Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Entity File Number | 001-33357 | |
Entity Registrant Name | PROTALIX BIOTHERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 65-0643773 | |
Entity Address, Address Line One | 2 University Plaza | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Hackensack | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07601 | |
City Area Code | 201 | |
Local Phone Number | 696-9345 | |
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | PLX | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 72,952,124 | |
Entity Central Index Key | 0001006281 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 20,408 | $ 17,111 |
Short-term bank deposits | 20,567 | 5,069 |
Accounts receivable - Trade | 8,935 | 4,586 |
Other assets | 1,125 | 1,310 |
Inventories | 21,583 | 16,804 |
Total current assets | 72,618 | 44,880 |
NON-CURRENT ASSETS: | ||
Funds in respect of employee rights upon retirement | 1,260 | 1,267 |
Property and equipment, net | 4,684 | 4,553 |
Deferred income tax asset | 3,092 | |
Operating lease right of use assets | 5,915 | 5,087 |
Total assets | 87,569 | 55,787 |
Accounts payable and accruals: | ||
Trade | 3,114 | 5,862 |
Other | 18,740 | 12,271 |
Operating lease liabilities | 1,313 | 1,118 |
Contracts liability | 13,178 | |
Convertible notes | 20,192 | |
Total current liabilities | 43,359 | 32,429 |
LONG TERM LIABILITIES: | ||
Convertible notes | 28,187 | |
Liability for employee rights upon retirement | 1,461 | 1,642 |
Operating lease liabilities | 4,502 | 4,169 |
Total long term liabilities | 5,963 | 33,998 |
Total liabilities | 49,322 | 66,427 |
COMMITMENTS | ||
STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY) | 38,247 | (10,640) |
Total liabilities and stockholders' equity (net of capital deficiency) | $ 87,569 | $ 55,787 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
TOTAL REVENUE | $ 10,345 | $ 14,183 | $ 55,008 | $ 39,021 | |
COST OF GOODS SOLD | [1] | (4,893) | (7,074) | (14,126) | (17,195) |
RESEARCH AND DEVELOPMENT EXPENSES | [2] | (3,669) | (7,386) | (13,991) | (23,732) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | [3] | (3,670) | (2,848) | (10,816) | (8,613) |
OPERATING INCOME (LOSS) | (1,887) | (3,125) | 16,075 | (10,519) | |
FINANCIAL EXPENSES | (460) | (639) | (2,406) | (1,879) | |
FINANCIAL INCOME | 628 | 197 | 1,323 | 1,211 | |
FINANCIAL INCOME (EXPENSES), NET | 168 | (442) | (1,083) | (668) | |
INCOME (LOSS) BEFORE TAXES ON INCOME | (1,719) | (3,567) | 14,992 | (11,187) | |
TAXES ON INCOME | (133) | (636) | |||
NET INCOME (LOSS) FOR THE PERIOD | $ (1,852) | $ (3,567) | $ 14,356 | $ (11,187) | |
EARNINGS (LOSS) PER SHARE OF COMMON STOCK - BASIC | $ (0.03) | $ (0.07) | $ 0.22 | $ (0.24) | |
EARNINGS (LOSS) PER SHARE OF COMMON STOCK - DILUTED | $ (0.04) | $ (0.07) | $ 0.16 | $ (0.24) | |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING EARNINGS (LOSS) PER SHARE- BASIC | 72,281,681 | 49,498,105 | 65,811,506 | 47,582,733 | |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING EARNINGS (LOSS) PER SHARE- DILUTED | 83,782,679 | 49,498,105 | 81,040,281 | 47,582,733 | |
Goods | |||||
TOTAL REVENUE | $ 10,168 | $ 8,812 | $ 30,309 | $ 21,222 | |
License and R&D Services | |||||
TOTAL REVENUE | $ 177 | $ 5,371 | $ 24,699 | $ 17,799 | |
[1] (1) Includes share-based compensation (2) Includes share-based compensation (3) Includes share-based compensation |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cost of goods sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | $ 195 | $ 36 | $ 299 | $ 58 |
Research and development expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | 182 | 114 | 506 | 275 |
Selling, general and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation | $ 720 | $ 272 | $ 1,276 | $ 1,213 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total | |
Beginning balance at Dec. 31, 2021 | $ 46 | $ 368,852 | $ (374,934) | $ (6,036) | |
Beginning balance (in shares) at Dec. 31, 2021 | [1] | 45,556,647 | |||
Issuance of common stock under the Sales Agreement, net | $ 4 | 4,157 | 4,161 | ||
Issuance of common stock under the Sales Agreement, net (in shares) | [1] | 3,841,479 | |||
Share-based compensation related to stock options | 592 | 592 | |||
Share-based compensation related to restricted stock awards | 954 | 954 | |||
Share-based compensation related to restricted stock awards (in shares) | [1] | 759,482 | |||
Exercise of warrants | 2 | 2 | |||
Exercise of warrants (in shares) | [1] | 1,000 | |||
Net income (loss) for the period | (11,187) | (11,187) | |||
Ending balance at Sep. 30, 2022 | $ 50 | 374,557 | (386,121) | (11,514) | |
Ending balance (in shares) at Sep. 30, 2022 | [1] | 50,158,608 | |||
Beginning balance at Jun. 30, 2022 | $ 49 | 372,616 | (382,554) | (9,889) | |
Beginning balance (in shares) at Jun. 30, 2022 | [1] | 48,712,952 | |||
Issuance of common stock under the Sales Agreement, net | $ 1 | 1,519 | 1,520 | ||
Issuance of common stock under the Sales Agreement, net (in shares) | [1] | 1,445,656 | |||
Share-based compensation related to stock options | 298 | 298 | |||
Share-based compensation related to restricted stock awards | 124 | 124 | |||
Net income (loss) for the period | (3,567) | (3,567) | |||
Ending balance at Sep. 30, 2022 | $ 50 | 374,557 | (386,121) | (11,514) | |
Ending balance (in shares) at Sep. 30, 2022 | [1] | 50,158,608 | |||
Beginning balance at Dec. 31, 2022 | $ 54 | 379,167 | (389,861) | (10,640) | |
Beginning balance (in shares) at Dec. 31, 2022 | [1] | 53,790,167 | |||
Issuance of common stock under the Sales Agreement, net | $ 13 | 23,941 | 23,954 | ||
Issuance of common stock under the Sales Agreement, net (in shares) | [1] | 12,560,150 | |||
Convertible notes conversions | $ 5 | 7,778 | 7,783 | ||
Convertible notes conversions (in shares) | [1] | 4,691,623 | |||
Share-based compensation related to stock options | 1,195 | 1,195 | |||
Share-based compensation related to restricted stock awards | $ 1 | 886 | 887 | ||
Share-based compensation related to restricted stock awards (in shares) | [1] | 1,371,362 | |||
Exercise of warrants | 712 | 712 | |||
Exercise of warrants (in shares) | [1] | 538,822 | |||
Net income (loss) for the period | 14,356 | 14,356 | |||
Ending balance at Sep. 30, 2023 | $ 73 | 413,679 | (375,505) | 38,247 | |
Ending balance (in shares) at Sep. 30, 2023 | [1] | 72,952,124 | |||
Beginning balance at Jun. 30, 2023 | $ 72 | 412,582 | (373,653) | 39,001 | |
Beginning balance (in shares) at Jun. 30, 2023 | [1] | 71,580,762 | |||
Share-based compensation related to stock options | 383 | 383 | |||
Share-based compensation related to restricted stock awards | $ 1 | 714 | $ 715 | ||
Share-based compensation related to restricted stock awards (in shares) | [1] | 1,371,362 | |||
Exercise of warrants (in shares) | 0 | ||||
Net income (loss) for the period | (1,852) | $ (1,852) | |||
Ending balance at Sep. 30, 2023 | $ 73 | $ 413,679 | $ (375,505) | $ 38,247 | |
Ending balance (in shares) at Sep. 30, 2023 | [1] | 72,952,124 | |||
[1]Common stock, $0.001 par value; Authorized – as of September 30, 2023 and December 31, 2022 – 185,000,000 and 144,000,000 shares, respectively. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY) (Parenthetical) - $ / shares | Sep. 30, 2023 | Jul. 25, 2023 | Jul. 24, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (CAPITAL DEFICIENCY) | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||
Common Stock, Shares Authorized | 185,000,000 | 185,000,000 | 144,000,000 | 144,000,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 14,356 | $ (11,187) |
Adjustments required to reconcile net income (loss) to net cash used in operating activities: | ||
Share-based compensation | 2,081 | 1,546 |
Depreciation | 878 | 811 |
Financial income, net (mainly exchange differences) | (511) | (1,083) |
Changes in accrued liability for employee rights upon retirement | (50) | (391) |
Changes in deferred tax asset | (3,092) | |
Loss (gain) on amounts funded in respect of employee rights upon retirement | (49) | 6 |
Gain on conversions of convertible notes | (421) | |
Amortization of debt issuance costs and debt discount | 208 | 224 |
Changes in operating assets and liabilities: | ||
