candidates in specific indications in which there is a medically plausible basis for the use of these products.
Our NOL carryforwards as of December 31, 2022, are equal to approximately $247.4 million, of which approximately $26.7 million may be restricted under Section 382 of the Internal Revenue Code, or the IRC. IRC Section 382 applies whenever a corporation with NOLs experiences an ownership change.
Our NOL carryforwards as of December 31, 2023, are equal to approximately $234.8 million, of which approximately $24.4 million may be restricted under Section 382 of the Internal Revenue Code, or the IRC. IRC Section 382 applies whenever a corporation with NOLs experiences an ownership change.
Our executive office and operations are located in the State of Israel. Accordingly, political, economic and military conditions in Israel directly affect our business. Any armed conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could affect adversely our operations.
Accordingly, economic, geopolitical and military conditions in Israel and the surrounding region could directly affect our business. Any armed conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could adversely affect our operations.
We have no experience in the final filling and freeze drying steps of the drug manufacturing process. We rely on third parties in the United States and Europe to perform fill and finish activities for taliglucerase alfa and pegunigalsidase alfa, and have engaged other parties for our other product candidates.
We have no experience in the final filling and freeze drying steps of the drug manufacturing process. We rely on third-party service providers in the United States and Europe to perform fill and finish activities for Elelyso and Elfabrio, and have engaged other parties for our other product candidates.
We or certain of our materials suppliers may face manufacturing or quality control problems causing product production and shipment delays or a situation where we or the supplier may not be able to maintain compliance with the FDA’s cGMP requirements, or those of foreign regulators, necessary to continue manufacturing.
We or certain of our services and materials providers, including our fill and finish service providers, may face manufacturing or quality control problems causing product production and shipment delays or a situation where we or the provider may not be able to maintain compliance with the FDA’s cGMP requirements, or those of foreign regulators, necessary to continue manufacturing.
There can be no assurance that we will be able to comply, or continue to comply, with FDA or foreign regulatory manufacturing requirements for our current facility or any facility we may establish in the future, and the failure to so comply, or continue to comply, will have a material adverse effect on our business, results of operations and financial condition.
There can be no assurance that we or our contract manufacturers will be able to comply, or continue to comply, with FDA or foreign regulatory manufacturing requirements, and the failure to so comply, or continue to comply, may have a material adverse effect on our business, results of operations and financial condition.
Market acceptance and sales of any one or more of our product candidates, if approved, will depend on coverage and reimbursement policies in the countries in which they are approved for sale. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will pay for and establish reimbursement levels.
Market acceptance and sales of Elfabrio, Elelyso or any other future products, if any, will depend on coverage and reimbursement policies in the countries in which they are approved for sale. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will pay for and establish reimbursement levels.
We have filed U.S. and international patent applications for process patents, as well as composition of matter patents, for taliglucerase alfa, pegunigalsidase alfa and our product candidates.
We have filed U.S. and international patent applications for process patents, as well as composition of matter patents, for Elfabrio, Elelyso and our product candidates.
In addition, full reimbursement may not be available for high priced products. Moreover, eligibility for coverage does not imply that any approved product will be reimbursed in all cases or at a rate that allows us to make a profit or even cover our costs. Limited reimbursement amounts may reduce the demand for, or the price of, our product candidates.
In addition, full reimbursement may not be available for high priced products. Moreover, eligibility for coverage does not imply that any approved product will be reimbursed in all cases or at a rate 37 Table of Contents that allows us to make a profit or even cover our costs.
At December 31, 2022, there were outstanding options to purchase common stock issued covering approximately 5.5 million shares of our common stock with a weighted average exercise price of $2.28 per share.
At December 31, 2023, there were outstanding options to purchase common stock issued covering approximately 7.0 million shares of our common stock with a weighted average exercise price of $ 2.13 per share.
Future acceptance and use of any of our products or any product candidates, if approved, will depend upon a number of factors including: ● perceptions by physicians, patients, third party payors and others in the medical community about the safety and effectiveness of taliglucerase alfa, pegunigalsidase alfa or our other drug candidates; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the prevalence and severity of any side effects, including any limitations or warnings contained in our products’ approved labeling; 50 Table of Contents ● pharmacological benefits of taliglucerase alfa, pegunigalsidase alfa or our other drug candidates relative to competing products and products under development; ● the efficacy and potential advantages relative to competing products and products under development; ● relative convenience and ease of administration; ● effectiveness of education, marketing and distribution efforts by us and our licensees and distributors, if any; ● publicity concerning taliglucerase alfa, pegunigalsidase alfa or our other drug candidates or competing products and treatments; ● coverage and reimbursement of our products by third party payors; and ● the price for our products and competing products.
Future acceptance and use of any of our products will depend upon a number of factors including: ● perceptions by physicians, patients, third party payors and others in the medical community about the safety and effectiveness of Elfabrio or Elelyso, or any future product, if any; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; 36 Table of Contents ● the prevalence and severity of any side effects, including any limitations or warnings contained in our products’ approved labeling, including the boxed warning associated with Elfabrio in the United States; ● pharmacological benefits of Elfabrio or Elelyso, or any future product, if any relative to competing products and products under development; ● the efficacy and potential advantages relative to competing products and products under development; ● relative convenience and ease of administration; ● effectiveness of education, marketing and distribution efforts by Chiesi, Pfizer and any other relevant licensees and distributors; ● publicity concerning Elfabrio or Elelyso, or any future product, if any, or concerning competing products and treatments; and ● the price for our products and competing products.
If the market opportunities for other product candidates, and for BioManguinhos alfataliglicerase in Brazil, are smaller than we believe they are, our revenues may be adversely affected and our business may suffer. To date, our development efforts have focused mainly on relatively rare disorders with small patient populations, in particular Gaucher disease and Fabry disease.
If the market opportunities for Elfabrio, Elelyso or any other future products are smaller than we believe they are, our revenues may be adversely affected and our business may suffer. To date, our development efforts have focused mainly on relatively rare disorders with relatively small patient populations, in particular Gaucher disease and Fabry disease.
As a result, the pricing of our product candidates, if approved, in different countries may vary widely, thus creating the potential for third-party trade in our products in an attempt to exploit price differences between countries.
The pricing of our products in different countries may vary widely, thus creating the potential for third-party trade in our products in an attempt to exploit price differences between countries.
If our stockholders sell substantial amounts of our common stock, including shares of our common stock issuable upon conversion of our outstanding convertible notes or warrants, or if we sell a substantial amount of our common stock under our ATM program, the market price of our common stock could decrease significantly.
Future sales of our common stock could reduce our stock price. If our stockholders sell substantial amounts of our common stock, including shares of our common stock underlying our outstanding convertible notes and warrants, or if we sell a substantial amount of our common stock under our ATM program, the market price of our common stock could decrease significantly.
