0001144204-17-015083 | 10-K | XBRL Viewer | Protalix Biotherapeutics INC

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Dec. 31, 2016	Mar. 01, 2017	Jun. 30, 2016
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Entity Registrant Name	Protalix BioTherapeutics, Inc.
Entity Central Index Key	0001006281
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 61.7
Trading Symbol	PLX
Entity Common Stock, Shares Outstanding		124,134,085

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 63,281	$ 76,374
Accounts receivable - Trade	693
Other assets	2,321	1,667
Inventories	5,245	5,767
Assets of discontinued operation	327	2,073
Total current assets	71,867	85,881
FUNDS IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT	1,677	1,628
PROPERTY AND EQUIPMENT, NET	8,703	9,744
Total assets	82,247	97,253
Accounts payable and accruals:
Trade	4,007	3,629
Other	7,496	5,534
Convertible notes	53,872
Deferred revenues	837	504
Liabilities of discontinued operation		1,568
Total current liabilities	66,212	11,235
LONG TERM LIABILITIES:
Convertible notes	19,343	67,796
Deferred revenues		744
Liability for employee rights upon retirement	2,348	2,304
Promissory note	4,301	4,301
Total long term liabilities	25,992	75,145
Total liabilities	92,204	86,380
COMMITMENTS (Note 6)
SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY):
Common Stock, $0.001 par value: Authorized - as of December 31, 2015 and 2016, 150,000,000 and 250,000,000 shares; issued and outstanding, respectively - as of December 31, 2015 and 2016, 99,800,397 shares and 124,134,085 shares, respectively	124	100
Additional paid-in capital	202,575	194,064
Accumulated deficit	(212,656)	(183,291)
Total shareholders’ equity (capital deficiency)	(9,957)	10,873
Total liabilities and shareholders’ equity (net of capital deficiency)	$ 82,247	$ 97,253

CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares Authorized	250,000,000	150,000,000
Common Stock, issued	124,134,085	99,800,397
Common Stock, outstanding	124,134,085	99,800,397

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
REVENUES	$ 9,199	$ 4,364	$ 3,523
COST OF REVENUES	(8,398)	(730)	(630)
GROSS PROFIT	801	3,634	2,893
RESEARCH AND DEVELOPMENT EXPENSES	(30,412)	(24,889)	(27,352)
Less - grants	5,804	4,864	5,128
RESEARCH AND DEVELOPMENT EXPENSES, NET	(24,608)	(20,025)	(22,224)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(9,356)	(7,279)	(9,228)
OPERATING LOSS	(33,163)	(23,670)	(28,559)
FINANCIAL EXPENSES	(10,665)	(3,735)	(4,935)
FINANCIAL INCOME	589	123	196
GAIN ON EXTINGUISHMENT OF CONVERTIBLE NOTES	14,063
FINANCIAL INCOME (EXPENSES) - NET	3,987	(3,612)	(4,739)
LOSS FROM CONTINUING OPERATIONS	(29,176)	(27,282)	(33,298)
(LOSS) INCOME FROM DISCONTINUED OPERATIONS	(189)	85,319	3,355
NET INCOME (LOSS) FOR THE YEAR	$ (29,365)	$ 58,037	$ (29,943)
Net Income (loss) per share of common stock - basic and diluted
Loss from continuing operations (in dollars per share)	$ (0.29)	$ (0.29)	$ (0.36)
Income from discontinued operations (in dollars per share)	(0.00)	0.90	0.04
Net (loss) income per share of common stock (in dollars per share)	$ (0.29)	$ 0.61	$ (0.32)
Weighted average number of shares of common stock used in computing loss per share of common stock, basic and diluted	101,387,704	94,922,390	92,891,846

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands

Total

Common Stock [Member]

Additional Paid-in Capital [Member]

Accumulated Deficit [Member]

Balance at Dec. 31, 2013

$ (26,946)

$ 93

$ 184,346

$ (211,385)

Balance (in shares) at Dec. 31, 2013

93,551,098

Share-based compensation related to stock options

467

Share-based compensation related to restricted stock award, net of forfeitures

775

Share-based compensation related to restricted stock award, net of forfeitures (in shares)

(81,209)

Exercise of options granted to employees

$ 1

Exercise of options granted to employees (in shares)

133,930

Net loss from continuing operations

(33,298)

Net income (loss) from discontinued operations

3,355

Balance at Dec. 31, 2014

(55,601)

$ 94

185,633

(241,328)

Balance (in shares) at Dec. 31, 2014

93,603,819

Issuance of common stock

6,101

$ 6

6,095

Issuance of common stock (in shares)

5,649,079

Share-based compensation related to stock options

1,273

Share-based compensation related to restricted stock award, net of forfeitures

529

Share-based compensation related to restricted stock award, net of forfeitures (in shares)

(2,501)

Exercise of options granted to employees

534

^[1]

534

Exercise of options granted to employees (in shares)

550,000

Net loss from continuing operations

(27,282)

Net income (loss) from discontinued operations

85,319

Balance at Dec. 31, 2015

10,873

$ 100

194,064

(183,291)

Balance (in shares) at Dec. 31, 2015

99,800,397

Issuance of common stock

6,848

$ 24

6,824

Issuance of common stock (in shares)

23,846,735

Equity component of convertible notes

685

Share-based compensation related to stock options

920

Share-based compensation related to restricted stock award, net of forfeitures

^[1]

Share-based compensation related to restricted stock award, net of forfeitures (in shares)

7,843

Exercise of options granted to employees

^[1]

Exercise of options granted to employees (in shares)

479,110

Net loss from continuing operations

(29,176)

Net income (loss) from discontinued operations

(189)

Balance at Dec. 31, 2016

$ (9,957)

$ 124

$ 202,575

$ (212,656)

Balance (in shares) at Dec. 31, 2016

124,134,085

[1]	Represents an amount of less than $1.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Parenthetical] - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Restricted Stock [Member]
Share-based compensation related to restricted stock award, forfeitures, (in shares)	2,501	185,709

