Protalix BioTherapeutics Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the consolidated financial statements and the related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023. Some of the information contained in this discussion and analysis, particularly with respect to our plans and strategy for our business and related financing, includes forward-looking statements within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including statements regarding expectations, beliefs, intentions or strategies for the future. When used in this report, the terms “anticipate,” “believe,” “estimate,” “expect,” “can,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and words or phrases of similar import, as they relate to our company, our subsidiaries or our management, are intended to identify forward-looking statements. We intend that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance, and we undertake no obligation to update or revise, nor do we have a policy of updating or revising, any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable law. Forward-looking statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements as a result of several factors.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the consolidated financial statements and the related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023. Some of the information contained in this discussion and analysis, particularly with respect to our plans and strategy for our business and related financing, includes forward-looking statements within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including statements regarding expectations, beliefs, intentions or strategies for the future. When used in this report, the terms “anticipate,” “believe,” “estimate,” “expect,” “can,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and words or phrases of similar import, as they relate to our company, our subsidiaries or our management, are intended to identify forward-looking statements. We intend that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance, and we undertake no obligation to update or revise, nor do we have a policy of updating or revising, any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable law. Forward-looking statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements as a result of several factors, including those set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and in this Quarterly Report on Form 10-Q.

Previous wording

●risks related to the amount and sufficiency of our cash, cash equivalents and short-term bank deposits;

Current wording

●risks related to the amount and sufficiency of our cash and cash equivalents;

Previous wording

The global market for Gaucher disease, that includes Sanofi’s Cerezyme®, Shire’s Vpriv® and Sanofi’s Cerdelga®, among others, was $1.6 billion in 2023, is forecasted to be approximately $1.6 billion in 2024 and is forecasted to grow at a CAGR of approximately -0.57% from 2023-2030.

Current wording

The global market for Gaucher disease, that includes Sanofi’s Cerezyme®, Shire’s (acquired by Takeda Pharmaceutical Company Limited) Vpriv® and Sanofi’s Cerdelga®, among others, was $1.6 billion in 2023, is forecasted to be approximately $1.65 billion in 2024 and is forecasted to grow at a compound annual growth rate (CAGR) of approximately -0.12% from 2023-2030.

Previous wording

In August and September of 2023, Elfabrio was approved in Great Britain and Switzerland, respectively, and by the Israeli Ministry of Health in January 2024, for long-term enzyme replacement therapy in adult patients with a confirmed diagnosis of Fabry disease.

Current wording

Since the approvals by the FDA and the EMA, Elfabrio has also been approved for marketing in Great Britain, Switzerland, Peru and Israel for long-term enzyme replacement therapy in adult patients with a confirmed diagnosis of Fabry disease.

Previous wording

The global market for Fabry disease, that includes agalsidase beta, Sanofi’s Fabrazyme®, agalsidase alfa, Shire’s (acquired by Takeda Pharmaceutical Company Limited) Replagal® and Amicus Therapeutics’ Galafold®, among others, is forecasted to be approximately $2.1 billion in 2024 and is forecasted to grow at a CAGR of 7.3% from 2023-2030 reaching approximately $3.2 billion in annual sales in 2023.

Current wording

The global market for Fabry disease, that includes agalsidase beta, Sanofi’s Fabrazyme®, agalsidase alfa, Shire’s Replagal® and Amicus Therapeutics’ Galafold®, among others, is forecasted to be approximately $2.1 billion in 2024 and is forecasted to grow at a CAGR of 7.4% from 2023-2030 reaching approximately $3.3 billion in annual sales in 2030.

Previous wording

On November 9, 2022, we, together with Chiesi, resubmitted to the FDA a BLA for PRX-102, the name we assigned to Elfabrio internally prior to its approvals, for the potential treatment of adult patients with Fabry disease. 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. In preparation for the BLA resubmission, we and Chiesi participated in a Type A (End of

Current wording

On November 9, 2022, we, together with Chiesi, resubmitted to the FDA a BLA for PRX-102, the name we assigned to Elfabrio internally prior to its approvals, for the potential treatment of adult patients with Fabry disease. 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. In preparation for the BLA resubmission, we and Chiesi participated in a Type A (End of Review) meeting with the FDA on September 9, 2021. As part of the meeting minutes provided by the FDA, which included the

Previous wording

Review) meeting with the FDA on September 9, 2021. 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. 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 ourBALANCEstudy, 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 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 theBRIDGE study, and safety data from our then on-going clinical studies of PRX-102 in adult patients receiving 1 mg/kg every two weeks.