Our research programs may initially show promise in identifying potential product candidates, yet fail to immediately yield product candidates for clinical development for many reasons, including the following: ● a product candidate is not capable of being produced in commercial quantities at an acceptable cost, or at all; ● a product candidate may not be accepted by patients, the medical community or third-party payors; ● competitors may develop alternatives that render our product candidates obsolete; ● the research methodology used may not be successful in identifying potential product candidates; or 41 Table of Contents ● a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory approval.
A research program may initially show promise in identifying a potential product candidate, yet fail to immediately yield the product candidate for clinical development for many reasons, including the following: ● a product candidate is not capable of being produced in commercial quantities at an acceptable cost, or at all; ● the research methodology used may not be successful in identifying potential product candidates; or ● a product candidate may, after further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory approval.
If physicians, patients, third party payors and others in the medical community do not accept and use taliglucerase alfa, pegunigalsidase alfa or any of our other product candidates, if approved, our ability to generate revenue from product sales will be materially impaired.
If physicians, patients, third party payors and others in the medical community do not accept and use Elfabrio, Elelyso or any other future products, our ability to generate revenue from product sales will be materially impaired. Physicians and patients, and other healthcare providers, may not accept and use Elfabrio, Elelyso or any other future of our other product candidates.
In the event that hostilities disrupt the ongoing operation of our facilities or the airports and seaports on which we depend to import and export our supplies, materials, drug substance and other products, our operations may be materially adverse affected.
If hostilities disrupt the ongoing operation of our facilities or the airports and seaports on which we depend to import and export our supplies, materials, drug substance and other products, our business, results of operations and financial condition may be materially and adversely affected.
If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we may incur additional expenses to comply with standards set by regulatory authorities or governing bodies which would have a material adverse effect on our business, results of operations and financial condition. 58 Table of Contents The issuance of preferred stock or additional shares of common stock could adversely affect the rights of our stockholders.
If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we may incur additional expenses to comply with standards set by regulatory authorities or governing bodies which may have a material adverse effect on our business, results of operations and financial condition.
Failure to comply with applicable requirements of the FDA or comparable foreign regulatory authorities could result in, among other things, any of the following actions: ● warning letters; ● fines and other monetary penalties; ● unanticipated expenditures; ● delays in the FDA’s or other foreign regulatory authorities’ approving, or the refusal of any regulatory authority to approve, any drug candidate; ● product recall or seizure; ● interruption of manufacturing or clinical trials; ● operating restrictions; ● injunctions; and ● criminal prosecutions.
Failure to comply with applicable requirements of the FDA or comparable foreign regulatory authorities could result in, among other things, any of the following actions: ● warning letters; ● fines and other monetary penalties; ● unanticipated expenditures; ● delays in the FDA’s or other foreign regulatory authorities’ approving, or the refusal of any regulatory authority to approve, any drug candidate; ● product recall or seizure; ● interruption of manufacturing or clinical trials; ● operating restrictions; ● injunctions; and ● criminal prosecutions. 46 Table of Contents In addition to the approval requirements, other numerous and pervasive regulatory requirements apply, both before and after approval, to us, our drug candidates, our suppliers, contract manufacturers, and contract testing laboratories.
We currently depend heavily on the success of pegunigalsidase alfa. Any failure to commercialize pegunigalsidase alfa, or the experience of significant delays in doing so, will have a material adverse effect on our business, results of operations and financial condition.
Any failure to commercialize Elfabrio or Elelyso globally or the experience of significant delays in doing so will have a material adverse effect on our business, results of operations and financial condition.
The clinical testing, marketing and use of our products and product candidates exposes us to product liability claims if the use or misuse of those products or product candidates cause injury or disease, or results in adverse effects. Use of our products or product candidates, whether in clinical trials or post approval, could result in product liability claims.
The use and marketing of our products and product candidates, including in connection with clinical trials, exposes us to product liability or similar claims if the use or misuse of those products or product candidates cause injury or disease, or results in adverse effects.
If securities analysts stop publishing research or reports about us or our business or if they downgrade our common stock, the market price of our common stock could decline. The market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts.
The market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts.
Our internal computer systems, or those used by our third-party contractors or consultants, may fail or suffer security breaches. Despite the implementation of security measures, our internal computer systems and those of our present and future contractors and consultants are vulnerable to damage from computer viruses and unauthorized access.
Despite the implementation of security measures, our internal computer systems and those of our present and future contractors and consultants are vulnerable to damage from computer viruses and unauthorized access.
If Protalix Ltd. is unable to make sufficient distributions or advances to us, or if there are limitations on our ability to receive such distributions or advances, we may not have the cash resources necessary to conduct our corporate operations or service our debt which would have a material adverse effect on our business, results of operations and financial condition. 46 Table of Contents Risks Related to our Financial Condition and Capital Requirements Servicing our debt and settling conversion requests may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
If Protalix Ltd. is unable to make sufficient distributions or advances to us, or if there are limitations on our ability to receive such distributions or advances, we may not have the cash resources necessary to conduct our corporate operations or service our debt which would have a material adverse effect on our business, results of operations and financial condition.
Because a certain portion of our expenses is incurred in New Israeli Shekels, our results of operations may be seriously harmed by currency fluctuations and inflation. We report our financial statements in U.S. dollars, our functional currency.
Any such disruption may have a material adverse effect on our business, results of operations and financial condition. A certain portion of our expenses is incurred in New Israeli Shekels and, accordingly, our results of operations may be seriously harmed by currency fluctuations and inflation. We report our financial statements in U.S. dollars, our functional currency.
Also at December 31, 2022, there were 136,738 shares of common stock available for future for issuance in connection with future grants of incentives under our Amended and Restated Pro BioTherapeutics, Inc. 2006 Stock Incentive Plan, as amended , approximately 21.5 million shares of common stock reserved for issuance upon conversion of our outstanding 2024 Notes and approximately 14.6 million shares of common stock reserved for issuance upon the exercise of our outstanding warrants.
Also at December 31, 2023, there were 633,409 shares of common stock available for future for issuance in connection with future grants of incentives under our Amended and Restated Protalix BioTherapeutics, Inc. 2006 Stock Incentive Plan, as amended , approximately 15.2 million shares of common stock reserved for issuance upon conversion of our outstanding 2024 Notes and approximately 13.4 million shares of common stock reserved for issuance upon the exercise of our outstanding warrants.
We anticipate that the market price of our common stock is likely to continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as: ● the timing of and any delays in anticipated marketing approvals for pegunigalsidase alfa; ● sales of pegunigalsidase alfa, if approved for marketing; ● our sale of shares of our common stock under our ATM program, or market expectations that such sales are to be executed; ● purchases of BioManguinhos alfataliglicerase in Brazil; ● the progress and results of the studies of our other product candidates; ● developments concerning intellectual property rights and regulatory approvals; ● the announcement of new products or product enhancements by us or our competitors; ● variations in our and our competitors’ results of operations; ● changes in earnings estimates or recommendations by securities analysts; ● developments in the biotechnology industry; and ● general market conditions and other factors, including factors unrelated to our operating performance.