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (29,365)	$ 58,037	$ (29,943)
Income (loss) from discontinued operations	(189)	85,319	3,355
Loss from continuing operations	(29,176)	(27,282)	(33,298)
Adjustments required to reconcile net income (loss) to net cash used in operating activities:
Share based compensation	988	1,802	1,242
Depreciation	1,983	2,370	3,140
Financial expenses, net	13	124	1,446
Changes in accrued liability for employee rights upon retirement	10	59	140
Loss (gain) on amounts funded in respect of employee rights upon retirement	7	18	(22)
Gain on sale of fixed assets	(7)	(2)	(3)
Gain on extinguishment of convertible notes	(14,063)
Change in fair value of convertible notes embedded derivative	6,473
Amortization of debt issuance costs and debt discount	568	445	444
Changes in operating assets and liabilities:
Increase (decrease) in deferred revenues (including non-current potion)	(411)	362	886
Decrease (increase) in accounts receivable and other assets	(1,133)	523	(1,006)
Decrease (increase) in inventories	522	(2,316)	(3,451)
Increase (decrease) in accounts payable and accruals (including long term )	2,139	(1,873)	1,367
Net cash used in continuing operations	(32,087)	(25,770)	(29,115)
Net cash provided by (used in) discontinued operations	(11)	1,486	(166)
Net cash used in operating activities	(32,098)	(24,284)	(29,281)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(849)	(464)	(785)
Proceeds from sale of property and equipment	20	3	11
Decrease (increase) in restricted deposit	(106)	45	(90)
Amounts funded in respect of employee rights upon retirement, net	(32)	(96)	(137)
Net cash used in continuing operations	(967)	(512)	(1,001)
Net cash provided by discontinued operations		39,899
Net cash provided by (used in) investing activities	(967)	39,387	(1,001)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of convertible notes	19,681
Issuance of shares, net of issuance cost		6,101
Exercise of options	14	534	46
Net cash provided by financing activities	19,695	6,635	46
EFFECT OF EXCHANGE RATE CHANGES ON CASH	277	(131)	(1,395)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(13,093)	21,607	(31,631)
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	76,374	54,767	86,398
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR	63,281	76,374	54,767
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Purchase of property and equipment	595	489	120
Issuance of promissory note	0	4,301
Issuance of common stock, net of issuance cost	6,848
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS
Interest paid	$ 3,659	$ 3,105	$ 3,079

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

General

Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”), and its wholly-owned subsidiaries, Protalix Ltd. and Protalix B.V. (the “Subsidiaries”), are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company’s proprietary ProCellEx^® protein expression system (“ProCellEx”). To date, the Company has successfully developed taliglucerase alfa (marketed under the name Uplyso^TM in Brazil and certain other Latin American countries and Elelyso^TM in the rest of the territories) for the treatment of Gaucher disease that has been approved for marketing in the United States, Brazil, Israel and other markets. The Company has a number of product candidates in varying stages of the clinical development process. The Company’s current strategy is to develop proprietary recombinant proteins that are therapeutically superior to existing recombinant proteins currently marketed for the same indications.

The Company’s product pipeline currently includes, among other candidates:

(1) PRX-102, or alpha-GAL-A, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder;

(2) PRX-110, a proprietary plant cell recombinant human Deoxyribonuclease 1, or DNase, under development for the treatment of cystic fibrosis, to be administered by inhalation; and

(3) OPRX-106, the Company’s oral antiTNF product candidate which is being developed as an orally-delivered anti inflammatory treatment using plant cells as a natural capsule for the expressed protein.

Obtaining marketing approval with respect to any product candidate in any country is directly dependent on the Company’s ability to implement the necessary regulatory steps required to obtain such approvals. The Company cannot reasonably predict the outcome of these activities.

Since its approval by the FDA, taliglucerase alfa has been marketed mainly in the United States by Pfizer Inc. (“Pfizer”), as provided in the exclusive license and supply agreement by and between Protalix Ltd. and Pfizer, which is referred to herein as the Pfizer Agreement. In October 2015, the Company entered into an Amended and Restated Exclusive License and Supply Agreement (the “Amended Pfizer Agreement”) which amends and restates the Pfizer Agreement in its entirety. Pursuant to the Amended Pfizer Agreement, the Company sold to Pfizer its share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso in exchange for a cash payment equal to $36.0 million. 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 Pfizer Agreement, Pfizer and the Company shared revenues and expenses for the development and commercialization of Elelyso on a 60%/40% basis globally, excluding Israel and 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. For further details see note 2.

On June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health for taliglucerase alfa. Fiocruz’s purchases of Uplyso 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 low purchase amounts, the Company is, at this time, continuing to supply Uplyso to Fiocruz under the Brazil Agreement, and patients continue to be treated with Uplyso in Brazil. Approximately 10% of adult Gaucher patients in Brazil are currently treated with Uplyso. The Company is discussing with Fiocruz potential actions that Fiocruz may take to comply with its purchase obligations and, based on such discussions, the Company will determine what it believes to be the course of action that is in the best interest of the Company.

In December 2016, the Company received a letter from Fiocruz regarding an order from the Brazilian Ministry of Health (the “Brazilian Ministry”) to purchase alfataliglicerase to treat Gaucher patients in Brazil. The Brazilian Ministry’s order consists of a number of shipments during 2017 for a total of approximately $24.3 million. Shipments are to start in mid-2017 and continue through the end of the year, in increasing volumes. The Company has recorded revenues of approximately $4.0 million for sales of taliglucerase alfa to Fiocruz in 2016.

The Company is required to pay a fee equal to 5% of the net proceeds generated in Brazil to an agent for services provided in assisting the Company complete the Brazil Agreement pursuant to an agreement between the agent and the Company. The agreement will remain in effect with respect to the Brazil Agreement until the termination thereof.

Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least 12 months, although no assurance can be given that it will not need additional funds prior to such time. If there are unexpected increases in general and administrative expenses or research and development expenses, the Company may need to seek additional financing.

Basis of presentation

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Functional currency

The dollar is the currency of the primary economic environment in which the operations of the Company and its Subsidiaries are conducted. Most of the Company’s revenues are derived in dollars. Most of the Company’s expenses and capital expenditures are incurred in dollars, and the major source of the Company’s financing has been provided in dollars.

Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions – exchange rates at the transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) – historical exchange rates. Currency transaction gains and losses are recorded as financial income or expenses, as appropriate.

Cash equivalents

The Company considers all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase, that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cash equivalents.

Inventories

Inventories are valued at the lower of cost or market. Cost of raw and packaging materials and purchased products is determined using the “moving average” basis.

Cost of finished products is determined as follows: the value of the raw and packaging materials component is determined primarily using the “moving average” basis; the value of the labor and overhead component is determined on an average basis over the production period.

Inventory is written down for estimated obsolescence based upon management assumptions about future demand and market conditions.

Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization.

The Company’s assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:

	Years
Laboratory equipment		5
Furniture		10-15
Computer equipment		3

Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements.

Impairment in value of long-lived assets

The Company tests long-lived assets for impairment if an indication of impairment exists. If the sum of expected future cash flows of definite life assets (undiscounted and without interest charges) is less than the carrying amount of such assets, the Company recognizes an impairment loss, and writes down the assets to their estimated fair values.