Decrease in contracts liability | (13,178) | (5,547) |
Increase in accounts receivable-trade and other assets | (4,188) | (5,692) |
Changes in operating lease right of use assets, net | 12 | (30) |
Decrease (increase) in inventories | (4,779) | 3,392 |
Increase (decrease) in accounts payable and accruals | 3,820 | (4,438) |
Net cash used in operating activities | (4,913) | (22,389) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Investment in bank deposits | (20,420) | (16,000) |
Proceeds from sale of short-term deposits | 5,000 | 6,000 |
Purchase of property and equipment | (899) | (415) |
Amounts paid (funded) in respect of employee rights upon retirement, net | (50) | 427 |
Net cash used in investing activities | (16,369) | (9,988) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock under the Sales Agreement, net | 23,954 | 4,161 |
Exercise of warrants | 712 | 2 |
Net cash provided by financing activities | 24,666 | 4,163 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (87) | (51) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,297 | (28,265) |
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 17,111 | 38,985 |
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | 20,408 | 10,720 |
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||
Purchase of property and equipment | 253 | 205 |
Operating lease right of use assets obtained in exchange for new operating lease liabilities | 1,395 | 396 |
Convertible notes conversions | 7,783 | |
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS | ||
Interest paid | 2,743 | 2,198 |
Interest received | $ 303 | $ 136 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES a. General Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”) and its wholly-owned subsidiaries, Protalix Ltd. and Protalix B.V. (collectively, the “Subsidiaries”), are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company’s proprietary ProCellEx ® ® ® The Company’s 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, the Company has a number of product candidates in varying stages of the clinical development process. On May 5, 2023, the European Commission (“EC”) announced that it had approved the Marketing Authorization Application (“MAA”) for Elfabrio and on May 9, 2023, the U.S. Food and Drug Administration (“FDA”) announced that it had approved the Biologics License Application (“BLA”) for Elfabrio, each for adult patients with Fabry disease. Both approvals cover the 1 mg/kg every two weeks dosage. The European Medicines Agency (“EMA”) approval followed the February 2023 adoption of a positive opinion and recommendation of marketing authorization for Elfabrio by the EMA’s Committee for Medicinal Products for Human Use the (“CHMP”). Elfabrio was approved by the FDA with a boxed warning for hypersensitivity reactions/anaphylaxis, consistent with Enzyme Replacement Therapy (ERT) class labeling, and Warnings/Precautions providing guidance on the signs and symptoms of hypersensitivity and infusion-associated reactions seen in the clinical studies as well as treatments to manage such events should they occur. The Warnings/Precautions for membranoproliferative glomerulonephritis (MPGN) alert prescribers to the possibility of MPGN and provide guidance for appropriate patient management. Overall, the FDA review team concluded that in the context of Fabry disease as a rare, serious disease with limited therapeutic options that may not be suitable to all individual patients, the benefit-risk of Elfabrio is favorable for the treatment of adults with confirmed Fabry disease. In August and September of 2023, Elfabrio was approved in Great Britain and Switzerland, respectively, for long-term enzyme replacement therapy in adult patients with a confirmed diagnosis of Fabry disease. The Company has entered into two exclusive global licensing and supply agreements for Elfabrio with its development and commercialization partner for PRX-102, Chiesi Farmaceutici S.p.A. (“Chiesi”). On October 19, 2017, Protalix Ltd., the Company’s wholly-owned subsidiary, entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi Ex-US Agreement”), pursuant to which Chiesi was granted an exclusive license for all markets outside of the United States to commercialize Elfabrio. On July 23, 2018, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the Chiesi US Agreement, with respect to the commercialization of Elfabrio in the United States. Elfabrio, an enzyme replacement therapy, or ERT, 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, which are referred to as the BALANCE BRIDGE BRIGHT participants withdraw from the open-label extension studies. Some of the withdrawals The BLA for Elfabrio for the treatment of adult patients with Fabry disease was resubmitted to the FDA on November 9, 2022. 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 Complete Response Letter (“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. The FDA publicly released the internal review documents for Elfabrio (pegunigalsidase alfa-iwxj) injection BLA 761161. These documents provide previously unavailable additional information regarding the basis for the FDA’s May 2023 approval decision. In particular, the FDA determined that substantial evidence of effectiveness for Elfabrio in Fabry patients was established with one adequate and well-controlled study (Study PB-102-F01/02) with confirmatory evidence provided by the BALANCE BALANCE BALANCE The Company has licensed the rights to commercialize taliglucerase alfa worldwide (other than Brazil) to Pfizer Inc. (“Pfizer”), and in Brazil to Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”). Otherwise, except with respect to taliglucerase alfa and Elfabrio, the Company holds the worldwide commercialization rights to its other proprietary development candidates. In addition, the Company continuously evaluates potential strategic marketing partnerships as well as collaboration programs with biotechnology and pharmaceutical companies and academic research institutions. The Company’s product pipeline currently includes, among other candidates: (1) (2) On March 21, 2023, the first patient was dosed in the Company’s phase I First-in-Human (“FIH”) clinical trial of PRX-115. As of September 30, 2023, 32 patients have been dosed in this trial. Obtaining marketing approval with respect to any product candidate in any country is dependent on the Company’s ability to implement the necessary regulatory steps required to obtain such approvals, and demonstrate the safety and efficacy of its product candidates. The Company cannot reasonably predict the outcome of these activities. On July 2, 2021, the Company entered into an At The Market Offering Agreement (the “2021 Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”) which was amended on May 2, 2022. Pursuant to the terms of the 2021 Sales Agreement, the Company was able to sell, from time to time through the Agent, shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $20.0 million (the “ATM Shares”). Upon execution of the 2021 Sales Agreement, the Company terminated the ATM Equity Offering SM During the term of the 2021 Sales Agreement which ended during the quarter ended March 31, 2023, the Company sold a total of 13,980,060 ATM Shares for total gross proceeds of approximately $20.0 million under the 2021 Sales Agreement, thereby completing the ATM program under said agreement. On February 27, 2023, the Company entered into an At The Market Offering Agreement (the “2023 Sales Agreement”) with the Agent. Pursuant to the terms of the 2023 Sales Agreement, the Company may sell, from time to time through the Agent, ATM Shares having an aggregate offering price of up to $20.0 million. As of September 30, 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 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. 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. Under the Chiesi US Agreement, Protalix Ltd. is entitled to payments of up to a maximum of $20.0 million to cover development costs for pegunigalsidase alfa and to receive additional payments of up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments. 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, the Company received a milestone payment equal to $20.0 million. 