The securities of life sciences companies often experience significant volatility in connection with clinical trial and regulatory announcements. 57 Table of Contents We anticipate that the market price of our common stock is likely to continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as: ● sales of Elfabrio by Chiesi; ● our sale of shares of our common stock under our ATM program, or market expectations that such sales are to be executed; ● purchases of BioManguinhos alfataliglicerase in Brazil; ● the progress and results of the studies of our product candidates under development; ● the announcement of new products or product enhancements by us or our competitors; ● developments concerning intellectual property rights and regulatory approvals; ● variations in our and our competitors’ results of operations; ● changes in earnings estimates or recommendations by securities analysts; ● developments in the biotechnology industry; and ● general market conditions and other factors, including factors unrelated to our operating performance, such as the Israel-Hamas war.
Failure to obtain approval of the FDA, EMA or comparable foreign authorities of pegunigalsidase alfa or any of our other drug candidates in a timely manner, if at all, will severely undermine our business, financial condition and results of operation by reducing our potential marketable products and our ability to generate corresponding product revenues.
Failure to obtain approval of the FDA, EMA or comparable foreign authorities of any of our product candidates in a timely manner, if at all, will severely undermine our business, results of operations and financial condition by decreasing our ability to generate product revenues from the sales of such product candidates.
Each of these risks, if realized, could delay our clinical trials, the approval, if any, of our potential drug candidates by the FDA and other regulatory authorities, or the commercialization of our drug candidates or could result in higher product costs or otherwise deprive us of potential product revenues.
Any failure to identify and maintain fill and finish service providers could delay our preclinical and clinical trials, the approval, if any, of our potential drug candidates by the FDA and other regulatory authorities, or the commercialization of our drug candidates, or could result in higher product costs or otherwise deprive us of potential product revenues.
HIPAA created several new federal crimes, including health care fraud, and false statements relating to health care matters. The health care fraud statute prohibits knowingly and willfully executing a scheme to defraud any health care benefit program, including private third-party payers.
The health care fraud statute prohibits knowingly and willfully executing a scheme to defraud any health care benefit program, including private third-party payers.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 4. Mine Safety Disclosures Not applicable. ​ PART II
Biggest changeItem 4. Mine Safety Disclosures Not applicable. ​ ​ ​ 61 Table of Contents PART II
Our facilities in Israel currently contain approximately 14,700 sq/ft of manufacturing space and 3,400 sq/ft for a pilot plant, 11,700 sq/ft for offsite warehouse space and approximately 43,100 sq/ft of laboratories, front warehouse and office space, and are leased at a rate of approximately $81,000 per month.
Our facilities in Israel currently contain approximately 14,700 sq/ft of manufacturing space and 3,400 sq/ft for a pilot plant, 11,700 sq/ft for offsite warehouse space and approximately 43,100 sq/ft of laboratories, front warehouse and office space, and are leased at a rate of approximately $83,000 per month.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NYSE American under the symbol “PLX.” Our common stock is also listed on the TASE under the symbol “PLX;” however, we have decided to voluntarily delist our common stock from the TASE.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NYSE American under the symbol “PLX.” In 2023, we decided to voluntarily delist our common stock from the Tel Aviv Stock Exchange.
Equity Compensation Plan Information The following table provides information as of December 31, 2022 with respect to the shares of our common stock that may be issued under our existing equity compensation plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ A B C ​ ​ ​ ​ ​ ​ ​ Number of Securities Remaining ​ ​ Number of Securities ​ ​ ​ ​ Available for Future Issuance ​ ​ to be Issued ​ Weighted Average ​ Under Equity Compensation Plans ​ ​ Upon Exercise of ​ Exercise Price of ​ (Excluding Securities Reflected in Plan Category ​ Outstanding Options ​ Outstanding Options ​ Column A) Equity Compensation Plans Approved by Stockholders 5,519,315 ​ $ 2.28 136,738 Equity Compensation Plans Not Approved by Stockholders — ​ — — Total 5,519,315 ​ $ 2.28 136,738 ​ ​
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information as of December 31, 2023 with respect to the shares of our common stock that may be issued under our existing equity compensation plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ A B C ​ ​ ​ ​ ​ ​ ​ Number of Securities Remaining ​ ​ Number of Securities ​ ​ ​ ​ Available for Future Issuance ​ ​ to be Issued ​ Weighted Average ​ Under Equity Compensation Plans ​ ​ Upon Exercise of ​ Exercise Price of ​ (Excluding Securities Reflected in Plan Category ​ Outstanding Options ​ Outstanding Options ​ Column A) Equity Compensation Plans Approved by Stockholders 6,965,601 ​ $ 2.13 633,409 Equity Compensation Plans Not Approved by Stockholders — ​ — — Total 6,965,601 ​ $ 2.13 633,409 ​ Recent Sales of Unregistered Securities None.
A substantially greater number 59 Table of Contents of holders of our common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
Holders As of March 1, 2024, there were approximately 61 holders of record of our common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
Removed
The delisting will take effect on March 22, 2023 and the last trading date on the TASE will be March 20, 2023. As of February 15, 2023, there were approximately 65 holders of record of our common stock.
Added
Dividend Policy To date, we have not declared or paid any cash dividends on our common stock. We do not anticipate paying any dividends on our common stock in the foreseeable future.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] ​ 62 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the year ended December 31, 2021, our total research and development expenses were approximately $29.7 million comprised of approximately $18.4 million in subcontractor-related expenses, approximately $7.4 million of salary and related expenses, approximately $1.2 million of materials-related expenses and approximately $2.7 million of other expenses. 67 Table of Contents The decrease in research and developments expenses of $0.4 million, or 1%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 resulted primarily from a $0.6 million decrease in subcontractor-related expenses in connection with our PRX-102 clinical trials, partially offset by a $0.2 million increase in materials-related expenses .
Biggest changeTotal decrease in research and developments expenses was $12.2 million, or 42%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease in research and development expenses resulted primarily from a $11.5 million decrease in subcontractor-related expenses in connection with our PRX-102 clinical trials, and a $0.8 million decrease in materials-related expenses .
Research and Development Expenses For the year ended December 31, 2022, our total research and development expenses were approximately $29.3 million comprised of approximately $17.8 million in subcontractor-related expenses, approximately $7.3 million of salary and related expenses, approximately $1.4 million of materials-related expenses and approximately $2.8 million of other expenses.
For the year ended December 31, 2022, our total research and development expenses were approximately $29.3 million comprised of approximately $17.8 million in subcontractor-related expenses, approximately $7.3 million of salary and related expenses, approximately $1.4 million of materials-related expenses and approximately $2.8 million of other expenses.