Income taxes

Deferred income taxes

Deferred taxes are determined utilizing the assets and liabilities method based on the estimated future tax effects of the differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has provided a full valuation allowance with respect to its deferred tax assets. The Company used tax rates of 39%, 24% and 23%. See note 10.

Uncertainty in income taxes

Tax benefits recognized in the financial statements are those that the Company’s management deems at least more likely than not to be sustained, based on technical merits. The amount of benefits recorded for these tax benefits is measured as the largest benefit the Company’s management deems more likely than not to be sustained.

Revenue Recognition

Revenues from supply agreements and from selling products

The Company recognizes revenues from supply agreements and from selling products upon delivery, when the sales price is fixed or determinable and collectability is reasonably assured.

Research and development costs

Research and development costs are expensed as incurred and consist primarily of personnel, subcontractors and consultants (mainly in connection with clinical trials), facilities, equipment and supplies for research and development activities. Grants received by the Israeli Subsidiary from the National Authority for Technological Innovation (“NATI”), which has replaced many of the functions of the Office of the Chief Scientist of Israel’s Ministry of Industry, Trade and Labor (the “OCS”), are recognized when the grant becomes receivable, provided there is reasonable assurance that the Company or the Subsidiaries will comply with the conditions attached to the grant and there is reasonable assurance the grant will be received. The grant is deducted from the research and development expenses as the applicable costs are incurred. In connection with purchases of assets, amounts assigned to intangible assets to be used in a particular research and development project that have no alternative future use are charged to research and development costs at the purchase date.

Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are consumed or the related services are performed.

Concentration of credit risks and trade receivable

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of bank deposits. The Company deposits these instruments with highly rated financial institutions, mainly in Israeli banks, and, as a matter of policy, limits the amounts of credit exposure to any one financial institution. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these instruments.

The Company’s trade receivables represent amounts to be received from Pfizer and Brazil. The Company does not require Pfizer or Brazil to post collateral with respect to receivables.

Share-based compensation

The Company accounts for employee’s share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period.

The Company elected to recognize compensation cost for an award with only service conditions that has a graded vesting schedule using the accelerated method based on the multiple-option award approach.

When stock options are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the stock options issued. Options granted are measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.

Net earnings (loss) per share

Basic and diluted loss per share (“LPS”) are computed by dividing net loss by the weighted average number of shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”) outstanding for each period.

The calculation of diluted LPS does not include 18,850,724, 19,778,424 and 23,532,492 shares of Common Stock underlying outstanding options, restricted shares of Common Stock and shares issuable upon conversion of the convertible notes for the fiscal years ended December 31, 2014, 2015 and 2016, respectively, because the effect would be anti-dilutive.

Convertible notes

All outstanding convertible notes are accounted for using the guidance set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) 815 requiring that the Company determine whether the embedded conversion option must be separated and accounted for separately. ASC 470-20 regarding debt with conversion and other options requires the issuer of a convertible debt instrument that may be settled in cash upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The Company accounts for the 2013 Notes (as defined in note 8a) as a liability, on an aggregated basis, in their entirety. The 2016 Notes (as defined in note 8b) partially are accounted for as liability and equity components of the instrument and partially as a debt host contract with an embedded derivative resulting from the conversion feature.

The debt discount and debt issuance costs regarding the issuance of the 2013 Notes are deferred and amortized over the 2013 Notes period (5 years).

Issuance costs regarding the issuance of the 2016 Notes were allocated to the liability, equity component, derivative and shares based on their relative fair values. Issuance costs that were allocated to the liability are amortized using the effective interest rate, other than issuance costs that were allocated to the derivative which were expensed immediately.

Recently adopted standards

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016-09”) which simplifies certain aspects of the accounting for share-based payments, including accounting for income taxes, classification of awards as either equity or liabilities, classification on the statement of cash flows as well as allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period for which financial statements have not yet been issued, and all amendments in the ASU that apply must be adopted in the same period.

The Company adopted this standard in the fourth quarter of 2016. The implementation of this ASU did not have a material impact on the consolidated financial statements.

Recently issued accounting pronouncements

In May 2014, the FASB issued guidance on revenues from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions require capitalization of certain contracts costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount timing and uncertainty of revenues and cash flows arising from an entity’s contracts with customers. The guidance is effective for the interim and annual periods beginning on or after December 15, 2017 (early adoption is permitted for the interim and annual periods beginning on or after December 15, 2016). The guidance permits the use of either a retrospective or modified retrospective transition method. The Company is currently evaluating the impact of the guidance on its consolidated financial statements.

In January 2016, the FASB issued ASU, No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The guidance affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. The guidance is effective in the first quarter of fiscal year 2019. Early adoption is permitted for the accounting guidance on financial liabilities under the fair value option. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flow - Classification of Certain Cash Receipts and Cash Payments (Topic 230)” (“ASU 2016-15”) which addresses specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this new pronouncement on its consolidated statements of cash flows.

In November 2016, the FASB issued ASU 2016-18, “Statement of cash flows (Topic 230): Restricted cash,” which addresses the treatment of restricted cash in the statements of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance will be effective the fiscal year beginning on January 1, 2018, including interim periods within that year (early adoption is permitted). The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements.

AGREEMENTS WITH PFIZER

12 Months Ended

Dec. 31, 2016

AGREEMENTS WITH PFIZER [Abstract]

AGREEMENTS WITH PFIZER

NOTE 2 - AGREEMENTS WITH PFIZER

On November 30, 2009, Protalix Ltd. and Pfizer entered into the Pfizer Agreement pursuant to which Pfizer was granted an exclusive, worldwide license to develop and commercialize taliglucerase alfa, except in Israel. Under the terms and conditions of the Pfizer Agreement, Protalix Ltd. retained the right to commercialize taliglucerase alfa in Israel. In June 2013, Pfizer returned the commercialization rights in Brazil to Protalix Ltd.

Under the Pfizer Agreement and prior to its amendment in October 2015, Pfizer made an upfront payment to Protalix Ltd. of $60.0 million in connection with the execution of the agreement and shortly thereafter paid Protalix Ltd. an additional $5.0 million upon the Company’s achievement of a certain milestone. Protalix Ltd. received a $25.0 million milestone payment in connection with the approval of taliglucerase alfa by the FDA in May 2012. Protalix Ltd. was entitled to 40% of the results (profits or losses) earned on Pfizer’s sales of taliglucerase alfa. Such result (profit or loss) were to be calculated while, in addition to other adjustments, taking into account Protalix Ltd.’s cost of goods sold and Pfizer’s commercial expenses, with certain expenses capped or borne solely by one party (“Collaboration Operation”). As of October 12, 2015 (day of signing the Amended Pfizer Agreement), the Company accrued a liability in respect of its share in the accumulated losses of the collaboration operation equal to approximately $4.3 million. After deducting the losses, the Company is entitled to receive in cash its share in the profits of the collaboration operation. Upon execution of the Amended Pfizer Agreement, the Company no longer shares Pfizer’s profits or losses with respect to Pfizer’s sales of taliglucerase alfa.