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 consideration for Protalix Ltd. is based on the drug product supplied to Chiesi and the average selling price of the drug product in the relevant territory multiplied by tiered payments as described in the relevant agreement. Under the Chiesi Ex-US Agreement, Chiesi is required to make tiered payments for drug product purchased from Protalix of 15% to 35%, depending on the amount of annual net sales outside of the United States, and under the Chiesi US Agreement, Chiesi is required to make tiered payments for drug product purchased from Protalix of 15% to 40%, depending on the amount of annual net sales in the United States. On August 29, 2022, the Company entered into a Fill/Finish Agreement (the “F/F Agreement”) and a Letter Agreement (the “Letter Agreement”), in each case with Chiesi. The Company 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 the Company with commercial fill/finish services for PRX-102, including to support the anticipated global launch of PRX-102. The F/F Agreement shall continue in force until December 31, 2025, unless terminated earlier in accordance with the terms of the F/F Agreement and the term may be extended by mutual agreement for an additional period of seven years upon mutual written agreement prior to expiration of the initial term. On May 13, 2021, the Company signed a binding term sheet with Chiesi pursuant to which the Company and Chiesi amended the Chiesi Agreements in order to provide the Company with near-term capital. Chiesi agreed to make a $10.0 million payment to the Company 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. The Company received the payment in June 2021. The Company also agreed to negotiate certain manufacturing related matters. Since its approval by the FDA, taliglucerase alfa has been marketed by Pfizer in accordance with the exclusive license and supply agreement entered into between Protalix Ltd. and Pfizer, which is referred to herein as the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into an amended exclusive license and supply agreement, which is referred to herein as the Amended Pfizer Agreement, pursuant to which the Company sold to Pfizer its share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso. As part of the sale, the Company agreed to transfer its rights to Elelyso in Israel to Pfizer while gaining full rights to it in Brazil. 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 the Company is responsible for all expenses and retains all revenues. On June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement with Fiocruz (the “Brazil Agreement”) for taliglucerase alfa. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed-upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil. The Company expects to continue to incur significant expenditures in the near future due to research and developments efforts with respect to the product candidates. Under the terms of the Company’s outstanding 7.50% Senior Secured Convertible Notes due 2024 (the “2024 Notes”) , compliance with all such covenants. b. Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2022, filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). The comparative balance sheet at December 31, 2022 has been derived from the audited financial statements at that date. There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the year ended December 31, 2022. c. Revenue recognition The Company accounts for revenue pursuant to Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, a contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer. 1. Revenues from selling products The Company recognizes revenues from selling goods at a point in time when control over the product is transferred to customers (upon delivery), at the net selling price, which reflects reserves for variable consideration, potential discounts and allowances. The transaction price is the consideration to which the Company expects to be entitled from the customer. The consideration promised in a contract with the Company’s customers may include fixed amounts and variable amounts. The Company estimates the variable consideration and includes it in the transaction price using the most likely outcome method, and only to the extent it is highly probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. 2. Revenues from Chiesi Agreements The Company has identified two performance obligations in the Chiesi Agreements as follows: (i) the license and research and development services and (ii) the contingent performance obligation regarding future manufacturing. The Company determined that the license together with the research and development services should be combined into single performance obligation since Chiesi cannot benefit from the license without the research and development services. The research and development services are highly specialized and are dependent on the supply of the drug. The manufacturing was contingent on regulatory approvals of the drug and the Company deems 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, research and development services. Following the regulatory approvals for Elfabrio received in May 2023, the Company started recognizing revenue from manufacturing, see also revenue from selling products above. The transaction price was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which the Company 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 Company estimates variable consideration using the most likely method. Amounts included in the transaction price are recognized only when it is probable that a significant reversal of cumulative revenues will not occur. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. Following the approval of Elfabrio by the FDA, the Company received a milestone payment equal to $20.0 million (see also note 4). 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 was recognized over time using the cost-to-cost method. Revenue from additional research and development services ordered by Chiesi is recognized over time using the cost-to-cost method. 3. Revenue from R&D services Revenue from the research and development services was recognized over time using the cost-to-cost method since the customer benefits from the research and development services as the entity performs the services. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 2 - INVENTORIES Inventories at September 30, 2023 and December 31, 2022 consisted of the following: September 30, December 31, ( U.S. dollars in thousands) 2023 2022 Raw materials $ 4,198 $ 3,508 Work in progress 9,116 2,678 Finished goods 8,269 10,618 Total inventory $ 21,583 $ 16,804 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | NOTE 3 – FAIR VALUE MEASUREMENT The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received from the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The fair value of the financial instruments included in the working capital of the Company is usually identical or close to their carrying value. Based on a Level 3 measurement, as of September 30, 2023, the fair value of the $20.4 million aggregate principal amount of the Company’s outstanding 2024 Notes is approximately $24.5 million. The value of these notes was estimated by implementing the binomial model. The liability component was valued based on the Income Approach. The following parameters were used: 2024 Notes Stock price (USD) 1.66 Expected term 0.93 Risk free rate 5.34 % Volatility 62.84 % Yield 12.49 % |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2023 | |
REVENUES | |
REVENUES | NOTE 4 – REVENUES The following table summarizes the Company’s disaggregation of revenues: Three Months Ended September 30, Nine Months Ended September 30, ( U.S. dollars in thousands) 2023 2022 2023 2022 Pfizer $ 2,304 $ 4,541 $ 7,972 $ 11,279 Brazil $ 2,320 $ 1,708 $ 5,120 $ 7,162 Chiesi $ 5,544 $ 2,563 $ 17,217 $ 2,781 Total revenues from selling goods $ 10,168 $ 8,812 $ 30,309 $ 21,222 Revenues from license and R&D services $ 177 $ 5,371 $ 24,699 $ 17,799 |
STOCK TRANSACTIONS
STOCK TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
STOCK TRANSACTIONS | |