Research and development expense consists of: 64 Table of Contents ● internal costs associated with research and development activities; ● payments made to third party contract research organizations, investigative/clinical sites and consultants; ● manufacturing development costs; ● personnel-related expenses, including salaries, benefits, travel, and related costs for the personnel involved in research and development; ● activities relating to the advancement of product candidates through preclinical studies and clinical trials; and ● facilities and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, as well as laboratory and other supplies.
Research and development expense consists of: ● internal costs associated with research and development activities; ● payments made to third party contract research organizations, investigative/clinical sites and consultants; ● manufacturing development costs; ● personnel-related expenses, including salaries, benefits, travel and related costs for the personnel involved in research and development; ● activities relating to the advancement of product candidates through preclinical studies and clinical trials; and 67 Table of Contents ● facilities and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, as well as laboratory and other supplies.
Our material cash needs for the next 24 months will include, among other expenses, (i) costs of preclinical and clinical trials, (ii) employee salaries, (iii) payments for rent and operation of our manufacturing facilities, (iv) fees to our consultants and legal advisors, patent advisors and fees for service providers in connection with our research and development efforts and (v) payments of principal and interest on our outstanding 2024 Notes.
Our material cash needs for the next 24 months will include, among other expenses, (i) costs of preclinical and clinical trials, (ii) employee salaries, (iii) payments for rent and operation of our manufacturing facilities, (iv) fees to our consultants and legal advisors, patent advisors and fees for service providers in connection with our research and development efforts, (v) payments of principal and interest on our outstanding 2024 Notes and (vi) tax payments.
We have identified two performance obligations in the Chiesi Agreements as follows: (1) the license and research and development services and (2) contingent performance obligation regarding future manufacturing.
We have identified two performance obligations in the Chiesi Agreements as follows: (1) the license and research and development services and (2) a contingent performance obligation regarding future manufacturing.
In addition to PRX-102, our product pipeline currently includes, among other candidates: (1) PRX-115, our plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat severe gout; and (2) PRX-119, our plant cell-expressed PEGylated recombinant human DNase I product candidate being designed to elongate half-life in the circulation for NETs-related diseases.
Our product pipeline currently includes, among other candidates: (1) PRX-115, our plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat severe gout; and (2) PRX-119, our plant cell-expressed PEGylated recombinant human DNase I product candidate being designed to elongate half-life in the circulation for NETs-related diseases.
If all of the contingencies with respect to milestone payments under our research and license agreements are met, as of December 31, 2022, the aggregate milestone payments payable would be approximately $8.4 million, and would be payable, if at all, as our projects progress over the course of a number of years.
If all of the contingencies with respect to milestone payments under our research and license agreements are met, as of December 31, 2023, the aggregate milestone payments payable would be approximately $8.4 million, and would be payable, if at all, as our projects progress over the course of a number of years.
On August 25, 2021, we completed the Exchanges of a substantial majority of the 2021 Notes with certain institutional note holders.
On August 25, 2021, we completed the exchanges of a substantial majority of the 2021 Notes with certain institutional note holders, or the Exchanges.
Failure to comply with such covenants may result in an event of default under the 2024 Indenture and, accordingly, may result in the acceleration of the payment of the notes or in additional interest payments. As of December 31, 2022, we were in compliance with all covenants.
Failure to comply with such covenants may result in an event of default under the 2024 Indenture and, accordingly, may result in the acceleration of the payment of the notes or in additional interest payments. As of December 31, 2023, we were in compliance with all covenants.
Under the Amended Pfizer Agreement, Pfizer is entitled to all of the revenues, and is responsible for 100% of expenses, globally for Elelyso, excluding Brazil where we are responsible for all expenses and retain all revenues. On June 18, 2013, we entered into the Brazil Agreement with Fiocruz.
Under the Amended Pfizer Agreement, Pfizer is entitled to all of the revenues, and is responsible for 100% of expenses globally for Elelyso, excluding Brazil where we are responsible for all expenses and retain all revenues. On June 18, 2013, we entered into the Brazil Agreement.
Year ended December 31, 2021 Compared to the Year Ended December 31, 2020 For a discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020, see Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Year ended December 31, 2022 Compared to the Year Ended December 31, 2021 For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, see Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022.
In addition, as of December 31, 2022 and 2021, none of the 2021 Notes were outstanding.
In addition, as of December 31, 2023, 2022 and 2021, none of the 2021 Notes were outstanding.
The transaction price of the Chiesi Agreements was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which we would be entitled upon the achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration.
The transaction price of the Chiesi Agreements was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which we would be entitled upon the 66 Table of Contents achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration.
Our ability to raise capital, and the amounts of necessary capital, will depend on many other factors, including: ● the duration and cost of discovery and preclinical development and laboratory testing and clinical trials for our product candidates; ● our progress in commercializing BioManguinhos alfataliglicerase in Brazil; ● the timing and outcome of regulatory review of our product candidates; ● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights; and 69 Table of Contents ● the costs associated with any litigation claims.
Our ability to raise capital, and the amounts of necessary capital, will depend on many other factors, including: ● the duration and cost of discovery and preclinical development and laboratory testing and clinical trials for our product candidates; ● Chiesi’s progress in commercializing Elfabrio; ● our progress in commercializing BioManguinhos alfataliglicerase in Brazil; ● the timing and outcome of regulatory review of our product candidates; ● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights; and ● the costs associated with any litigation claims.
The initial conversion rate of the 2024 Notes is 563.2216 shares of our common stock per $1,000 principal amount of 2024 Notes, which is equivalent to an initial conversion price of approximately $1.7755 per share of common stock, subject to 68 Table of Contents adjustment in certain circumstances.
The initial conversion rate of the 2024 Notes is 563.2216 shares of our common stock per $1,000 principal amount of 2024 Notes, which is equivalent to an initial conversion price of approximately $1.7755 per share of common stock, subject to adjustment in certain circumstances.
We expect to continue to incur significant expenditures in the near future as we increase our research and developments efforts with respect to our product candidates. We cannot anticipate the costs or the timing of the occurrence of such costs.
As we increase our research and developments efforts with respect to our current and future product candidates, we expect to continue to incur significant expenditures. We cannot anticipate the costs or the timing of the occurrence of such costs.
We do not have a dividend policy and given the lack of profitability, dividends are not expected in the foreseeable future, if at all.
We do not have a dividend policy and given the lack of profitability, dividends are not expected in the foreseeable future, if 68 Table of Contents at all.
We expect to finance our future cash needs through corporate collaborations, licensing or similar arrangements, public or private equity offerings and/or debt financings. We currently do not have any commitments for future external funding, except with respect to the development-related payments and milestone payments that may become payable under the Chiesi Agreements.
We expect to finance our future cash needs through sales of Elfabrio and Elelyso, corporate collaborations, licensing or similar arrangements, public or private equity offerings and/or debt financings. We currently do not have any commitments for future external funding, except with respect to the milestone payments that may become payable under the Chiesi Agreements.