The Company recognized revenue from milestone payments received pursuant to the Pfizer Agreement in accordance with guidance regarding arrangements with multiple deliverables. As the first Pfizer Agreement required the Company’s continued involvement with respect to the proposed commercialization of taliglucerase alfa, the non-refundable, up-front license payment the Company received from Pfizer was deferred and was recognized over the related performance period. The Company estimated the performance period of 14 years based on the date the last relevant patent expires. As to the final release of the deferred revenue, see 2 below. Each milestone payment that was considered to be substantive for purposes of revenue recognition was recorded as revenue during the period in which the milestone was achieved.

The Company first determined that the initial, non-refundable upfront license fee payment of $60.0 million together with the first $5.0 million payment were to be recognized on a straight line basis as revenue over the estimated relationship period (approximately $4.6 million per year). The $25.0 million milestone payment received during 2012 in connection with the FDA’s approval of taliglucerase alfa in the United States was considered to be a substantive milestone for purposes of revenue recognition and, accordingly, was recorded as revenue during the period in which the milestone was achieved.

In October 2015 the Company entered into the following agreements:

Amended Pfizer Agreement - Pursuant to the amendment, the Company granted Pfizer an exclusive license in the entire world, including Israel but excluding Brazil. Pfizer acquired all the information, knowledge and permission to manufacture and sell Elelyso.

Protalix also agreed to provide Pfizer with:

Manufacturing and supply of the drug substance for its incorporation into the licensed product in consideration of an agreed price per unit.

Assistance in arranging for the manufacture of the drug substance by Pfizer or by alternative supplier chosen by Pfizer in consideration of an agreed hourly rate plus reimbursement of expenses.

Stock Purchase Agreement - the Company issued 5,649,079 shares of Common Stock to Pfizer.

Promissory note – as of the date of the amendment, the Company owed Pfizer $4.3 million as a result of the accumulated losses incurred by the collaboration operation. Following the new agreements, the Company committed to pay Pfizer the principal sum of the debt at the earlier of (a) November 12, 2020 and (b) the date upon which it becomes due pursuant to any event of default, as defined.

The three contracts presented above are considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $46.0 million between the license and Common Stock according to each fair value, as follows: $6.1 million was allocated to the issuance of shares and $39.9 million to the license. The Company considered the relevant circumstances in order to determine the appropriate timing of revenue recognition and determined that revenues related to the Amended Pfizer Agreement should be recognized immediately. The Amended Pfizer Agreement terminated the Company’s continued involvement according to the original Pfizer Agreement and therefore the pre-existing balance of deferred revenue was recognized in the Statement of Operations.

The Amended Pfizer Agreement resulted in a discontinued operation as defined under ASU 2014-08 because it represented a strategic shift for the Company that has a major effect on the entity’s operations and financial results.

Revenues from the Pfizer Agreements as well as revenues from sales of Elelyso in Israel are presented as discontinued operations, see note 12.

In connection with the payments received under the Pfizer Agreement and the Amended Pfizer Agreement, Protalix Ltd. paid to other third parties certain royalties. See note 6a.

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2016

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

NOTE 3 - PROPERTY AND EQUIPMENT

Composition of property and equipment grouped by major classifications is as follows:

	December 31,
(U.S. dollars in thousands)	2015		2016
Laboratory equipment	$	15,493	$	16,265
Furniture and computer equipment		2,244		2,342
Leasehold improvements		15,635		15,678
Equipment under construction		175		19
	$	33,547	$	34,304
Less – accumulated depreciation
and amortization		(23,803)		(25,601)
	$	9,744	$	8,703

Depreciation in respect of property and equipment totaled approximately $3.1 million, $2.4 million and $2 million for the years ended December 31, 2014, 2015 and 2016, respectively.

INVENTORIES

12 Months Ended

Dec. 31, 2016

INVENTORIES [Abstract]

INVENTORIES

NOTE 4 - INVENTORIES

Inventories at December 31, 2015 and 2016 consisted of the following:

	December 31,
(U.S. dollars in thousands)	2015		2016
Raw materials	$	1,180	$	2,591
Work in progress				395
Finished goods		4,587		2,259
Total inventory	$	5,767	$	5,245

During the years ended December 31, 2015 and 2016 the Company recorded approximately $1.3 million and $67,000 respectively, for write-down of inventory under the cost of revenues.

LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT

12 Months Ended

Dec. 31, 2016

LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT [Abstract]

LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT

NOTE 5 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT

The Israeli Subsidiary is required to make a severance payment upon dismissal of an employee or upon termination of employment in certain circumstances. The severance pay liability to the employees (based upon length of service and the latest monthly salary - one month’s salary for each year employed) is recorded on the Company’s balance sheets under “Liability for employee rights upon retirement.” The liability is recorded as if it were payable at each balance sheet date on an undiscounted basis.

The liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in the funds. The amounts used to fund these liabilities are included in the Company’s balance sheets under “Funds in respect of employee rights upon retirement.” These policies are the Company’s assets. However, under labor agreements and subject to certain limitations, any policy may be transferred to the ownership of the individual employee for whose benefit the funds were deposited. In the years ended December 31, 2014, 2015 and 2016, the Company deposited approximately $195,000, $168,000 and $164,000, respectively, with insurance companies in connection with its severance payment obligations.

In accordance with the current employment agreements with certain employees, the Company makes regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s rights upon retirement. The Company is fully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Company’s balance sheets, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies (the “Contribution Plans”).

The amounts of severance pay expenses were approximately $1.0 million, $800,000 and $842,000 for each of the years ended December 31, 2014, 2015 and 2016, respectively, of which approximately $779,000, $675,000 and $675,000 in the years ended December 31, 2014, 2015 and 2016, respectively, were in respect of the Contribution Plans. Gain (loss) on amounts funded in respect of employee rights upon retirement totaled approximately $22,000, ($18,000) and ($7,000) for the years ended December 31, 2014, 2015 and 2016, respectively.

The Company expects to contribute approximately $869,000 in the year ending December 31, 2017 to insurance companies in connection with its severance liabilities for its operations for that year, approximately $708,000 of which will be contributed to one or more Contribution Plans.

During the five-year period following December 31, 2016, the Company expects to pay future benefits to two employees upon each such employee’s normal retirement age. The Company anticipates that the benefits payable will be approximately $209,000.