STOCK TRANSACTIONS | NOTE 5 – STOCK TRANSACTIONS (a) Authorized Capital On June 28, 2023, the Company held its 2023 Annual Meeting of Stockholders, which was adjourned and reconvened on July 13, 2023 (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders, among other matters, approved an amendment to the Company’s Certificate of Incorporation, as amended, to increase the number of shares of Common Stock authorized for issuance from 144,000,000 to 185,000,000 (the “Charter Amendment”). The Charter Amendment was filed with the Secretary of State of the State of Delaware on July 25, 2023. (b) At-the-Market (ATM) Offering During the nine months ended September 30, 2023, the Company sold, in the aggregate, 12,560,150 shares of Common Stock under the 2023 Sales Agreement. The Company generated aggregate gross proceeds equal to approximately $24.9 million in connection with such sales. All such sales were completed during the quarters ended March 31, 2023 and June 30, 2023. No sales were completed during the three-months ended September 30, 2023. (c) Exercise of Warrants On May 8, 2023, the Company issued 301,810 shares of Common Stock in connection with the cash exercise of a warrant issued on March 18, 2020, as part of the Company’s private placement of Common Stock and warrants. The Company generated net proceeds equal to $0.7 million from the exercise of the warrant. On May 10, 2023, the Company issued 237,012 shares of Common Stock in connection with the cashless exercise of a warrant to purchase 845,000 shares of Common Stock issued on March 18, 2020, as part of the Company’s private placement of Common Stock and warrants. The Company did not generate any proceeds from the cashless exercise. No warrants were exercised during the three months ended September 30, 2023. (d) Conversion of 2024 Notes During the nine months ended September 30, 2023, the Company issued, in the aggregate, 4,691,623 shares of Common Stock in connection with the conversions of 2024 Notes. In connection with such conversions, during the nine months ended September 30, 2023, the Company paid to the converting holders $0.9 million representing cash payments due to accrued but unpaid interest, make-whole interest payments and payments in lieu of fractional shares. As a result of the conversions, the total principal amount of the 2024 Notes decreased by approximately $8.3 million. No 2024 Notes were converted during the three months ended September 30, 2023. (e) Stock based compensation 1) On June 28, 2023, at the Annual Meeting, the Company’s stockholders, among other matters, adopted amendments to the Company’s Amended and Restated 2006 Employee Stock Incentive Plan, as amended (the “Plan”) to increase the number of shares of Common Stock available under Plan from 8,475,171 shares to 12,475,171 shares and to amend certain other terms of the Plan. 2) On August 15, 2023, the Company granted, with the approval of the Company’s compensation committee, 1,371,362 shares of restricted Common Stock, in the aggregate, to certain of the Company’s officers under the Plan. Of such grants, 200,000 shares of restricted Common Stock vested upon grant, 600,000 shares of restricted Common Stock vest over a two-year period in eight equal quarterly increments and the remaining 571,362 shares of restricted Common Stock vest over a three-year period in 12 equal quarterly increments. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $2.7 million. 3) On August 15, 2023, the Company granted, with the approval of the Company’s compensation committee, 10-year options to purchase 1,056,315 shares of Common Stock, in the aggregate, to certain of the Company’s officers and other employees under the Plan. The options have an exercise price equal to $1.99 per share and vest over a three-year period in 12 equal quarterly increments. Vesting of the options granted to executive officers is subject to automatic acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan, and are subject to certain other terms and conditions. The Company estimated the aggregate fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $1.5 million. On September 14, 2023, the Company granted, with the approval of the Company’s compensation committee, 10-year options to purchase 85,715 shares of Common Stock, in the aggregate, to the new Chairman of the Company’s Board of Directors under the Plan. The options have an exercise price equal to $1.75 per share and vest over a three-year period in 12 equal quarterly increments. Vesting of the options is subject to automatic acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan, and are subject to certain other terms and conditions. The Company estimated the aggregate fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $0.1 million. On September 29, 2023, the Company granted, with the approval of the Company’s compensation committee, 10-year options to purchase 308,380 shares of Common Stock, in the aggregate, to the non-executive directors of the Company’s Board of Directors, other than the Chairman, under the Plan. The options have an exercise price equal to $1.66 per share and vest over a three-year period in 12 equal quarterly increments. Vesting of the options is subject to automatic acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan, and are subject to certain other terms and conditions. The Company estimated the aggregate fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $0.4 million. The fair value of each option granted during the three-month period ended September 30, 2023 is estimated at the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were applied in determining the fair value of the options described in this Note 5(e)(3) on their respective grant dates: Weighted average grants date fair value (USD) 1.34 Exercise price (USD) 1.91 Risk free rate 4.40 % Volatility 79.40 % Dividend yield 0 % Expected life (Years) 5.75 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | NOTE 6 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of Common Stock outstanding during each period. Diluted earnings per share is calculated by dividing the net income by the weighted-average number of shares of Common Stock outstanding during each period increased to include the number of additional shares of Common Stock that would have been outstanding if the potentially dilutive shares had been issued. In computing diluted earnings per share, basic earnings per share are adjusted to take into account the potential dilution that could occur upon: (i) the exercise of options granted under employee stock compensation plans using the treasury stock method; (ii) the exercise of warrants using the treasury stock method; and (iii) the conversion of the convertible notes using the “if-converted” method. Basic and diluted net earnings (loss) per share attributable to common stockholders were calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except share data) 2023 2022 2023 2022 Numerator: Net income (loss) $ (1,852) $ (3,567) $ 14,356 $ (11,187) Add: Financial expenses of 2024 Notes* $ (1,766) — $ (1,610) — Net income (loss) for diluted calculation $ (3,618) $ (3,567) $ 12,746 $ (11,187) Denominator: Weighted average shares of Common Stock outstanding for basic calculation 72,281,681 49,498,105 65,811,506 47,582,733 Weighted average dilutive effect of 2024 Notes 11,500,998 — 13,981,660 — Weighted average dilutive effect of stock options — — 1,247,115 — Weighted average shares of Common Stock outstanding for diluted calculation 83,782,679 49,498,105 81,040,281 47,582,733 * Financial expenses on 2024 Notes consists of add back of financial expense incurred during the period and inclusion of make-whole interest payments that will be incurred upon conversion. Diluted earnings (loss) per share do not include 19,429,910 and 18,399,260 shares of Common Stock underlying outstanding stock options and warrants of the Company for the three and nine months ended September 30, 2023, respectively, because the effect would be anti-dilutive. Diluted earnings (loss) per share do not include 33,922,624 and 33,295,154 shares of Common Stock underlying outstanding stock options, warrants and the 2024 Notes for the three and nine months ended September 30, 2022, respectively, because the effect would be anti-dilutive. |