As a result, we recognized a loss from extinguishment in the statement of operations equal to $0.8 million due to derecognition of the liability component and a reduction of stockholders’ equity of $12.2 million. As of December 31, 2022, a total of $28.75 million aggregate principal amount of the 2024 Notes were outstanding.
As a result, we recognized a loss from extinguishment in the statement of operations equal to $0.8 million due to derecognition of the liability component and a reduction of stockholders’ equity of $12.2 million. As of December 31, 2023, a total of $20.4 million aggregate principal amount of the 2024 Notes were outstanding.
As of December 31, 2022, we are subject to open purchase orders issued to certain suppliers and other vendors mainly in connection with our research and development and manufacturing activities that were outstanding as of December 31, 2022 for approximately $7.4 million over the next five fiscal years.
As of December 31, 2023, we are subject to open purchase orders issued to certain suppliers and other vendors mainly in connection with our research and development and manufacturing activities that were outstanding as of December 31, 2023 for approximately $8.1 million over the next five fiscal years.
In addition, under the Chiesi Ex-US Agreement, Protalix Ltd. is entitled to additional payments of up to $25.0 million in pegunigalsidase alfa development costs, and to receive additional payments of up to $320.0 million, in the aggregate, in regulatory and commercial milestone payments.
In addition, under the Chiesi Ex-US Agreement, Protalix Ltd. was entitled to additional payments of up to $25.0 million in pegunigalsidase alfa development costs, and to receive additional 64 Table of Contents payments of up to $320.0 million, in the aggregate, in regulatory and commercial milestone payments.
The leases relate primarily to office, laboratory and manufacturing space and vehicles used by our employees. Our aggregate future minimum commitments under these facility and vehicles leases over the next five fiscal years is approximately $3.8 million as of December 31, 2022.
The leases relate primarily to office, laboratory and manufacturing space and vehicles used by our employees. Our aggregate future minimum commitments under these facility and vehicles leases over the next five fiscal years is approximately $4.1 million as of December 31, 2023.
Obtaining marketing approval with respect to any product candidate in any country is dependent on our ability to implement the necessary regulatory steps required to obtain such approvals. We cannot reasonably predict the outcome of these activities.
Obtaining marketing approval with respect to any product candidate in any country is dependent on our ability to implement the necessary regulatory steps required to obtain such approvals, and demonstrate the safety and efficacy of its product candidates. We cannot reasonably predict the outcome of these activities.
We also generate revenues from the Chiesi Agreements. According to Accounting Standards Codification 606, Revenue from Contracts with Customers, and all the related amendments, or ASC 606, a performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services.
According to Accounting Standards Codification 606, Revenue from Contracts with Customers, and all the related amendments, or ASC 606, a performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services.
Revenues from license and R&D services represent mainly the revenues we recognized in connection with the Chiesi Agreements. Cost of Goods Sold Cost of goods sold was $19.6 million for the year ended December 31, 2022, an increase of $3.3 million, or 20%, compared to cost of goods sold of $16.3 million for the year ended December 31, 2021.
Revenues from license and R&D services represent mainly the revenues we recognized in connection with the Chiesi Agreements. Cost of Goods Sold Cost of goods sold was $23.0 million for the year ended December 31, 2023, an increase of $3.4 million, or 17%, compared to cost of goods sold of $19.6 million for the year ended December 31, 2022.
As of December 31, 2022, we have a contractual obligation of approximately $1.6 million for employee rights upon retirement. We are also party to certain research and license agreements.
As of December 31, 2023, we have a contractual obligation of approximately $0.7 million for employee rights upon retirement. We are also party to certain research and license agreements.
Liquidity and Capital Resources Our sources of liquidity include our cash balances and bank deposits. At December 31, 2022, we had $22.2 million in cash and cash equivalents. We have primarily financed our operations through equity and debt financings, business collaborations, and grants funding.
Liquidity and Capital Resources Our sources of liquidity include our cash balances and bank deposits. At December 31, 2023, we had $44.6 million in cash and cash equivalents and short term bank deposits. We have primarily financed our operations through equity and debt financings, business collaborations, and grants funding.
During the year ended December 31, 2021, we raised gross proceeds equal to approximately $8.8 million from sales of common stock under our ATM program through the sale of 1,867,552 shares of our common stock.
No sales were completed during the quarters ended September 30, 2023 and December 31, 2023. During the year ended December 31, 2021, we raised gross proceeds equal to approximately $8.8 million from sales of common stock under our ATM program through the sale of 1,867,552 shares of our common stock.
See “Risk Factors—If we are unable to develop and commercialize our product candidates, our business will be adversely affected” and “—We may not obtain the necessary U.S., EMA or other worldwide regulatory 65 Table of Contents approvals to commercialize our drug candidates in a timely manner, if at all, which would have a material adverse effect on our business, results of operations and financial condition.” We expect our research and development expenses to continue to be our primary expense in the future as we continue the advancement of our clinical trials and preclinical product development programs for our product candidates, particularly with respect to the development of pegunigalsidase alfa.
See “ Risk Factors—We may not obtain the necessary U.S., EMA or other worldwide regulatory approvals to commercialize our drug candidates in a timely manner, if at all, which would have a material adverse effect on our business, results of operations and financial condition. ” We expect our research and development expenses to continue to be our primary expense in the future as we continue the advancement of our clinical trials and preclinical product development programs for our product candidates.
Contractual obligations Our contractual obligations include obligations under our convertible notes, operating lease obligations, purchase obligations, a certain clinical contract and the liability for employee rights upon retirement. Our convertible senior notes had an aggregate outstanding principal balance of $28.75 million at December 31, 2022.
Contractual obligations Our contractual obligations include obligations under our convertible notes, operating lease obligations, purchase obligations, certain clinical contracts and the liability for employee rights upon retirement. Our convertible senior notes had an aggregate outstanding principal balance of $20.42 million at December 31, 2023.
The 2021 Notes were accounted for partially as liability and equity components of the instrument and partially as a debt host contract with an embedded derivative resulting from the conversion feature.
Our Senior Secured 7.50% Convertible Notes Due 2021, or the 2021 Notes, were accounted for partially as liability and equity components of the instrument and partially as a debt host contract with an embedded derivative resulting from the conversion feature.
The future manufacturing is contingent on regulatory approvals of the drug and we deem these services to be separately identifiable from other performance obligations in the contract. Manufacturing services post-regulatory approval are not interdependent or interrelated with the license and research and development services.
The future manufacturing was contingent on regulatory approvals of the drug and we deem these services to be separately identifiable from other performance obligations in the contract. Manufacturing services post-regulatory approval are not interdependent or interrelated with the license and research and development services. Following the regulatory approvals for Elfabrio received in May 2023, we started recognizing revenue from manufacturing.
These contracts do not contain minimum purchase commitments and are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation.
These contracts do not contain minimum purchase commitments and are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. In addition, we have a $0.1 million commitment payable to a business development consultant.