Current wording

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. 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 ourBALANCEstudy, 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 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 theBRIDGE study, and safety data from our then on-going clinical studies of PRX-102 in adult patients receiving 1 mg/kg every two weeks.

Previous wording

No concerns relating to the potential safety or efficacy of PRX-102 in the submitted data package were raised in the CRL. The FDA noted in CRL that the FDA noted that an inspection of our manufacturing facility in Carmiel, Israel, including the FDA’s subsequent assessment of any related FDA findings, is required before the FDA can approve a new drug. Due to travel restrictions during the COVID-19 pandemic, the FDA was unable to conduct the required pre-approval inspection during the review cycle. In addition to the foregoing, the FDA noted that agalsidase beta had recently been converted to full approval, a change in regulatory circumstances which had to be addressed in the resubmitted BLA for PRX-102.

Current wording

No concerns relating to the potential safety or efficacy of PRX-102 in the submitted data package were raised in the CRL. The FDA noted in CRL that an inspection of our manufacturing facility in Carmiel, Israel, including the FDA’s subsequent assessment of any related FDA findings, is required before the FDA can approve a new drug. Due to travel restrictions during the COVID-19 pandemic, the FDA was unable to conduct the required pre-approval inspection during the review cycle. In addition to the foregoing, the FDA noted that agalsidase beta had recently been converted to full approval, a change in regulatory circumstances which had to be addressed in the resubmitted BLA for PRX-102.

Previous wording

TheBALANCE study (PB-102-F20, NCT02795676) was a pivotal 24-month, randomized, double blind, active control study of PRX-102 in adult Fabry patients with deteriorating renal function designed to evaluate the safety and efficacy of 1 mg/kg of PRX-102 administered every two weeks compared to agalsidase beta. The Clinical Study Report for theBALANCE study was completed in July 2022. The final analysis confirmed the positive top-line results (announced in April 2022) and favorable tolerability profile. A total of

Current wording

TheBALANCE study (PB-102-F20, NCT02795676) was a pivotal 24-month, randomized, double blind, active control study of PRX-102 in adult Fabry patients with deteriorating renal function designed to evaluate the safety and efficacy of 1 mg/kg of PRX-102 administered every two weeks compared to agalsidase beta. The Clinical Study Report for theBALANCE study was completed in July 2022. The final analysis confirmed the positive top-line results (announced in April 2022) and favorable tolerability profile. 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 -

Previous wording

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. Patients were randomized on a 2:1 ratio for switching to PRX-102 or continuing on agalsidase beta. A total of 77 patients were treated; 52 with PRX-102 and 25 with agalsidase beta. Approximately 40% of the enrolled patients were female.

Current wording

2 mL/min/1.73 m 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 77 patients were treated; 52 with PRX-102 and 25 with agalsidase beta. Approximately 40% of the enrolled patients were female.

Previous wording

Final results of the data generated in theBRIDGE 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. Eighteen

Current wording

Final results of the data generated in theBRIDGE 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. Eighteen of the patients who completed the study opted to roll over to a long-term extension study and continue to be treated with PRX-102. In

Previous wording

of the patients who completed the study opted to roll over to a long-term extension study and continue to be treated with PRX-102. In the study, the mean annualized eGFR slope of the study participants improved from -5.90 mL/min/1.73m 2/year while on agalsidase alfa to -1.19 mL/min/1.73m 2/year on PRX-102 in all patients. Male patients improved from -6.36 mL/min/1.73m 2/year to -1.73mL/min/1.73m 2/year and female patients improved from -5.03 mL/min/1.73m 2/year to -0.21 mL/min/1.73m 2/year. Following the switch to PRX-102, there was a decrease in patients with progressing or fast progressing kidney disease which is consistent with the therapeutic goals for Fabry disease, as identified by Christoph Wanner, et. al., in 2019, and most patients achieved a stable status post-switch.