COMMITMENTS

12 Months Ended

Dec. 31, 2016

COMMITMENTS [Abstract]

COMMITMENTS

NOTE 6 - COMMITMENTS

Royalty Commitments

The Company is obligated to pay royalties to NATI on proceeds from the sale of products developed from research and development activities that were funded, partially, by grants from NATI or its predecessor, the OCS. At the time the grants were received, successful development of the related projects was not assured.

In the case of failure of a project that was partly financed as described above, the Company is not obligated to pay any such royalties or repay funding received from NATI or the OCS.

Under the terms of the applicable funding arrangements, royalties of 3% to 6% are payable on the sale of products developed from projects funded by NATI or the OCS, which payments shall not exceed, in the aggregate, 100% of the amount of the grant received (dollar linked), plus, commencing upon January 1, 2001, interest at an annual rate based on LIBOR. In addition, if the Company receives approval to manufacture products developed with government grants outside the State of Israel, it will be required to pay an increased total amount of royalties (possibly up to 300% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside the State of Israel, and, possibly, an increased royalty rate.

Royalty expenses to NATI or the OCS are included in the statement of operations as a component of the cost of revenues both in continuing and discontinued operations and were approximately $951,000, $2.2 million and $288,000 during the years ended December 31, 2014, 2015 and 2016, respectively.

At December 31, 2015 and 2016, the maximum total royalty amount payable by the Company under these funding arrangements is approximately $33.3 million and $38.5 million, respectively (without interest, assuming 100% of the funds are payable).

The Company is a party to certain research and license agreements. Under the agreements, the Company is obligated to pay royalties at varying rates from its future revenues. The aggregate royalties payable under all of the agreements is equal to a varying range of percentages of net sales of licensed products. Royalty expenses under the agreements are included in the statement of operations as a component of the cost of revenues both in continuing and discontinued operations and were approximately $104,000, $51,000 and $286,000 during the years ended December 31, 2014, 2015 and 2016, respectively.

Under each agreement, the Company is also obligated to pay milestone, licensing and other payments to the counterparties of the agreement. The payments under the agreements are for varying amounts and are subject to varying conditions. If all of the contingencies with respect to milestone payments under the research and license agreements are met, the aggregate milestone payments total payable would be approximately $8.4 million and would be payable, if at all, as the Company’s projects progress over the course of a number of years. No milestone payments were made during 2014 and 2015, and milestones payments of $300,000 were made during 2016.

None of the agreements has a fixed termination date. Subject to earlier termination for other reasons, each agreement terminates after a certain number of years following the first commercial sale of any licensed product under the agreement or after a certain number of years without the initiation of commercial sales of any product under the agreement.

Subcontracting Agreements

The Company has entered into sub-contracting agreements with several clinical providers and consultants in Israel, the United States and certain other countries in connection with its primary product development process. As of December 31, 2016, total commitments under said agreements were approximately $12.5 million.

Lease Agreements

The Company is a party to a number of lease agreements for its facilities, the latest of which has been extended until 2021. The Company has the option to extend certain of such agreements on two additional occasions for additional five-year periods each, for a total of 10 additional years. Under the leases, the aggregate monthly rental payments are approximately $61,000. As of December 31, 2016, the Company provided bank guarantees of approximately $288,000, in the aggregate, to secure the fulfillment of its obligations under the lease agreements. The future minimum lease payments required under the operating leases for such premises are approximately $735,000, $722,000, $680,000, $680,000 and $543,000, for fiscal years 2017 through 2021, respectively. Lease expenses totaled approximately $1.0 million for each of the years ended December 31, 2014, 2015 and 2016, respectively.

Vehicle Lease and Maintenance Agreements

The Company entered into several three-year lease and maintenance agreements for vehicles which are regularly amended as new vehicles are leased. The current monthly lease fees aggregate approximately $51,000. The expected lease payments for the years ending December 31, 2017, 2018 and 2019 are approximately $563,000, $ 289,000, and $84,000 respectively.

SHARE CAPITAL

12 Months Ended

Dec. 31, 2016

SHARE CAPITAL [Abstract]

SHARE CAPITAL

NOTE 7 - SHARE CAPITAL

Rights of the Company’s Common Stock

The Company’s Common Stock is listed on the NYSE MKT and on the Tel Aviv Stock Exchange. Each share of Common Stock is entitled to one vote. The holders of shares of Common Stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. Since its inception, the Company has not declared any dividends.

Stock based compensation

On December 14, 2006, the Board of Directors adopted the Protalix BioTherapeutics, Inc. 2006 Stock Incentive Plan, as amended (the “Plan”). The Plan has since been amended to, among other things, increase the number of shares of common stock available under the plan to 13,841,655 shares. The grant of options to Israeli employees under the Plan is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance. Each option grant is subject to the track chosen by the Company, either Section 102 or Section 102A of the Israeli Income Tax Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim, as an expense for tax purposes, the amounts credited to employees as a benefit, including amounts recorded as salary benefits in the Company’s accounts, in respect of options granted to employees under the Plan, with the exception of the work-income benefit component, if any, determined on the grant date. For Israeli non-employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance.

As of December 31, 2016, 2,391,481 shares of Common Stock remain available for grant under the Plan.

For purposes of determining the fair value of the options and restricted stock granted to employees and non-employees, the Company’s management uses the fair value of the Common Stock.

From January 1, 2014 through December 31, 2016, the Company granted options and shares of restricted stock to certain employees and non-employees as follows:

Options and restricted stock granted to employees:

Below is a table summarizing all of the options and restricted stock grants to employees for each year of the two-year period ended December 31, 2015:

							Fair value
							at grant
							(U.S.
Year of	No. of options		Exercise				dollars in		Expiration
grant	granted		price		Vesting period		thousands)		period
2014		900,000	$	2.37		4 years	$	1,007		10 years
2015		1,909,000	$	1.72		4 years	$	1,900		10 years
		2,809,000

Set forth below are grants made by the Company to employees (including related parties) during the three-year period ended December 31, 2016 (such grants appear in the table above):

On September 28, 2014, the Company’s Board of Directors approved, subject to certain terms and conditions, the grant of a 10-year option to purchase 900,000 shares of Common Stock to its then newly appointed President and Chief Executive Officer with an exercise price of $2.37 per share. The options vest over a four-year period in 16 equal quarterly increments. Vesting of the options will be accelerated in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan, as amended. The Company estimated the fair value of the options on the date of grant, using the Black-Scholes option-pricing model, to be approximately $1.0 million based on the following weighted average assumptions: dividend yield of 0% for all years; expected volatility of 62%; risk-free interest rate of 1.86%; and expected life of six years.