Our internal resources, employees and infrastructure are not tied to any individual research project and are typically deployed across all of our projects. We currently do not record and maintain research and development costs per project. The costs and expenses of our projects are partially funded by grants we have received from NATI.
Our internal resources, employees and infrastructure are not tied to any individual research project and are typically deployed across all of our projects. We currently do not record and maintain research and development costs per project.
Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agent shares of its common stock, par value $0.001 per share, or the common Stock, having an aggregate offering price of up to $20.0 million, or the ATM Shares.
Pursuant to the terms of the 2021 Sales Agreement, we were able to sell from time to time through the Agent shares of our common stock having an aggregate offering price of up to $20.0 million, or the ATM Shares.
Critical Accounting Policies Our significant accounting policies are more fully described in note 1 to our consolidated financial statements appearing at the end of this Annual Report on Form 10-K.
Critical Accounting Policies Our significant accounting policies are more fully described in note 1 to our consolidated financial statements appearing at the end of this Annual Report on Form 10-K. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.
Cash Flows Net cash used in operations was $25.0 million for the year ended December 31, 2022.
Cash Flows Net cash used in operations was $1.3 million for the year ended December 31, 2023.
Revenues from License and R&D services We recorded revenues from license and R&D services of $22.3 million for the year ended December 31, 2022, an increase of $0.7 million, or 3%, compared to revenues of $21.6 million for the year ended December 31, 2021.
Revenues from License and R&D services We recorded revenues from license and R&D services of $25.1 million for the year ended December 31, 2023, an increase of $2.8 million, or 13%, compared to revenues of $22.3 million for the year ended December 31, 2022.
Our future research and development expenses for pegunigalsidase alfa and the other product candidates will depend on the clinical success of each product candidate, as well as ongoing assessments of each product candidate’s commercial potential.
Clinical development timelines, the probability of success and development costs can differ materially from expectations. Our future research and development expenses for our product candidates will depend on the preclinical and clinical success of each product candidate, as well as ongoing assessments of each product candidate’s commercial potential.
Results of Operations Year ended December 31, 2022 Compared to the Year Ended December 31, 2021 Revenues from Selling Goods We recorded revenues of $25.3 million for the year ended December 31, 2022, an increase of $8.6 million, or 51%, compared to revenues of $16.7 million for the year ended December 31, 2021.
Results of Operations Year ended December 31, 2023 Compared to the Year Ended December 31, 2022 Revenues from Selling Goods We recorded revenues from selling goods of $40.4 million for the year ended December 31, 2023, an increase of $15.1 million, or 60%, compared to revenues of $25.3 million for the year ended December 31, 2022.
Financial Expenses and Income, Net Financial expense, net was $1.4 million for the year ended December 31, 2022, a decrease of $5.7 million, or 80%, compared to financial expenses of $7.1 million for the year ended December 31, 2021.
Financial Expenses and Income, Net Financial expense, net was $1.9 million for the year ended December 31, 2023, an increase of $0.5 million, or 36%, compared to financial expenses of $1.4 million for the year ended December 31, 2022.
We believe that our cash and cash equivalents and short-term bank deposits as of December 31, 2022 are sufficient to satisfy our capital needs for at least 12 months from the date that these financial statements are issued.
As of the issuance of these financial statements, the impact of the war has not had a material adverse effect on our operations. 65 Table of Contents We believe that our cash and cash equivalents and short-term bank deposits as of December 31, 2023 are sufficient to satisfy our capital needs for at least 12 months from the date that these financial statements are issued.
We have a contractual obligation of approximately $719,000 as of December 31, 2022 payable over the fiscal year ending December 31, 2023. In addition, we enter into contracts in the normal course of business with CROs, CMOs and other third parties for clinical trials, preclinical and other research studies and manufacturing services.
We have a contractual obligation of approximately $0.4 million as of December 31, 2023 payable over the fiscal year ending December 31, 2024 in connection with contractual arrangements we enter into in the normal course of business with CROs, CMOs and other clinical providers and consultants for clinical trials, preclinical and other research studies and manufacturing services in connection with our primary product development process.
We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations. 63 Table of Contents The discussion and analysis of our financial condition and results of operations is based on our financial statements, which we prepared in accordance with U.S. generally accepted accounting principles.
The discussion and analysis of our financial condition and results of operations is based on our financial statements, which we prepared in accordance with U.S. generally accepted accounting principles.
In addition, the Phase III clinical program includes two extension studies in which subjects that participated in our phase I/II clinical trials and phase III clinical trials may enroll and continue to be treated with PRX-102.
The phase III clinical program analyzed two potential dosing regimens: 1 mg/kg every two weeks and 2 mg/kg every four weeks. In addition, the phase III clinical program included two extension studies in which subjects that participated in our phase I/II clinical trials and phase III clinical trials had the opportunity to enroll and continue to be treated with PRX-102.
On July 2, 2021, we entered into the Sales Agreement in connection with a new ATM program, as amended on May 2, 2022, pursuant to which we may sell from time to time through the Agent ATM Shares having an aggregate offering price of up to $20.0 million. On the same date, we terminated our former ATM program.
On February 27, 2023, we entered into the 2023 Sales Agreement pursuant to which we may sell from time to time through the Agent ATM Shares having an aggregate offering price of up to $20.0 million as we had then completed the ATM program under the 2021 Sales Agreement.
Revenues Our primary sources of revenues include our sales of BioManguinhos alfataliglicerase in Brazil, of drug substance to Pfizer under our Amended Pfizer Agreement and of drug product to Chiesi under the Chiesi Agreements. We recognize revenue from the Amended Pfizer Agreement at a point in time when control over the product is transferred to customers (upon delivery).
Revenues Our primary sources of revenues include our sales of BioManguinhos alfataliglicerase in Brazil, of drug substance to Pfizer under our Amended Pfizer Agreement and of drug product to Chiesi under the Chiesi Agreements.
Under the terms of both of the Chiesi Agreements, Protalix Ltd. agreed to manufacture all of the pegunigalsidase alfa needed under the agreements, subject to certain exceptions, and Chiesi agreed to purchase pegunigalsidase alfa from Protalix, subject to certain terms and conditions.
We also agreed to negotiate certain manufacturing related matters. Under the terms of both of the Chiesi Agreements, Protalix Ltd. is required to manufacture all of the Elfabrio drug substance needed under the agreements, subject to certain exceptions, and Chiesi will purchase Elfabrio drug product from Protalix, subject to certain terms and conditions.
The 2024 Notes were accounted for as a liability (debt) and equity component (conversion option) as the convertible notes may be settled wholly or partly in cash, at our option, when converted. 66 Table of Contents Issuance costs regarding the issuance of the 2021 Notes, as well as the debt discount and debt issuance costs from the issuance of the 2024 Notes, were deferred and amortized over the applicable convertible notes period using the effective interest rate.