Current wording

the study, the mean annualized eGFR slope of the study participants improved from -5.90 mL/min/1.73m 2/year while on agalsidase alfa to -1.19 mL/min/1.73m 2/year on PRX-102 in all patients. Male patients improved from -6.36 mL/min/1.73m 2/year to -1.73mL/min/1.73m 2/year and female patients improved from -5.03 mL/min/1.73m 2/year to -0.21 mL/min/1.73m 2/year. Following the switch to PRX-102, there was a decrease in patients with progressing or fast progressing kidney disease which is consistent with the therapeutic goals for Fabry disease, as identified by Christoph Wanner, et. al., in 2019, and most patients achieved a stable status post-switch.

Previous wording

Study outcome measures show that plasma lyso-Gb 3 concentrations remained stable during the study with a mean change (±SE) of 3.01 nM (0.94) from baseline (19.36 nM ±3.35) to Week 52 (22.23 ±3.60 nM). Mean absolute eGFR values were stable during the

Current wording

Study outcome measures show that plasma lyso-Gb 3 concentrations remained stable during the study with a mean change (±SE) of 3.01 nM (0.94) from baseline (19.36 nM ±3.35) to Week 52 (22.23 ±3.60 nM). Mean absolute eGFR values were stable during the 52-week treatment period, with a mean change from baseline of -1.27 mL/min/1.73 m 2 (1.39). Mean (SE) eGFR slope, at the end of the study, for the overall population, was -2.92 (1.05) mL/min/1.73 m 2/year indicating stability.

Previous wording

Patients who completed theBALANCE,BRIDGE andBRIGHT 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. Overall, 126 subjects who participated in our PRX-102 clinical program initially opted, with the advice of the treating physician, to enroll in one of our long-term, open label, extension studies of PRX-102: 97 patients in the 1 mg/kg every two weeks extension study (PB-102-F60, NCT03566017) (10 subjects who completed an extension study from the phase I/II study, 18 subjects who completed theBRIDGE study; 69 subjects who completed theBALANCE study), and 29 subjects who completed theBRIGHT study in the 2 mg/kg every four weeks extension study (PB-102-F51, NCT03614234). Two of the subjects in the PB-102-F51 study are being treated with 1 mg/kg every two weeks. As of March 1, 2023, sponsorship of the two extension studies was transferred to Chiesi, and Chiesi is now administering the open-label extension studies.

Current wording

term, open label, extension studies of PRX-102: 97 patients in the 1 mg/kg every two weeks extension study (PB-102-F60, NCT03566017) (10 patients who completed an extension study from the phase I/II study, 18 patients who completed theBRIDGE study; 69 patients who completed theBALANCE study), and 29 patients who completed theBRIGHT study in the 2 mg/kg every four weeks extension study (PB-102-F51, NCT03614234). Two of the patients in the PB-102-F51 study are being treated with 1 mg/kg every two weeks. As of March 1, 2023, sponsorship of the two extension studies was transferred to Chiesi, and Chiesi is now administering the open-label extension studies.

Previous wording

Over time, and as Elfabrio is approved for marketing in different jurisdictions, participants switch-out of the open-label extension studies. Most of them have transferred to a commercial setting; others withdraw for other reasons.

Current wording

Over time, and as Elfabrio is approved for marketing in different jurisdictions, patients switch-out of the open-label extension studies. Most of them have transferred to a commercial setting; others withdraw for other reasons.

Previous wording

On July 23, 2018, Protalix Ltd. entered into the Chiesi US Agreement with respect to the development and commercialization of PRX-102 in the United States. 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. is also eligible to receive additional payments of up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments. Chiesi agreed to make tiered payments for drug product purchased from

Current wording

On July 23, 2018, Protalix Ltd. entered into the Chiesi US Agreement with respect to the development and commercialization of PRX-102 in the United States. 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. is also eligible to receive additional payments of up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments. Chiesi agreed to make tiered payments for drug product purchased from Protalix based on the average selling price of the drug product in the United States multiplied by 15% to 40%, subject to certain terms and conditions, depending on the amount of annual net sales in the United States.