On March 23, 2015, the Company’s compensation committee approved the grant of a 10-year option to purchase 1,909,000 shares of Common Stock to its officers and other employees with an exercise price equal to $1.72 per share under the Plan. The options vest over a four-year period; the first 25% shares vest on the first anniversary of the grant date and the remaining shares vest in 12 equal quarterly increments over the subsequent three-year period. Vesting of the options granted to certain executive officers is subject to acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan. The Company estimated the fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $1.9 million based on the following weighted average assumptions: dividend yield of 0% for all years; expected volatility of 61.7%; risk-free interest rates of 1.6%; and expected life of six years.

The total unrecognized compensation cost of employee stock options and restricted stock at December 31, 2016 is approximately $509,000. The unrecognized compensation cost of employee stock options is expected to be recognized over a weighted average period of 0.8 years.

The total cash received from employees as a result of employee stock option exercises for the years ended December 31, 2014, 2015 and 2016 was approximately $46,000, $534,000 and $14,000, respectively. The Company did not realize any tax benefit in connection with these exercises.

During 2016, the Company issued 479,110 shares of Common Stock in connection with the exercise of 553,125 options granted to a certain employee of the Company. The Company received cash proceeds equal to approximately $14,000 in connection with such exercises.

Options granted to consultants, directors, and other service providers:

On July 24, 2014, the Company’s Board of Directors approved, subject to certain terms and conditions, the grant of a 10-year option to purchase 150,000 shares of Common Stock to its then newly elected chairman of the Board of Directors with an exercise price equal to $3.37 per share. The options vest over a three-year period; the first 50,000 shares vest on the first anniversary of the grant date and the remaining shares vest in eight equal quarterly increments over the subsequent two-year period. Vesting of the options is subject to acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan. The Company estimated the fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $193,000 based on the following weighted average assumptions: dividend yield of 0% for all years; expected volatility of 62%; risk-free interest rates of 1.9%; and expected life of six years.

No cash was received from consultants as a result of consultant stock option exercises for the years ended December 31, 2014, 2015 and 2016.

During 2015 and 2016, no shares of Common Stock were issued in connection with the exercise of options by consultants of the Company.

A summary of share option plans, and related information, under all of the Company’s equity incentive plans for the years ended December 31, 2014, 2015 and 2016 are as follows:

Options granted to employees:

	Year ended December 31,
	2014				2015				2016
			Weighted				Weighted				Weighted
	Number		average		Number		average		Number		average
	of		exercise		of		exercise		of		exercise
	options		price		options		price		options		price
Outstanding at beginning of year		5,153,898	$	3.951		5,870,309	$	3.770		6,952,293	$	3.363
Changes during the year:
Granted		900,000		2.370		1,909,000		1.72
Forfeited and Expired		44,201		6.833		277,016		5.395		1,514,957		3.748
Exercised (*)		139,388		0.446		550,000		0.972		553,125		0.067
Outstanding at end of year		5,870,309	$	3.770		6,952,293	$	3.363		4,884,211	$	3.617
Exercisable at end of year		4,905,559	$	3.933		4,477,043	$	4.182		3,498,492	$	4.296

(*)

The total intrinsic value of options exercised during the years ended December 31, 2014, 2015 and 2016, was approximately $447,000, $675,000 and $213,000, respectively.

Restricted stock granted to employees:

	Year ended December 31,
	2014		2015		2016
	Number of Restricted Shares
Outstanding at beginning of year		970,208		386,124		127,874
Changes during the year:
Vested		398,375		255,749		127,874
Forfeited		185,709		2,501
Outstanding at end of year		386,124		127,874		-

Options and restricted stocks granted to consultants, directors, and other service providers:

	Year ended December 31,
	2014				2015				2016
	Number				Number				Number
	of		Weighted		of		Weighted		of		Weighted
	options/		average		options/		average		options/		average
	restricted		exercise		restricted		exercise		restricted		exercise
	stock		price		stock		price		stock		price
Outstanding at beginning of Year		912,425	$	7.259		1,208,592	$	6.136		637,209	$	11.638
Changes during the year:
Granted		296,167		2.678
Expired						466,883		0.001		429,209		15.748
Vested restricted stock						104,500
Outstanding at end of year		1,208,592		6.136		637,209		11.638		208,000		3.156
Exercisable at end of year		912,425	$	7.259		549,709	$	12.954		170,500	$	3.109

The following tables summarize information concerning outstanding and exercisable options and restricted stock as of December 31, 2016:

December 31, 2016
Options
outstanding						Options exercisable
		Number of		Weighted				Weighted
		options		average				average
		outstanding		remaining		Number of		remaining
Exercise		at end of		contractual		options		contractual
prices		year		life		exercisable		life
$	0.001		8,000		0.86		8,000		0.86
$	1.720		1,784,279		8.22		792,310		8.22
$	2.350		40,000		1.81		40,000		1.81
$	2.370		900,000		7.74		506,250		7.74
$	2.650		212,682		2.15		212,682		2.15
$	3.020		50,000		1.10		50,000		1.10
$	3.370		150,000		7.56		112,500		7.56
$	5.000		1,009,250		1.10		1,009,250		1.10
$	6.900		710,000		3.15		710,000		3.15
$	7.550		160,000		3.65		160,000		3.65
$	9.660		68,000		3.83		68,000		3.83
			5,092,211				3,668,992

The following table illustrates the effect of share-based compensation on the statement of operations:

	Year ended December 31,
(U.S. dollars in thousands)	2014		2015		2016
Research and development expenses	$	936	$	904	$	571
Marketing, general and administrative expenses		306		898		417
	$	1,242	$	1,802	$	988

Private and 144A Offerings

On October 12, 2015, the Company completed a private offering of 5,649,079 shares of the Company’s common stock to Pfizer. See also note 2.

On December 7, 2016, the Company exchanged with certain existing noteholders $54.052 million aggregate principal amount of the Company’s outstanding 4.50% Convertible Senior Notes due 2018 for, among other consideration, $40.186 million aggregate principal amount of convertible notes due 2021 (as described in note 8b) and for 23,846,735 shares of common stock. See also note 8b.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

CONVERTIBLE NOTES

12 Months Ended

Dec. 31, 2016

CONVERTIBLE NOTES [Abstract]

CONVERTIBLE NOTES

NOTE 8 - CONVERTIBLE NOTES

4.5% Convertible Notes ("2013 Notes")

On September 18, 2013, the Company completed a private placement of $69.0 million in aggregate principal amount of Senior Convertible Notes (the “2013 Notes”), including $9.0 million aggregate principal amount of 2013 Notes related to the initial purchaser’s over-allotment option, which was exercised in full. In connection with the completion of the offering, the Company entered into an indenture with The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 2013 Notes. The 2013 Notes accrue interest at a rate of 4.50% per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2014. In December 2016, $54.052 million aggregate principal amount of 2013 Notes were exchanged for 2016 Notes and shares of common stock (see also note 8b). Accordingly, $14.948 million aggregate principal amount of 2013 Notes remain outstanding as of December 31, 2016. The 2013 Notes mature on September 15, 2018.