The 2024 Notes were accounted for as a liability (debt) and equity component (conversion option) as the convertible notes may be settled wholly or partly in cash, at our option, when converted.
Revenue from additional research and development services ordered by Chiesi is recognized over time using the cost-to-cost method. Research and Development Expense We expect our research and development expense to remain our primary expense in the near future as we continue to develop our product candidates.
Revenue from additional research and development services ordered by Chiesi is recognized over time using the cost-to-cost method.
In October 2015, Protalix Ltd. and Pfizer entered into the Amended Pfizer Agreement pursuant to which we sold to Pfizer its share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso. As part of the sale, we agreed to transfer our rights to Elelyso in Israel to Pfizer while gaining full rights to it in Brazil.
Since its approval by the FDA, Elelyso has been marketed by Pfizer in accordance with the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into the Amended Pfizer Agreement, pursuant to which we sold to Pfizer our share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso.
To date, Protalix Ltd. has received the complete amount of development costs to which it is entitled under the Chiesi Agreements.
To date, Protalix Ltd. has received the complete amount of development costs to which it is entitled under the Chiesi Agreements. In addition, following the approval of Elfabrio by the FDA, we received a milestone payment equal to $20.0 million.
As of December 31, 2022, shares of our common stock for total gross proceeds of approximately $11.3 million remain available to be sold under the Sales Agreement. During January and February 2023, we sold 3,590,813 ATM Shares under the Sales Agreement generating gross proceeds equal to approximately $5.5 million.
As of December 31, 2023, shares of our common 72 Table of Contents stock for total gross proceeds of approximately $6.4 million remain available to be sold under the 2023 Sales Agreement.
Wainwright & Co., LLC, as our sales agent, or the Agent, which was amended on May 2, 2022.
On July 2, 2021, we entered into an At The Market Offering Agreement, or the 2021 Sales Agreement, with H.C. Wainwright & Co., LLC, as our sales agent, or the Agent, which was amended on May 2, 2022.
Upon execution of the Sales Agreement, we terminated the ATM Equity Offering SM Sales Agreement, or the BofA Agreement, we had entered into on October 1, 2020 with BofA Securities, Inc., or BofA Securities.
Upon execution of the 2021 Sales Agreement, we terminated the ATM Equity Offering SM Sales Agreement it had entered into on October 1, 2020 with BofA Securities, Inc., or BofA Securities. During the term of the sales agreement with BofA Securities, we sold a total of 3,296,123 shares of common stock for total gross proceeds of approximately $13.8 million.
On February 7, 2022, we, together with Chiesi, submitted an MAA to the EMA which was subsequently validated by the EMA. The submission was made after the October 8, 2021 meeting we held, together with Chiesi, with the Rapporteur and Co-Rapporteur of the EMA regarding PRX-102.
An initial BLA for Elfabrio was submitted to the FDA on May 27, 2020 under the FDA’s Accelerated Approval pathway, but resulted in a CRL. The MAA was submitted to the EMA on February 7, 2022, after the October 8, 2021 meeting we held, together with Chiesi, with the Rapporteur and Co-Rapporteur of the EMA regarding PRX-102.
To the extent we need to obtain additional financing, it may be more difficult for us to do so given the volatility of the price of our common stock.
Although we expect the revenues generated from the sales of Elfabrio and Elelyso will increase, such revenues may not be sufficient to fund the expenditures. To the extent we need to obtain additional financing in excess of such anticipated revenues, it may be difficult for us to do so given the volatility of the price of our common stock.
During the year ended December 31, 2022, we raised gross proceeds equal to approximately $8.7 million from the sale of 7,473,038 shares of our common stock under our ATM program.
During the year ended December 31, 2023, we raised gross proceeds equal to approximately $24.9 million from the sale of 12,560,150 shares of our common stock under our ATM program. All such sales were completed during the quarters ended March 31, 2023 and June 30, 2023.
Currency fluctuations during the year ended December 31, 2022, resulted in $1.0 million being recognized as financial income.
Currency fluctuations during the year ended December 31, 2022, resulted in $1.0 million being recognized as financial income. We do not believe currency fluctuations have had a material effect on our results of operations during the years ended December 31, 2022 or 2023.
The net loss for the year ended December 31, 2022 of $14.4 million was further increased by a $7.2 million decrease in contracts liability and a $5.3 million decrease in accounts payable and accruals and $1.2 million increase in accounts receivable-trade and other assets, which was partially offset by a $2.1 million in share-based compensation and $1.1 million in depreciation and $1.2 million decrease in inventories.
The net income was increased by a $5.3 million increase in accounts payable and accruals, $3.4 million in share-based compensation and $1.2 million in depreciation. Net cash used in investing activities for the year ended December 31, 2023 was $16.7 million and consisted primarily of net investment in bank deposits.
Selling, General and Administrative Expenses Selling, general and administrative expenses were $11.7 million for the year ended December 31, 2022, a decrease of $1.0 million, or 8%, from $12.7 million for the year ended December 31, 2021. The decrease resulted primarily from a decrease in professional fees and salary-related expenses .
Selling, General and Administrative Expenses Selling, general and administrative expenses were $15.0 million for the year ended December 31, 2023, an increase of $3.3 million, or 28%, from $11.7 million for the year ended December 31, 2022.
On October 19, 2017, Protalix Ltd. and Chiesi entered into the Chiesi Ex-US Agreement pursuant to which Protalix Ltd. granted to Chiesi an exclusive license for all markets outside of the United States to commercialize pegunigalsidase alfa. 62 Table of Contents On July 23, 2018, Protalix Ltd. and Chiesi entered into the Chiesi US Agreement with respect to the commercialization of pegunigalsidase alfa in the United States.
We have entered into two exclusive global licensing and supply agreements for Elfabrio with Chiesi. In October 2017 and July 2018, Protalix Ltd., our wholly-owned subsidiary, entered into the Chiesi Agreements pursuant to which Chiesi was granted an exclusive license for all markets, both within and outside of the United States to commercialize Elfabrio.
We do not believe currency fluctuations have had a material effect on our results of operations during the years ended December 31, 2021 or 2022. 70 Table of Contents Recently Issued Accounting Pronouncements Certain recently issued and recently adopted accounting pronouncements are discussed in note 1r of the financial statements included in Item 8 of this Annual Report on Form 10-K.
Recently Issued Accounting Pronouncements Certain recently issued and recently adopted accounting pronouncements are discussed in Note 1(r) of the financial statements included in Item 8 of this Annual Report on Form 10-K. 73 Table of Contents
Under each of the Chiesi Ex-US Agreement and the Chiesi US Agreement, collectively, the Chiesi Agreements, Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of each agreement.
As of December 31, 2023, shares of Common Stock for total gross proceeds of approximately $6.4 million remain available to be sold under the 2023 Sales Agreement. Under each of the Chiesi Agreements, Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of each agreement.