Previous wording

On May 13, 2021, we signed a binding term sheet with Chiesi amending the Chiesi Agreements in order to provide our company with near-term capital. Chiesi agreed to make a $10.0 million payment to us before the end of the second quarter of 2021 in exchange for a $25.0 million reduction in a longer term regulatory milestone payment provided in the Chiesi EX-US Agreement. All other regulatory and commercial milestone payments remain unchanged. We received the payment in June 2021. We also agreed to negotiate certain manufacturing related matters.

Current wording

On May 13, 2021, we signed a binding term sheet with Chiesi amending the Chiesi Agreements in order to provide our company with near-term capital. Chiesi agreed to make a $10.0 million payment to us before the end of the second quarter of 2021 in exchange for a $25.0 million reduction in a longer term regulatory milestone payment provided in the Chiesi EX-US Agreement. All other regulatory

Previous wording

PRX-115 is our recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme under development for the potential treatment of patients with uncontrolled gout. The uricase enzyme, that does not exist naturally in humans, converts uric acid to allantoin, which is easily eliminated through urine. This recombinant enzyme, expressed via our ProCellEx system, is designed to lower uric acid levels and improve clinical manifestation of the disease while having low immunogenicity and increased half-life of the drug in the blood. Pre-clinical data demonstrates long half-life, reduced immunogenic risk and high specific activity which supports the potential of PRX-115 to be a safe and effective treatment for patients with gout. One-month multiple dosing toxicity studies in two species and 6-month multiple dosing toxicity study in one species were conducted to support single and multiple dose studies is humans.

Current wording

PRX-115 is our recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme under development for the potential treatment of patients with uncontrolled gout. The uricase enzyme, that does not exist naturally in humans, converts uric acid to allantoin, which is easily eliminated through urine. This recombinant enzyme, expressed via our ProCellEx system, is designed to lower uric acid levels and improve clinical manifestation of the disease while having low immunogenicity and increased half-life of the drug in the blood. Pre-clinical data demonstrates long half-life, reduced immunogenic risk and high specific activity which supports the potential of PRX-115 to be a safe and effective treatment for patients with gout. One-month multiple dosing toxicity studies in two species and 6-month multiple dosing toxicity study in one species were conducted to support single and multiple dose studies in humans.

Previous wording

Zealand Clinical Research (NZCR) under the New Zealand Medicines and Medical Devices Safety Authority (MedSafe) and the Health and Disability Ethics Committee (HDEC) guidelines. The study was initially designed to include seven sequential dosing cohorts, each composed of eight subjects (six active and two placebo), a 3:1 ratio. Subjects in each cohort, males and females aged 18 through 65, received a single dose of PRX-115 and are analyzed for safety, pharmacokinetics (PK) and pharmacodynamics (PD) (concentrations of plasma uric acid) for 85 days.

Current wording

In March 2024, we initiated our phase I clinical trial of PRX-115 for the potential treatment of uncontrolled gout entitled “A Double-blind, Placebo-controlled, Single Ascending Dose Study to Evaluate the Safety, Tolerability, Pharmacokinetics, and Pharmacodynamics Properties of PRX-115 in Adult Volunteers With Elevated Uric Acid Levels” (NCT05745727), or theFIH study. The study is being conducted at New Zealand Clinical Research (NZCR) under the New Zealand Medicines and Medical Devices Safety Authority (MedSafe) and the Health and Disability Ethics Committee (HDEC) guidelines. The study was initially designed to include seven sequential dosing cohorts, each composed of eight subjects (six active and two placebo), a 3:1 ratio. Subjects in each cohort, males and females aged 18 through 65, received a single dose of PRX-115 and are analyzed for safety, pharmacokinetics (PK) and pharmacodynamics (PD) (concentrations of plasma uric acid) for 85 days.

Previous wording

After a review of initial positive top-line results from the initial seven cohorts, and following the review and acceptance of the safety data from such seven cohorts by the safety and monitoring committee for dose escalation for theFIH study, we decided to expand the study by adding an eighth cohort of eight new subjects to analyze a higher dose and its potential to result in increased exposure time. As of June 30, 2024, all 64 subjects with no previous exposure to PEGylated uricase have been enrolled in the study and follow-up is ongoing. In addition to the expansion of theFIH study, we have commenced preparations for a phase II clinical trial of PRX-115.