TAXES ON INCOME
TAXES ON INCOME | 9 Months Ended |
Sep. 30, 2023 | |
TAXES ON INCOME | |
TAXES ON INCOME | NOTE 7 – TAXES ON INCOME The following table summarizes the Company’s taxes on income: Three Months Ended Nine Months Ended (U.S. dollars in thousands) September 30, 2023 September 30, 2023 Current taxes on income $ 95 $ 3,728 Deferred taxes on income 38 (3,092) Total taxes on income $ 133 $ 636 The Company had an effective tax rate of 4% for the nine months ended September 30, 2023, compared to an effective tax rate of 0% for the nine months ended September 30, 2022. For the nine months ended September 30, 2023, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of the provision for current taxes on income mainly derived from U.S. taxable GILTI income mainly in respect of milestone payments and Section 174 of the U.S. Tax Cuts and Jobs Act, which was enacted in December 2017 (the “TCJA”), partially offset by the release of the valuation allowance on net operating losses (NOLs) in the United States. Following the regulatory approvals for Elfabrio in May 2023, the receipt of the $20.0 million milestone payment and the launch of Elfabrio in the United States, the Company released valuation allowance previously recorded on deferred tax assets in respect of its NOLs in the United States resulting in a net tax benefit of $3.1 million. The Company concluded that, based upon the preponderance of positive evidence over negative evidence and the anticipated ability to use the deferred tax assets, it was more likely than not that these deferred tax assets would be realizable due to forecasted profits. The Company considered the following: (i) cumulative profits for tax over the previous 12 quarters in its U.S. operations; (ii) the impact of Section 174 of the TCJA which requires the Company to capitalize and amortize its research and development expenses over 15 years; and (iii) its forecasted profits in the United States following the regulatory approvals of Elfabrio. |
SUPPLEMENTARY FINANCIAL STATEME
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | NOTE 8 – SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION Balance sheets: September 30, December 31, (U.S. dollars in thousands) 2023 2022 Accounts payable and accruals – other: Payroll and related expenses $ 1,239 $ 1,216 Interest Payable 123 719 Provision for vacation 1,471 1,404 Accrued expenses 9,249 7,478 Royalties payable 332 781 Income tax payable 3,257 530 Reserve for deductions from revenue 2,816 — Property and equipment suppliers 253 143 $ 18,740 $ 12,271 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS 1) On October 4, 2023 the Company collected approximately $6.4 million from sales to Chiesi . 2) On October 15, 2023, the Company granted, with the approval of the Company’s compensation committee, 10-year options to purchase 250,000 shares of Common Stock to a new officer of the Company under the Plan. The options have an exercise price equal to $1.48 per share and vest over a three-year period in 12 equal quarterly increments. The Company estimated the aggregate fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $0.26 million. 3) Because the Company's operations are conducted in the State of Israel, the business and operations may be directly affected by economic, political, geopolitical and military conditions in Israel. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel attacking a number of civilian and military targets while simultaneously launching extensive rocket attacks on the Israeli population and industrial centers. At the same time, clashes between Israel and Hezbollah in Lebanon have increased. In response, Israel’s security cabinet declared war against the Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Moreover, the attacks by Hamas and Hezbollah, and Israel’s defensive measures, may result in a greater regional conflict. It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial conditions. The ongoing conflict is rapidly evolving and developing, and could disrupt certain of our business and operations, among others. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
SIGNIFICANT ACCOUNTING POLICIES | |
General | a. General Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”) and its wholly-owned subsidiaries, Protalix Ltd. and Protalix B.V. (collectively, the “Subsidiaries”), are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company’s proprietary ProCellEx ® ® ® The Company’s 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, the Company has a number of product candidates in varying stages of the clinical development process. On May 5, 2023, the European Commission (“EC”) announced that it had approved the Marketing Authorization Application (“MAA”) for Elfabrio and on May 9, 2023, the U.S. Food and Drug Administration (“FDA”) announced that it had approved the Biologics License Application (“BLA”) for Elfabrio, each for adult patients with Fabry disease. Both approvals cover the 1 mg/kg every two weeks dosage. The European Medicines Agency (“EMA”) approval followed the February 2023 adoption of a positive opinion and recommendation of marketing authorization for Elfabrio by the EMA’s Committee for Medicinal Products for Human Use the (“CHMP”). Elfabrio was approved by the FDA with a boxed warning for hypersensitivity reactions/anaphylaxis, consistent with Enzyme Replacement Therapy (ERT) class labeling, and Warnings/Precautions providing guidance on the signs and symptoms of hypersensitivity and infusion-associated reactions seen in the clinical studies as well as treatments to manage such events should they occur. The Warnings/Precautions for membranoproliferative glomerulonephritis (MPGN) alert prescribers to the possibility of MPGN and provide guidance for appropriate patient management. Overall, the FDA review team concluded that in the context of Fabry disease as a rare, serious disease with limited therapeutic options that may not be suitable to all individual patients, the benefit-risk of Elfabrio is favorable for the treatment of adults with confirmed Fabry disease. In August and September of 2023, Elfabrio was approved in Great Britain and Switzerland, respectively, for long-term enzyme replacement therapy in adult patients with a confirmed diagnosis of Fabry disease. The Company has entered into two exclusive global licensing and supply agreements for Elfabrio with its development and commercialization partner for PRX-102, Chiesi Farmaceutici S.p.A. (“Chiesi”). On October 19, 2017, Protalix Ltd., the Company’s wholly-owned subsidiary, entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi Ex-US Agreement”), pursuant to which Chiesi was granted an exclusive license for all markets outside of the United States to commercialize Elfabrio. On July 23, 2018, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the Chiesi US Agreement, with respect to the commercialization of Elfabrio in the United States. Elfabrio, an enzyme replacement therapy, or ERT, 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, which are referred to as the BALANCE BRIDGE BRIGHT participants withdraw from the open-label extension studies. Some of the withdrawals The BLA for Elfabrio for the treatment of adult patients with Fabry disease was resubmitted to the FDA on November 9, 2022. 