The net proceeds from the offering of the 2013 Notes were $66.8 million, after deducting the initial purchaser’s discount and commission and offering expenses.

Holders may convert their 2013 Notes at any time prior to the close of business on the business day immediately preceding September 15, 2018. The initial conversion rate for the 2013 Notes is 173.6593 shares of the Common Stock for each $1,000 principal amount of 2013 Notes (equivalent to an initial conversion price of approximately $5.76 per share of the Common Stock. Upon conversion, the Company will deliver a number of shares of Common Stock, per $1,000 principal amount of 2013 Notes, equal to the conversion rate. The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

Redemption of the 2013 Notes was prohibited prior to September 19, 2016, and no sinking fund is provided for the 2013 Notes. On or after September 19, 2016, the Company may redeem for cash all or part of the 2013 Notes (except for the notes that the Company is then required to repurchase in connection with a fundamental change) if the last reported sale price of the Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on the trading day immediately preceding the date on which the Company provides the notice of redemption. The redemption price will equal the sum of (i) 100% of the principal amount of the 2013 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date, plus (iii) the sum of the present values of each of the remaining scheduled payments of interest that would have been paid on the 2013 Notes being redeemed had such 2013 Notes remained outstanding from the redemption date to the maturity date.

The following table sets forth total interest expense recognized for the years ended December 31, 2014, 2015 and 2016 related to the 2013 Notes:

	Year ended December 31,
(U.S. Dollars in thousands)	2014		2015		2016
Contractual interest expense	$	3,105	$	3,105	$	2,943
Amortization of debt issuance costs and debt discount		444		444		421
Total	$	3,549	$	3,549	$	3,364

7.5% Convertible Notes ("2016 Notes")

On December 1, 2016, the Company entered into a note purchase agreement with institutional investors, which hold part of the 2013 Notes (the “Purchasers”), relating to the sale by the Company of $22.5 million aggregate principal amount of 7.50% Senior Secured Convertible Notes due 2021 in a private placement pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”). Concurrently with the consummation of the private placement of the 2016 Notes, the Company entered into a privately negotiated exchange agreement (the "Exchange Agreement") with certain existing noteholders identified therein to exchange $54.052 million aggregate principal amount of the Company’s outstanding 2013 Notes for (i) $40.186 million aggregate principal amount of 2016 Notes, (ii) 23,846,735 shares of Common Stock and (iii) cash, equal to the accrued and unpaid interest on the 2013 Notes and any fractional shares. The closing date of the purchase agreement and the Exchange Agreement was December 7, 2016. The issuance of the 2016 Notes and shares in the exchange and the private placement were made in reliance on the exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof.

In connection with the completion of the exchange and the private placement, the Company entered into an indenture (the “2016 Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee, governing the 2016 Notes. The 2016 Notes accrue interest at a rate of 7.50% per year, payable semiannually in arrears on May 15 and November 15 of each year, beginning on May 15, 2017. A portion of the interest payable may be made in shares of Common Stock at the Company’s election. The Notes will mature on November 15, 2021; provided that all of the then-outstanding 2013 Notes, or any Permitted Refinancing Indebtedness (as defined in the 2016 Indenture) have been redeemed, repurchased, otherwise retired, discharged in accordance with their terms or converted into common stock of the Company, or have been effectively discharged, in each case on or prior to June 16, 2018 or the scheduled maturity date of the 2013 Notes (or any Permitted Refinancing Indebtedness incurred in respect thereof) is extended to a date that is after February 15, 2022, otherwise the 2016 Notes will mature on June 15, 2018.

The net proceeds from the private placement were $19.7 million, after deducting the placement agent’s fees and the Company’s estimated offering expenses.

Holders may convert their 2016 Notes at any time. The initial conversion rate for the 2016 Notes is 1,176.4706 shares of the Common Stock for each $1,000 principal amount of 2016 Notes (equivalent to an initial conversion price of approximately $0.85 per share of the Common Stock. Upon conversion, the Company may settle the 2016 Notes by paying or delivering, as the case may be, cash, shares of Common Stock or a combination thereof, at the Company’s election.

Prior to the maturity date, the Company may redeem in cash:

any or all of the 2016 Notes if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days exceeds 150% of the conversion price on each applicable trading day, or

all of the 2016 Notes then outstanding if the aggregate principal amount of the 2016 Notes then outstanding is less than 15% of the aggregate principal amount of the notes issued.

The 2016 Notes are guaranteed by the Restricted Subsidiaries (as defined in the 2016 Indenture) and are secured by a first-priority security interest in all of the present and after-acquired assets of the Company and each of the Restricted Subsidiaries (the “Collateral”), including, but not limited to, (i) 100% of the capital stock of the Guarantors (as defined in the 2016 Indenture) and each Restricted Subsidiary of the Company that is held by the Company or any Restricted Subsidiary, (ii) intellectual property, including all copyrights, copyright licenses, patents, patent licenses, software, trademarks, trademark licenses and trade secrets and other proprietary information, including, but not limited to, domain names, (iii) all cash, deposit accounts, securities accounts, commodities accounts and contract rights, (iv) all real property and leased property, subject to applicable minimum thresholds, as set forth in the 2016 Indenture, and (v) all other tangible and intangibles of the Company and the Guarantors. In connection with the grant of such liens, the Company entered into certain agreements with both Wilmington Savings Fund Society, FSB, as collateral agent in the United States, and with Altshuler Shaham Trusts Ltd., as security trustee in Israel. The 2016 Indenture restricts the ability of the Company, the Subsidiaries and any future subsidiaries to make certain investments, including transfers of the Company’s assets that constitute collateral securing the 2016 Notes, in its existing and future foreign subsidiaries, subject to certain exceptions.

Upon (i) the occurrence of a fundamental change (as defined in the 2016 Indenture) or (ii) if the Company calls the 2016 Notes for redemption as described below (either event, a “make-whole fundamental change”) and a holder elects to convert its 2016 Notes in connection with such make-whole fundamental change, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares (the “Additional Shares”). In no event will the conversion rate exceed the maximum conversion rate, which is 1,787.3100 shares per $1,000 principal amount of 2016 Notes, which amount is inclusive of repayment of the principal of the 2016 Notes.