Current wording

After a review of initial positive top-line results from the initial seven cohorts, and following the review and acceptance of the safety data from such seven cohorts by the safety and monitoring committee for dose escalation for theFIH study, we decided to expand the study by adding an eighth cohort of eight new subjects to analyze a higher dose and its potential to result in increased exposure time. Currently, all eight cohorts have completed the study and the data is locked and is being analyzed.

Previous wording

Key preliminary results from the first seven cohorts of theFIH study are as follows:

Current wording

Preliminary results from the fullFIH study are as follows:

Previous wording

●Exposure to PRX-115 increased in a dose-dependent manner.

Current wording

●Exposure to PRX-115 increased in a dose-dependent manner. PRX-115 levels were observed in plasma for up to 12 weeks from subjects in cohorts 6, 7, and 8.

Previous wording

●PRX-115 rapidly reduced plasma uric acid concentrations to below 6.0 mg/dL over time following a single administration. The effect of PRX-115 on plasma uric acid concentrations and the duration of response was found to be dose dependent.

Current wording

●In all tested doses, a single dose of PRX-115 rapidly reduced plasma uric acid levels. The effect and duration of response were found to be dose dependent. Following a single dose, mean plasma uric acid levels remained below 6.0 mg/dL for up to 12 weeks at the highest dose levels.

Previous wording

●PRX-115 was well-tolerated. Twenty-six percent (11/42) of the subjects treated with PRX-115 in the first seven cohorts reported study drug-related adverse events, the majority being mild to moderate and transient in nature. One subject in cohort 2 experienced an anaphylactic reaction immediately following the commencement of the infusion, and the reaction was fully resolved. There were no other serious adverse events reported in the study, and no adverse events were reported in the highest doses, cohorts 6 and 7.

Current wording

●All randomized participants completed the study. PRX-115 was found to be well-tolerated with only 25% of the subjects treated with PRX-115 in the study (12/48) having reported study drug-related adverse events. The majority of such adverse events were mild to moderate and transient in nature. One subject experienced an anaphylactic reaction in cohort 2 immediately following the commencement of the infusion (6 minutes) and, accordingly, was exposed to 5% of the applicable PRX-115 dose. The reaction resolved completely and the subject continued in the study for follow-up safety assessments. Premedication with anti-histamines and steroids were administered to all subjects following the anaphylaxis event. No other subjects experienced a similar reaction and no other serious adverse events were reported in the study. No related adverse events were reported for subjects treated in cohorts 6 and 7, and only for one patient per cohort in cohorts 4, 5 and 8.

Previous wording

Uncontrolled gout is when serum uric acid (sUA) levels are above the maximum medically appropriate level (6.0 mg/dL) and cannot be treated with available urate lowering therapies. It is also reported to involve urate crystal deposition and associated inflammation in joints, soft tissues and organs. Currently available ULTs can be effective in treating gout. However, low adherence, under dosing, disease progression that cause high patient burden or patients that are not suitable for available therapy, require new, effective and safe therapies to treat these underserved uncontrolled gout patients.

Current wording

Uncontrolled gout is when serum uric acid (sUA) levels are above the maximum medically appropriate level (6.8 mg/dL) and cannot be treated with available urate lowering therapies. It is also reported to involve urate crystal deposition and associated inflammation in joints, soft tissues and organs. Currently available ULTs can be effective in treating gout. However, factors such as low adherence, under dosing, disease progression that cause high patient burden or patients that are not suitable for available therapy, require new, effective and safe therapies to treat these underserved uncontrolled gout patients.

Previous wording

A key element of our overall strategy is to establish a broad portfolio of patents to protect our proprietary technology, proprietary product and product candidates and their methods of use. As of June 30, 2024, we hold a broad portfolio of more than 70 patents in Europe, the United States, Israel and additional countries worldwide, as well as approximately 50 pending patent applications.

Current wording

A key element of our overall strategy is to establish a broad portfolio of patents to protect our proprietary technology, proprietary product and product candidates and their methods of use. As of September 30, 2024, we hold a broad portfolio of more than 15 patent families consisting of over 70 patents in Europe, the United States, Israel and additional countries worldwide, as well as approximately 50 pending patent applications.