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 Complete Response Letter (“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. The FDA publicly released the internal review documents for Elfabrio (pegunigalsidase alfa-iwxj) injection BLA 761161. These documents provide previously unavailable additional information regarding the basis for the FDA’s May 2023 approval decision. In particular, the FDA determined that substantial evidence of effectiveness for Elfabrio in Fabry patients was established with one adequate and well-controlled study (Study PB-102-F01/02) with confirmatory evidence provided by the BALANCE BALANCE BALANCE The Company has licensed the rights to commercialize taliglucerase alfa worldwide (other than Brazil) to Pfizer Inc. (“Pfizer”), and in Brazil to Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”). Otherwise, except with respect to taliglucerase alfa and Elfabrio, the Company holds the worldwide commercialization rights to its other proprietary development candidates. In addition, the Company continuously evaluates potential strategic marketing partnerships as well as collaboration programs with biotechnology and pharmaceutical companies and academic research institutions. The Company’s product pipeline currently includes, among other candidates: (1) (2) On March 21, 2023, the first patient was dosed in the Company’s phase I First-in-Human (“FIH”) clinical trial of PRX-115. As of September 30, 2023, 32 patients have been dosed in this trial. Obtaining marketing approval with respect to any product candidate in any country is dependent on the Company’s ability to implement the necessary regulatory steps required to obtain such approvals, and demonstrate the safety and efficacy of its product candidates. The Company cannot reasonably predict the outcome of these activities. On July 2, 2021, the Company entered into an At The Market Offering Agreement (the “2021 Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”) which was amended on May 2, 2022. Pursuant to the terms of the 2021 Sales Agreement, the Company was able to sell, from time to time through the Agent, shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $20.0 million (the “ATM Shares”). Upon execution of the 2021 Sales Agreement, the Company terminated the ATM Equity Offering SM During the term of the 2021 Sales Agreement which ended during the quarter ended March 31, 2023, the Company sold a total of 13,980,060 ATM Shares for total gross proceeds of approximately $20.0 million under the 2021 Sales Agreement, thereby completing the ATM program under said agreement. On February 27, 2023, the Company entered into an At The Market Offering Agreement (the “2023 Sales Agreement”) with the Agent. Pursuant to the terms of the 2023 Sales Agreement, the Company may sell, from time to time through the Agent, ATM Shares having an aggregate offering price of up to $20.0 million. As of September 30, 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 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. 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. Under the Chiesi US Agreement, Protalix Ltd. is entitled to payments of up to a maximum of $20.0 million to cover development costs for pegunigalsidase alfa and to receive additional payments of up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments. 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, the Company received a milestone payment equal to $20.0 million. 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 consideration for Protalix Ltd. is based on the drug product supplied to Chiesi and the average selling price of the drug product in the relevant territory multiplied by tiered payments as described in the relevant agreement. Under the Chiesi Ex-US Agreement, Chiesi is required to make tiered payments for drug product purchased from Protalix of 15% to 35%, depending on the amount of annual net sales outside of the United States, and under the Chiesi US Agreement, Chiesi is required to make tiered payments for drug product purchased from Protalix of 15% to 40%, depending on the amount of annual net sales in the United States. On August 29, 2022, the Company entered into a Fill/Finish Agreement (the “F/F Agreement”) and a Letter Agreement (the “Letter Agreement”), in each case with Chiesi. The Company 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 the Company with commercial fill/finish services for PRX-102, including to support the anticipated global launch of PRX-102. The F/F Agreement shall continue in force until December 31, 2025, unless terminated earlier in accordance with the terms of the F/F Agreement and the term may be extended by mutual agreement for an additional period of seven years upon mutual written agreement prior to expiration of the initial term. On May 13, 2021, the Company signed a binding term sheet with Chiesi pursuant to which the Company and Chiesi amended the Chiesi Agreements in order to provide the Company with near-term capital. Chiesi agreed to make a $10.0 million payment to the Company 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. The Company received the payment in June 2021. The Company also agreed to negotiate certain manufacturing related matters. Since its approval by the FDA, taliglucerase alfa has been marketed by Pfizer in accordance with the exclusive license and supply agreement entered into between Protalix Ltd. and Pfizer, which is referred to herein as the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into an amended exclusive license and supply agreement, which is referred to herein as the Amended Pfizer Agreement, pursuant to which the Company sold to Pfizer its share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso. As part of the sale, the Company agreed to transfer its rights to Elelyso in Israel to Pfizer while gaining full rights to it in Brazil. 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 the Company is responsible for all expenses and retains all revenues. On June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement with Fiocruz (the “Brazil Agreement”) for taliglucerase alfa. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed-upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil. The Company expects to continue to incur significant expenditures in the near future due to research and developments efforts with respect to the product candidates. Under the terms of the Company’s outstanding 7.50% Senior Secured Convertible Notes due 2024 (the “2024 Notes”) , compliance with all such covenants. |
Basis of presentation | b. Basis of presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2022, filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). The comparative balance sheet at December 31, 2022 has been derived from the audited financial statements at that date. There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the year ended December 31, 2022. |
Revenue recognition | c. Revenue recognition The Company accounts for revenue pursuant to Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, a contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer. 1. Revenues from selling products The Company recognizes revenues from selling goods at a point in time when control over the product is transferred to customers (upon delivery), at the net selling price, which reflects reserves for variable consideration, potential discounts and allowances. The transaction price is the consideration to which the Company expects to be entitled from the customer. The consideration promised in a contract with the Company’s customers may include fixed amounts and variable amounts. The Company estimates the variable consideration and includes it in the transaction price using the most likely outcome method, and only to the extent it is highly probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. 2. Revenues from Chiesi Agreements The Company has identified two performance obligations in the Chiesi Agreements as follows: (i) the license and research and development services and (ii) the contingent performance obligation regarding future manufacturing. The Company determined that the license together with the research and development services should be combined into single performance obligation since Chiesi cannot benefit from the license without the research and development services. The research and development services are highly specialized and are dependent on the supply of the drug. The manufacturing was contingent on regulatory approvals of the drug and the Company deems 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, research and development services. Following the regulatory approvals for Elfabrio received in May 2023, the Company started recognizing revenue from manufacturing, see also revenue from selling products above. The transaction price was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which the Company 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 Company estimates variable consideration using the most likely method. Amounts included in the transaction price are recognized only when it is probable that a significant reversal of cumulative revenues will not occur. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. Following the approval of Elfabrio by the FDA, the Company received a milestone payment equal to $20.0 million (see also note 4). 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 was recognized over time using the cost-to-cost method. Revenue from additional research and development services ordered by Chiesi is recognized over time using the cost-to-cost method. 3. Revenue from R&D services Revenue from the research and development services was recognized over time using the cost-to-cost method since the customer benefits from the research and development services as the entity performs the services. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