Since the customer benefits from the research and development services as the entity performs the service, revenue from granting the license and the research and development services is recognized over time using the cost-to-cost method. We used significant judgment when we determined the costs expected to be incurred upon satisfying the identified performance obligation.
Following the approval of Elfabrio by the FDA, we received a milestone payment equal to $20.0 million. Since the customer benefits from the research and development services as the entity performs the service, revenue from granting the license and the research and development services is recognized over time using the cost-to-cost method.
PRX-115 – Uricase Preclinical Phase I clinical trial to commence in the first half of 2023. ​ PRX-119 – Long Acting DNase I Preclinical ​ ​ We anticipate incurring increasing costs in connection with the continued development of all of the product candidates in our pipeline.
The following table identifies our current major research and development projects: Project Status Expected Near Term Milestones PRX-115 – PEGylated Uricase Phase I Preliminary results from the phase I clinical trial expected in the second quarter of 2024. ​ PRX-119 – Long Acting DNase I Preclinical ​ ​ We anticipate incurring increasing costs in connection with the continued development of PRX-115 and PRX-119 and in the expansion of our pipeline.
The increase resulted from an increase of $2.2 million in sales to Pfizer, an increase of $3.1 million in sales to Brazil and an increase of $3.3 million in sales to Chiesi.
The increase 69 Table of Contents resulted primarily from an increase of $14.1 million in sales of Elfabrio drug product to Chiesi, following the approvals by the FDA and the EMA of Elfabrio , an increase of $0.1 million in sales to Pfizer and of $0.9 million in sales to Brazil, resulting from timing differences.
On November 9, 2022, we, together with Chiesi, our development and commercialization partner for PRX-102, resubmitted to the FDA a BLA for PRX-102 for the potential treatment of adult patients with Fabry disease.
Some of the withdrawals transfer to a commercial setting, others withdraw for other reasons. 63 Table of Contents The BLA for Elfabrio for the treatment of adult patients with Fabry disease was resubmitted to the FDA on November 9, 2022.
Otherwise, we hold the worldwide commercialization rights to our other proprietary development candidates. In addition, we continuously evaluate potential strategic marketing partnerships as well as collaboration programs with biotechnology and pharmaceutical companies and academic research institutes.
Except with respect to Elfabrio and Elelyso, we hold the worldwide commercialization rights to our other proprietary development candidates.
During the term of the sales agreement with BofA Securities, we sold a total of 3,296,123 shares of common stock for total gross proceeds of approximately $13.8 million. As of December 31, 2022, shares of our common stock for total gross proceeds of approximately $11.3 million remain available to be sold under the Sales Agreement.
During the term of the 2021 Sales Agreement which ended during the quarter ended March 31, 2023, we sold a total of 13,980,060 ATM Shares for total gross proceeds of approximately $20.0 million, thereby completing the ATM program under said agreement.
Under the Chiesi US Agreement, Chiesi is required to make tiered payments of 15% to 40% of its net sales, depending on the amount of annual sales in the United States, as consideration for product supply.
Under the Chiesi Ex-US Agreement, the price payable to us for drug product supplied is based on a range of 15% to 35% of the average selling price of the drug product in the applicable territory, and, under the Chiesi US Agreement, such price is based on a range of 15% to 40% of the average selling price of the drug product in the United States.
The PRX-102 phase III clinical program includes three separate studies which are referred to as the BALANCE study, the BRIDGE study and the BRIGHT study, each of which has been completed.
Elfabrio was the subject of a phase III clinical program studying the drug as a treatment of patients with Fabry disease, a rare, genetic lysosomal disorder. The phase III clinical program included three separate studies, the BALANCE study, the BRIDGE study and the BRIGHT study.
Removed
We developed our first commercial drug product, Elelyso ® , using our ProCellEx system and we are now focused on utilizing the system to develop a pipeline of proprietary, clinically superior versions of complex recombinant therapeutic proteins that primarily target large, established pharmaceutical markets and that in most cases rely upon known biological mechanisms of action.
Added
To date, we have successfully developed two ERTs; Elfabrio (pegunigalsidase alfa) for the treatment of adult patients with a confirmed diagnosis of Fabry disease and Elelyso (taliglucerase alfa) for the treatment of adult patients with Gaucher disease.
Removed
With our experience to date, we believe ProCellEx will enable us to develop additional proprietary recombinant proteins that are therapeutically superior to existing recombinant proteins currently marketed for the same indications, including applying the unique properties of our ProCellEx system for the oral delivery of therapeutic proteins.
Added
Elfabrio, which we referred to as PRX-102 during its development stage, has been approved for marketing in the United States, the European Union, Great Britain, Switzerland and Israel. Chiesi is our commercialization partner for Elfabrio. We have licensed the rights to commercialize Elelyso worldwide (other than Brazil) to Pfizer, and in Brazil to Fiocruz, an arm of the Brazilian MoH.
Removed
The most advanced investigational drug in our product pipeline is pegunigalsidase alfa, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder, which is the subject of a phase III clinical program.
Added
Elelyso is marketed as BioManguinhos alfataliglicerase in Brazil. Our strategy is to develop proprietary recombinant proteins designed to address high, unmet needs in the rare disease space that are therapeutically superior to existing recombinant proteins currently marketed for the same indications. Consistent with this strategy, we have a number of product candidates in varying stages of the clinical development process.
Removed
The studies were designed to evaluate the potential for improved efficacy and better quality of life for adult patients with Fabry disease and to evaluate the safety of our drug/therapy.
Added
On May 5, 2023, the EC announced that it had approved the MAA for Elfabrio and on May 9, 2023, the FDA announced that it had approved the BLA for Elfabrio, each for adult patients with a confirmed diagnosis of Fabry disease. Both approvals cover the 1 mg/kg every two weeks dosage.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed8 unchanged
Biggest changeThe exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 ​ 2021 ​ 2022 Average rate for period 3.442 ​ 3.230 ​ 3.360 Rate at period-end 3.215 ​ 3.110 ​ 3.519 ​ To date, we have not engaged in hedging transactions.
Biggest changeThe exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2021 ​ 2022 ​ 2023 ​ Average rate for period ​ ​ 3.230 ​ 3.360 ​ 3.687 ​ Rate at period-end ​ ​ 3.110 ​ 3.519 ​ 3.627 ​ ​ To date, we have not engaged in hedging transactions.
Foreign currency translation gains or losses are recognized in the statement of operations. Approximately 43% of our costs, including salaries, expenses and office expenses, are incurred in NIS. Inflation in Israel may have the effect of increasing the U.S. dollar cost of our operations in Israel.
Foreign currency translation gains or losses are recognized in the statement of operations. Approximately 4 4 % of our costs, including salaries, expenses and office expenses, are incurred in NIS. Inflation in Israel may have the effect of increasing the U.S. dollar cost of our operations in Israel.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 71 Table of Contents
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Other PLX 10-K year-over-year comparisons