Previous wording

Consistent with our corporate strategy, we are focusing on new, early-stage product candidates that treat indications for which there are high unmet needs in terms of efficacy and safety, including renal diseases. Treatments of interest will address both genetic and non-genetic diseases. We intend to use our ProCellEx platform and PEGylization capabilities, as well as other modalities such as small molecules and oligonucleotides, to take advantage of highly innovative opportunities. We are also exploring novel platform technologies.

Current wording

Consistent with our corporate strategy, we are focusing on new, early-stage product candidates that treat indications for which there are high unmet needs in terms of efficacy and safety, including renal diseases. Treatments of interest will address both genetic and non-genetic diseases. We intend to use our ProCellEx platform and PEGylation capabilities, as well as other modalities such as small molecules and oligonucleotides, to take advantage of highly innovative opportunities. We are also exploring novel platform technologies.

Previous wording

We recorded revenues from license and R&D services of $0.2 million for the three months ended June 30, 2024, a decrease of $19.8 million, or 99%, compared to revenues of $20.0 million for the three months ended June 30, 2023. Revenues from license and R&D services are comprised primarily of revenues we recognized in connection with the Chiesi Agreements. The revenues from license and R&D services for the three months ended June 30, 2023 were the result ofthe $20.0 million regulatory milestone payment from Chiesi in connection with the FDA approval of Elfabrio granted during that period.

Current wording

We recorded revenues from license and R&D services of $0.1 million for the three months ended September 30, 2024, a decrease of $0.1 million, or 50%, compared to revenues of $0.2 million for the three months ended September 30, 2023. Revenues from license and R&D services are comprised primarily of revenues we recognized in connection with the Chiesi Agreements including compensation for research and development obligations with respect to Elfabrio. As a result of the completion of the Fabry clinical program in 2023 with the approval of Elfabrio in the United States and the European Union in May 2023, we expect to generate minimal revenues from license and R&D services other than potential regulatory milestone payments.

Previous wording

Cost of goods sold was $9.5 million for the three months ended June 30, 2024, an increase of $3.4 million, or 56%, from cost of goods sold of $6.1 million for the three months ended June 30, 2023. The increase in cost of goods sold was primarily the result of an increase in sales to Pfizer and to Brazil. In addition, during the three months ended June 30, 2023 a significantly higher portion of the costs for certain drug substance sold, as compared to the three months ended June 30, 2024, were recognized as research and development expenses, not cost of goods sold, as such drug substance was produced as part of our research and development activities.

Current wording

Cost of goods sold was $8.4 million for the three months ended September 30, 2024, an increase of $3.5 million, or 71%, from cost of goods sold of $4.9 million for the three months ended September 30, 2023. The increase in cost of goods sold was primarily the result of an increase in sales to Chiesi and Pfizer.

Previous wording

For the three months ended June 30, 2024, our total research and development expenses were approximately $3.0 million comprised of approximately $0.5 million in subcontractor-related expenses, approximately $1.6 million of salary and related expenses, approximately $0.2 million of materials-related expenses and approximately $0.7 million of other expenses. For the three months ended June 30, 2023, our total research and development expenses were approximately $4.5 million comprised of approximately $1.7 million of subcontractor-related expenses, approximately $2.0 million of salary and related expenses, approximately $0.1 million of materials-related expenses and approximately $0.7 million of other expenses.

Current wording

For the three months ended September 30, 2024, our total research and development expenses were approximately $3.0 million comprised of approximately $0.6 million in subcontractor-related expenses, approximately $1.6 million of salary and related expenses, approximately $0.2 million of materials-related expenses and approximately $0.6 million of other expenses. For the three months ended September 30, 2023, our total research and development expenses were approximately $3.7 million comprised of approximately $1.0 million of subcontractor-related expenses, approximately $1.9 million of salary and related expenses, approximately $0.2 million of materials-related expenses and approximately $0.6 million of other expenses.

Previous wording

Total decrease in research and developments expenses for the three months ended June 30, 2024 was $1.5 million, or 33%, compared to the three months ended June 30, 2023. The decrease in research and development expenses resulted primarily from the completion of our Fabry clinical program and the regulatory processes related to the BLA and MAA review of Elfabrio by the applicable regulatory agencies.