Schedule of Inventory | September 30, December 31, ( U.S. dollars in thousands) 2023 2022 Raw materials $ 4,198 $ 3,508 Work in progress 9,116 2,678 Finished goods 8,269 10,618 Total inventory $ 21,583 $ 16,804 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
2024 Notes | |
Schedule of Fair Value Assumptions | 2024 Notes Stock price (USD) 1.66 Expected term 0.93 Risk free rate 5.34 % Volatility 62.84 % Yield 12.49 % |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
REVENUES | |
Schedule of Company's Disaggregation of Revenues | Three Months Ended September 30, Nine Months Ended September 30, ( U.S. dollars in thousands) 2023 2022 2023 2022 Pfizer $ 2,304 $ 4,541 $ 7,972 $ 11,279 Brazil $ 2,320 $ 1,708 $ 5,120 $ 7,162 Chiesi $ 5,544 $ 2,563 $ 17,217 $ 2,781 Total revenues from selling goods $ 10,168 $ 8,812 $ 30,309 $ 21,222 Revenues from license and R&D services $ 177 $ 5,371 $ 24,699 $ 17,799 |
STOCK TRANSACTIONS (Tables)
STOCK TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
STOCK TRANSACTIONS | |
Schedule of Stock Option Valuation Assumptions | Weighted average grants date fair value (USD) 1.34 Exercise price (USD) 1.91 Risk free rate 4.40 % Volatility 79.40 % Dividend yield 0 % Expected life (Years) 5.75 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS (LOSS) PER SHARE | |
Schedule of Basic and Diluted Net Earnings (Loss) Per Share | Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except share data) 2023 2022 2023 2022 Numerator: Net income (loss) $ (1,852) $ (3,567) $ 14,356 $ (11,187) Add: Financial expenses of 2024 Notes* $ (1,766) — $ (1,610) — Net income (loss) for diluted calculation $ (3,618) $ (3,567) $ 12,746 $ (11,187) Denominator: Weighted average shares of Common Stock outstanding for basic calculation 72,281,681 49,498,105 65,811,506 47,582,733 Weighted average dilutive effect of 2024 Notes 11,500,998 — 13,981,660 — Weighted average dilutive effect of stock options — — 1,247,115 — Weighted average shares of Common Stock outstanding for diluted calculation 83,782,679 49,498,105 81,040,281 47,582,733 * Financial expenses on 2024 Notes consists of add back of financial expense incurred during the period and inclusion of make-whole interest payments that will be incurred upon conversion. |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
TAXES ON INCOME | |
Schedule of components of Income Tax Expense (Benefit) | Three Months Ended Nine Months Ended (U.S. dollars in thousands) September 30, 2023 September 30, 2023 Current taxes on income $ 95 $ 3,728 Deferred taxes on income 38 (3,092) Total taxes on income $ 133 $ 636 |
SUPPLEMENTARY FINANCIAL STATE_2
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | |
Supplemental Information, Balance Sheets | September 30, December 31, (U.S. dollars in thousands) 2023 2022 Accounts payable and accruals – other: Payroll and related expenses $ 1,239 $ 1,216 Interest Payable 123 719 Provision for vacation 1,471 1,404 Accrued expenses 9,249 7,478 Royalties payable 332 781 Income tax payable 3,257 530 Reserve for deductions from revenue 2,816 — Property and equipment suppliers 253 143 $ 18,740 $ 12,271 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Feb. 27, 2023 USD ($) | Aug. 29, 2022 | Jul. 02, 2021 USD ($) $ / shares shares | May 13, 2021 USD ($) | Jul. 23, 2018 USD ($) | Oct. 19, 2017 USD ($) | Oct. 31, 2015 | Sep. 30, 2023 USD ($) agreement $ / shares shares | Mar. 31, 2023 USD ($) shares | Sep. 30, 2023 USD ($) agreement $ / shares shares | Sep. 30, 2022 USD ($) | Mar. 21, 2023 item | Dec. 31, 2022 $ / shares | |
Significant Accounting Policies [Line Items] | |||||||||||||
Number of global licensing and supply agreements | agreement | 2 | 2 | |||||||||||
Number of patients dosed | item | 32 | ||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Stock issuance proceeds | $ 23,954 | $ 4,161 | |||||||||||
Convertible Debt, Current | $ 20,192 | 20,192 | |||||||||||
ATM Shares | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Number of shares issued (in shares) | shares | 13,980,060 | ||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||||||||||
Sale of stock, maximum offering price | $ 20,000 | $ 20,000 | $ 6,400 | ||||||||||
Stock issuance proceeds | $ 20,000 | ||||||||||||
ATM Equity Offering Sales Agreement | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Number of shares issued (in shares) | shares | 3,296,123 | 0 | 12,560,150 | ||||||||||
Stock issuance proceeds | $ 13,800 | $ 24,900 | |||||||||||
2024 Notes | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Interest rate (as a percent) | 7.50% | 7.50% | |||||||||||
Maintain of Minimum Cash Balance | $ 7,500 | $ 7,500 | |||||||||||
Amended Pfizer Agreement | Protalix Bio Therapeutics Incorporation | Brazil | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Collaborative Arrangement Revenues and Expenses Sharing Percentage | 100% | ||||||||||||
Chiesi Agreements | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Amount of milestone payment received | $ 20,000 | ||||||||||||
Revenue, Performance Obligation, Number | agreement | 2 | 2 | |||||||||||
Chiesi US Agreement | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Additional Amounts Payable To Cover Development Costs | $ 20,000 | ||||||||||||
Additional Amount Payable For Achievement Of Regulatory And Commercial Milestones | $ 760,000 | ||||||||||||
Chiesi US Agreement | Minimum | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Payment On Net Sales Percentage | 15% | ||||||||||||
Chiesi US Agreement | Maximum | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Payment On Net Sales Percentage | 40% | ||||||||||||
Chiesi Ex-US Agreement | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Additional Amounts Payable To Cover Development Costs | $ 25,000 | ||||||||||||
Agreement Amendment Payment Receivable | $ 10,000 | ||||||||||||
Change In Amount Receivable For Achievement Of Regulatory And Commercial Milestones | $ 25,000 | ||||||||||||
Additional Amount Payable For Achievement Of Regulatory And Commercial Milestones | $ 320,000 | ||||||||||||
Chiesi Ex-US Agreement | Minimum | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Payment On Net Sales Percentage | 15% | ||||||||||||
Chiesi Ex-US Agreement | Maximum | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Payment On Net Sales Percentage | 35% | ||||||||||||
Fill/Finish Agreement | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Extended term of agreement | 7 years | ||||||||||||
Chiesi US Agreement and Chiesi Ex-US Agreement | |||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||
Non-refundable Payment Receivable | $ 25,000 | $ 25,000 |
INVENTORIES (Schedule of Invent
INVENTORIES (Schedule of Inventory) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Raw materials | $ 4,198 | $ 3,508 |
Work in progress | 9,116 | 2,678 |
Finished goods (drug substance and drug product) | 8,269 | 10,618 |
Total inventory | $ 21,583 | $ 16,804 |
FAIR VALUE MEASUREMENT (Schedul
FAIR VALUE MEASUREMENT (Schedule of Fair Value Assumptions) (Details) - 2024 Notes - Level 3 | Sep. 30, 2023 $ / shares Y |
Share Price. | |
Debt Instrument, Measurement Input | $ / shares | 1.66 |
Expected term | |
Debt Instrument, Measurement Input | Y | 0.93 |
Risk free rate | |
Debt Instrument, Measurement Input | 5.34 |