Current wording

Total decrease in research and developments expenses for the three months ended September 30, 2024 was $0.7 million, or 19%, compared to the three months ended September 30, 2023. The decrease in research and development expenses resulted primarily from the completion of our Fabry clinical program and the regulatory processes related to the BLA and MAA review of Elfabrio by the applicable regulatory agencies.

Previous wording

Selling, general and administrative expenses were $3.5 million for the three months ended June 30, 2024, a decrease of $0.5 million, or 13%, compared to $4.0 million for the three months ended June 30, 2023. The decrease resulted primarily from a decrease of $0.5 million in salary and related expenses.

Current wording

Selling, general and administrative expenses were $2.6 million for the three months ended September 30, 2024, a decrease of $1.1 million, or 30%, compared to $3.7 million for the three months ended September 30, 2023. The decrease resulted primarily from a decrease of $0.5 million in salary and related expenses and a decrease of $0.4 million in professional fees.

Previous wording

Financial income, net were $0.2 million for the three months ended June 30, 2024, compared to financial expenses, net of $0.8 million for the three months ended June 30, 2023. The difference resulted primarily from higher interest income on bank deposits and lower notes interest expenses due to notes conversions executed in 2023.

Current wording

Financial expenses, net was $0.1 million for the three months ended September 30, 2024, compared to financial income, net of $0.2 million for the three months ended September 30, 2023. The difference resulted primarily from lower interest income on bank deposits, higher exchange rate costs partially offset by lower notes interest expenses due to the September 2024 repayment in full of all the outstanding principal and interest payable under the 2024 Notes.

Previous wording

For the three months ended June 30, 2024, we recorded a tax benefit of approximately $0.1 million, compared to income taxes of $0.3 million for the three months ended June 30, 2023. Income taxes recorded are primarily the result of the provision for current taxes in respect of Section 174 of the TCJA.

Current wording

For the three months ended September 30, 2024, we recorded income taxes of approximately $0.6 million, compared to income taxes of $0.1 million for the three months ended September 30, 2023. Income taxes recorded are primarily the result of tax expenses in respect of Section 174 of the TCJA.

Previous wording

We recorded revenues from selling goods of $17.0 million during the six months ended June 30, 2024, a decrease of $3.1 million, or 15%, compared to revenues of $20.1 million for the six months ended June 30, 2023. The decrease resulted primarily from a decrease of $10.0 million in sales to Chiesi which were partially offset by an increase in sales of $4.5 million to Brazil and of $2.4 million to Pfizer. Sales to Chiesi in the six months ended June 30, 2023 were in connection with the commercial launch and inventory buildup of Elfabrio after its approval for marketing in the United States and the European Union. The increases in sales to Brazil and Pfizer during the six months ended June 30, 2024 resulted primarily from the timing of delivery.

Current wording

We recorded revenues from selling goods of $34.8 million during the nine months ended September 30, 2024, an increase of $4.5 million, or 15%, compared to revenues of $30.3 million for the nine months ended September 30, 2023. The increase resulted primarily from an increase of $4.2 million in sales to Brazil and an increase of $3.4 million in sales to Pfizer which were partially offset by a decrease of $3.1 million in sales to Chiesi. Sales to Chiesi in the nine months ended September 30, 2023 were in connection with the commercial launch and inventory buildup of Elfabrio after its approval for marketing in the United States and the European Union.

Previous wording

We recorded revenues from license and R&D services of $0.2 million for the six months ended June 30, 2024, a decrease of $24.3 million, or 99%, compared to revenues of $24.5 million for the six months ended June 30, 2023. Revenues from license and R&D services are comprised primarily of revenues we recognized in connection with the Chiesi Agreements. The revenues from license and R&D services for the six months ended June 30, 2023 includedthe $20.0 million regulatory milestone payment from Chiesi in connection with the FDA approval of Elfabrio granted during that period. The remaining decrease resulted from the completion of our revenue-generating research and development obligations with respect to Elfabrio and, as Elfabrio was approved in the United States and the European Union in May 2023, from the completion of the regulatory processes related to the review of the BLA and the MAA for Elfabrio by the FDA and EMA, respectively.

Current wording

We recorded revenues from license and R&D services of $0.4 million for the nine months ended September 30, 2024, a decrease of $24.3 million, or 98%, compared to revenues of $24.7 million for the nine months ended September 30, 2023. Revenues from license and R&D services are comprised primarily of revenues we recognized in connection with the Chiesi Agreements. The revenues from license and R&D services for the nine months ended September 30, 2023 includedthe $20.0 million regulatory milestone payment from Chiesi in connection with the FDA approval of Elfabrio granted during that period. The remaining decrease resulted from the completion of our revenue-generating research and development obligations with respect to Elfabrio and, as Elfabrio was approved in the United States and the European Union in May 2023, from the completion of the regulatory processes related to the review of the BLA and the MAA for Elfabrio by the FDA and EMA, respectively. As a result of the completion of the Fabry clinical program in 2023, we expect to generate minimal revenues from license and R&D services other than potential regulatory milestone payments.

Previous wording

Cost of goods sold was $12.1 million for the six months ended June 30, 2024, an increase of $2.9 million, or 32%, from cost of goods sold of $9.2 million for the six months ended June 30, 2023. The increase in cost of goods sold was primarily the result of the increase in sales to Pfizer and to Brazil. In addition, during the six months ended June 30, 2023 a significantly higher portion of the costs for certain drug substance sold, as compared to the six months ended June 30, 2024, were recognized as research and development expenses, not cost of goods sold, as such drug substance was produced as part of our research and development activities.

Current wording

Cost of goods sold was $20.4 million for the nine months ended September 30, 2024, an increase of $6.3 million, or 45%, from cost of goods sold of $14.1 million for the nine months ended September 30, 2023. The increase in cost of goods sold was primarily the result of the increase in sales to Pfizer and to Brazil. In addition, during the nine months ended September 30, 2023 a significantly higher portion of the costs for certain drug substance sold, as compared to the nine months ended September 30, 2024, were recognized as research and development expenses, not cost of goods sold, as such drug substance was produced as part of our research and development activities.

Previous wording

For the six months ended June 30, 2024, our total research and development expenses were approximately $5.8 million comprised of approximately $1.0 million in subcontractor-related expenses, approximately $3.2 million of salary and related expenses, approximately $0.3 million of materials-related expenses and approximately $1.3 million of other expenses. For the six months ended June 30, 2023, our total research and development expenses were approximately $10.3 million comprised of approximately $5.2 million of subcontractor-related expenses, approximately $3.6 million of salary and related expenses, approximately $0.3 million of materials-related expenses and approximately $1.2 million of other expenses.

Current wording

For the nine months ended September 30, 2024, our total research and development expenses were approximately $8.8 million comprised of approximately $1.6 million in subcontractor-related expenses, approximately $4.8 million of salary and related expenses, approximately $0.5 million of materials-related expenses and approximately $1.9 million of other expenses. For the nine months ended September 30, 2023, our total research and development expenses were approximately $14.0 million comprised of approximately $6.2 million of subcontractor-related expenses, approximately $5.5 million of salary and related expenses, approximately $0.5 million of materials-related expenses and approximately $1.8 million of other expenses.

Previous wording

Total decrease in research and developments expenses for the six months ended June 30, 2024 was $4.5 million, or 44%, compared to the six months ended June 30, 2023. The decrease in research and development expenses resulted primarily from the completion of our Fabry clinical program and the regulatory processes related to the BLA and MAA review of Elfabrio by the applicable regulatory agencies.

Current wording

Total decrease in research and developments expenses for the nine months ended September 30, 2024 was $5.2 million, or 37%, compared to the nine months ended September 30, 2023. The decrease in research and development expenses resulted primarily from the completion of our Fabry clinical program and the regulatory processes related to the BLA and MAA review of Elfabrio by the applicable regulatory agencies.

Previous wording

Financial income, net were $0.3 million for the six months ended June 30, 2024, compared to financial expenses, net of $1.3 million for the six months ended June 30, 2023. The difference resulted primarily from higher interest income on bank deposits and lower notes interest expenses due to notes conversions executed in 2023.

Current wording

Financial income, net was $0.1 million for the nine months ended September 30, 2024, compared to financial expenses, net of $1.1 million for the nine months ended September 30, 2023. The difference resulted primarily from a decrease of approximately $1.1 million in lower interest expenses due to the note conversions executed in 2023 and the September 2024 repayment in full of all the outstanding principal and interest payable under the 2024 Notes.