Volatility | |
Debt Instrument, Measurement Input | 62.84 |
Yield | |
Debt Instrument, Measurement Input | 12.49 |
FAIR VALUE MEASUREMENT (Additio
FAIR VALUE MEASUREMENT (Additional Information) (Details) - Level 3 - 2024 Notes $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Instrument Carrying Amount | $ 20,400 |
Debt Instrument Fair Value | $ 24,500 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | $ 10,345 | $ 14,183 | $ 55,008 | $ 39,021 |
Goods | ||||
Revenues | 10,168 | 8,812 | 30,309 | 21,222 |
Goods | Pfizer | ||||
Revenues | 2,304 | 4,541 | 7,972 | 11,279 |
Goods | Brazil | ||||
Revenues | 2,320 | 1,708 | 5,120 | 7,162 |
Goods | Chiesi | ||||
Revenues | 5,544 | 2,563 | 17,217 | 2,781 |
License and R&D Services | ||||
Revenues | $ 177 | $ 5,371 | $ 24,699 | $ 17,799 |
STOCK TRANSACTIONS (Details)
STOCK TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
May 10, 2023 | May 08, 2023 | Jul. 02, 2021 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Jul. 25, 2023 | Jul. 24, 2023 | Jun. 28, 2023 | Jun. 27, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||||||||
Common Stock, Shares Authorized | 185,000,000 | 185,000,000 | 185,000,000 | 144,000,000 | 144,000,000 | ||||||
Exercise of warrants (in shares) | 237,012 | 0 | |||||||||
Exercise of warrants | $ 712 | $ 2 | |||||||||
Exercise of warrants | $ 700 | 712 | 2 | ||||||||
Warrants issued to purchase common stock | 845,000 | ||||||||||
Stock issuance proceeds | $ 23,954 | $ 4,161 | |||||||||
2006 Employee Stock Incentive Plan | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares authorized for issuance under share-based payment arrangement | 12,475,171 | 8,475,171 | |||||||||
2024 Notes | |||||||||||
Class of Stock [Line Items] | |||||||||||
Converted instrument, shares issued | 0 | 4,691,623 | |||||||||
Paid to the converting holders | $ 900 | ||||||||||
Decrease in principal amount | $ 8,300 | ||||||||||
ATM Equity Offering Sales Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 3,296,123 | 0 | 12,560,150 | ||||||||
Stock issuance proceeds | $ 13,800 | $ 24,900 | |||||||||
Private Placement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Exercise of warrants (in shares) | 301,810 |
STOCK TRANSACTIONS - Stock base
STOCK TRANSACTIONS - Stock based compensation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |||||
Sep. 29, 2023 USD ($) item $ / shares shares | Sep. 14, 2023 USD ($) item $ / shares shares | Aug. 15, 2023 USD ($) item $ / shares shares | Sep. 30, 2023 $ / shares | Jun. 28, 2023 shares | Jun. 27, 2023 shares | |
Options | ||||||
Class of Stock [Line Items] | ||||||
Exercise price | $ / shares | $ 1.34 | |||||
2006 Employee Stock Incentive Plan | ||||||
Class of Stock [Line Items] | ||||||
Number of shares authorized for issuance under share-based payment arrangement | 12,475,171 | 8,475,171 | ||||
2006 Employee Stock Incentive Plan | Shares of restricted Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares granted | 1,371,362 | |||||
Estimated fair value on date of grant | $ | $ 2.7 | |||||
2006 Employee Stock Incentive Plan | Shares of restricted Common Stock | Upon grant | ||||||
Class of Stock [Line Items] | ||||||
Number of shares granted | 200,000 | |||||
2006 Employee Stock Incentive Plan | Shares of restricted Common Stock | Over a two-year period | ||||||
Class of Stock [Line Items] | ||||||
Number of shares granted | 600,000 | |||||
Vesting period | 2 years | |||||
Vesting in number of quarterly increments | item | 8 | |||||
2006 Employee Stock Incentive Plan | Shares of restricted Common Stock | Over a three-year period | ||||||
Class of Stock [Line Items] | ||||||
Number of shares granted | 571,362 | |||||
Vesting period | 3 years | |||||
Vesting in number of quarterly increments | item | 12 | |||||
2006 Employee Stock Incentive Plan | Options | Officers and other employees | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 3 years | |||||
Vesting in number of quarterly increments | item | 12 | |||||
Estimated fair value on date of grant | $ | $ 1.5 | |||||
Term of award | 10 years | |||||
Number of options to purchase shares | 1,056,315 | |||||
Exercise price | $ / shares | $ 1.99 | |||||
2006 Employee Stock Incentive Plan | Options | Chairman, Board of Directors | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 3 years | |||||
Vesting in number of quarterly increments | item | 12 | |||||
Estimated fair value on date of grant | $ | $ 0.1 | |||||
Term of award | 10 years | |||||
Number of options to purchase shares | 85,715 | |||||
Exercise price | $ / shares | $ 1.75 | |||||
2006 Employee Stock Incentive Plan | Options | Non-executive directors other than Chairman | ||||||
Class of Stock [Line Items] | ||||||
Vesting period | 3 years | |||||
Vesting in number of quarterly increments | item | 12 | |||||
Estimated fair value on date of grant | $ | $ 0.4 | |||||
Term of award | 10 years | |||||
Number of options to purchase shares | 308,380 | |||||
Exercise price | $ / shares | $ 1.66 |
STOCK TRANSACTIONS - Schedule o
STOCK TRANSACTIONS - Schedule of Weighted average assumptions (Details) - Options | 3 Months Ended |
Sep. 30, 2023 $ / shares | |
Class of Stock [Line Items] | |
Weighted average grants date fair value (USD) | $ 1.34 |
Exercise price (USD) | $ 1.91 |
Risk free rate | 4.40% |
Volatility | 79.40% |
Dividend yield | 0% |
Expected life (Years) | 5 years 9 months |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income (loss) | $ (1,852) | $ (3,567) | $ 14,356 | $ (11,187) |
Financial expenses of 2024 Notes | (1,766) | (1,610) | ||
Net income (loss) for diluted calculation | $ (3,618) | $ (3,567) | $ 12,746 | $ (11,187) |
Denominator: | ||||
Weighted average shares of Common Stock outstanding for basic calculation | 72,281,681 | 49,498,105 | 65,811,506 | 47,582,733 |
Weighted average dilutive effect of 2024 Notes | 11,500,998 | 13,981,660 | ||
Weighted average dilutive effect of stock options | 1,247,115 | |||
Weighted average shares of Common Stock outstanding for diluted calculation | 83,782,679 | 49,498,105 | 81,040,281 | 47,582,733 |
Outstanding Stock Options And Warrants | ||||
Denominator: | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 19,429,910 | 18,399,260 | ||
Outstanding Stock Options Warrants And 2024 Notes | ||||
Denominator: | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 33,922,624 | 33,295,154 |
TAXES ON INCOME (Details)
TAXES ON INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | May 31, 2023 | |
TAXES ON INCOME | ||||
Current taxes on income | $ 95 | $ 3,728 | ||
Deferred taxes on income | 38 | (3,092) | ||
Total taxes on income | 133 | $ 636 | ||
Effective income tax rate (as a percent) | 4% | 0% | ||
Statutory income tax rate | 21% | |||
Milestone Payments to regulatory approvals | $ 20,000 | |||
Valuation allowance related to deferred tax assets | $ 3,100 |
SUPPLEMENTARY FINANCIAL STATE_3
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Accounts Payable and Accruals - Other) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts payable and accruals - other: | ||
Payroll and related expenses | $ 1,239 | $ 1,216 |
Interest Payable | 123 | 719 |
Provision for vacation | 1,471 | 1,404 |
Accrued expenses | 9,249 | 7,478 |
Royalties payable | 332 | 781 |
Income tax payable | 3,257 | 530 |
Reserve for deductions from revenue | 2,816 | |
Property and equipment suppliers | 253 | 143 |
Accounts payable and accruals - other | $ 18,740 | $ 12,271 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Oct. 15, 2023 USD ($) item $ / shares shares | Oct. 04, 2023 USD ($) | Sep. 30, 2023 $ / shares | |
Stock Options | |||
Subsequent Event [Line Items] | |||
Exercise price | $ / shares | $ 1.34 | ||
Subsequent Event | Chiesi Agreements | |||
Subsequent Event [Line Items] | |||
Proceeds From Sale Of Products | $ | $ 6,400 | ||
Subsequent Event | Stock Options | New officer | 2006 Employee Stock Incentive Plan | |||
Subsequent Event [Line Items] | |||
Term of award | 10 years | ||
Number of options to purchase shares | shares | 250,000 | ||
Exercise price | $ / shares | $ 1.48 | ||
Vesting period | 3 years | ||
Vesting in number of quarterly increments | item | 12 | ||
Estimated fair value on date of grant | $ | $ 260 |