If a fundamental change occurs at any time, holders will have the right, at their option, to require the Company to purchase for cash any or all of the 2016 Notes, or any portion of the principal amount thereof, that is equal to $1,000 or an integral multiple of $1,000 in excess thereof, on a date of the Company’s choosing that is not less than 20 calendar days nor more than 35 calendar days after the date of the applicable fundamental change company notice. The price the Company is required to pay for a 2016 Note is equal to 100% of the principal amount of such 2016 Note plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date.

For accounting purposes, since the terms of the 2013 Notes and the 2016 Notes are substantially different, the Exchange Agreement was considered as an extinguishment, which in essence means recording a gain due to the 2013 Notes that were exchanged for the 2016 Notes recorded at fair value as of the closing date. The gain on extinguishment of $14.063 million was recognized.

As the settlement upon conversion is subject to compliance with the listing standards of NYSE MKT, until the Company’s stockholders’ approval will be obtained, the Company is prohibited by these rules from issuing shares in excess of 20% of its outstanding shares (calculated as of December 1, 2016). The accounting guidance assumes that the conversion will be settled in cash and, as such, is precluded from equity classification for any part of the 2016 Notes that may have cash settlement. As such, that part of the conversion feature is accounted for as a derivative which is bifurcated from the debt host contract and is measured at fair value through the statement of operations.

With respect to the remainder of the 2016 Notes, for which the conversion feature qualifies for equity classification (since upon conversion the Company at its election may settle the 2016 Notes by paying cash, shares of Common Stock or a combination of cash and shares of Common Stock) separate liability (debt) and equity (conversion option) components of such 2016 Notes were recorded. The Company measured the liability according to amortized cost using the effective interest method.

The Company prepared a valuation of the fair value of the 2016 Notes (a Level 3 valuation). The value of the 2016 Notes was estimated by implementing the binomial model. The liability component was valued based on the Income Approach. The following parameters were used:

(U.S. Dollars in thousands)	December 7, 2016			December 31, 2016
Stock price (USD)		0.3			0.445
Expected term		4.94			4.88
Risk free rate		1.86	%		1.95	%
Volatility		54.12	%		56.08	%
Yield		13.98	%

The following table sets forth total interest expense recognized for the year ended December 31, 2016 related to the 2016 Notes:

(U.S. Dollars in thousands)	Year Ended December 31, 2016
Contractual interest expense	$	313
Debt discount amortization		147
Gain on extinguishment		(14,063)
Change in fair value of convertible note embedded derivative		6,473
Total	$	(7,130)

FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2016

FAIR VALUE MEASUREMENT [Abstract]

FAIR VALUE MEASUREMENT

NOTE 9 - FAIR VALUE MEASUREMENT

The Company 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.

The fair value of the convertible notes derivative is based on level 3 measurement.

The fair value of the remaining $14.9 million 2013 Notes and the $62.7 million 2016 Notes as of December 31, 2016 is approximately $10 million and $64 million, respectively, based on a level 3 measurement.

As for the parameters used in the valuation of the fair value see note 8b.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

TAXES ON INCOME

12 Months Ended

Dec. 31, 2016

TAXES ON INCOME [Abstract]

TAXES ON INCOME

NOTE 10 - TAXES ON INCOME

The Company

Protalix BioTherapeutics, Inc. is taxed according to U.S. tax laws. The Company’s income is taxed in the United States at the rate of up to 39%.

Protalix Ltd.

The Israeli Subsidiary is taxed according to Israeli tax laws:

Tax rates

The income of the Israeli Subsidiary, other than income from “Approved Enterprises,” is taxed in Israel at the regular corporate tax rates which were 26.5% for fiscal year 2014 through 2015 and 25% in 2016.

In January 2016, the Law for the Amendment of the Income Tax Ordinance (No.216) was published, enacting a reduction of corporate tax rate beginning in 2016 and thereafter, from 26.5% to 25%. There is no impact on the financial statements of the Company as a result of the changes in the Israeli corporate tax rate as the Israeli subsidiary is in a loss position for tax purposes.

In December 2016, the Economic Efficiency Law (Legislative Amendments for Implementing the Economic Policy for the 2017 and 2018 Budget Year), 2016 was published, introducing a gradual reduction in corporate tax rate from 25% to 23%. However, the law also included a temporary provision setting the corporate tax rate in 2017 at 24%. As a result, the corporate tax rate will be 24% in 2017 and 23% in 2018 and thereafter.

Capital gain is subject to capital gain tax according to the corporate tax rate for the year during which the assets are sold.

The Law for the Encouragement of Capital Investments, 1959 (the “Encouragement of Capital Investments Law”)

Under the Encouragement of Capital Investments Law, including Amendment No. 60 to the Encouragement of Capital Investments Law as published in April 2005, by virtue of the “Approved Enterprise” or “Benefited Enterprise” status the Israeli Subsidiary is entitled to various tax benefits as follows:

Reduced tax rates

Income derived from the Approved Enterprise during a 10-year period commencing upon the year in which the enterprise first realizes taxable income is tax exempt, provided that the maximum period to which it is restricted by the Encouragement of Capital Investments Law has not elapsed.

The Israeli Subsidiary has an “Approved Enterprise” plan since 2004 and “Benefited Enterprise” plan since 2009. The period of benefits in respect of the main enterprise of the Company has not yet commenced. The period during which the Company is entitled to benefits in connection with the Benefited Enterprise expires in 2021.

If the Israeli Subsidiary subsequently pays a dividend out of income derived from the “Approved Enterprise” or “Benefited Enterprise” during the tax exemption period, it will be subject to a tax on the gross amount distributed (including the company tax on these amounts), at the rate which would have been applicable had such income not been exempted.

Accelerated depreciation

The Israeli Subsidiary is entitled to claim accelerated depreciation, as provided by Israeli law, in the first five years of operation of each asset, in respect of buildings, machinery and equipment used by the Approved Enterprise and the Benefited Enterprise.

Conditions for entitlement to the benefits

The Israeli Subsidiary’s entitlement to the benefits described above is subject to its fulfilling the conditions stipulated by the law, rules and regulations published thereunder, and the instruments of approval for the specific investment in an approved enterprise. Failure by the Israeli Subsidiary to comply with these conditions may result in the cancellation of the benefits, in whole or in part, and the Subsidiary may be required to refund the amount of the benefits with interest. The Israeli Subsidiary received a final implementation approval with respect to its “Approved Enterprise” from the Investment Center.

Amendment of the Law for the Encouragement of Capital Investments, 1959

The Encouragement of Capital Investments Law was amended as part of the Economic Policy Law for the years 2011-2012, which was passed by the Israeli Knesset on December 29, 2010 (the “Capital Investments Law Amendment”).

The Capital Investments Law Amendment sets alternative benefit tracks to those currently in effect under the provisions of the Encouragement of Capital Investments Law.

The Company elected not to have the Capital Investments Law Amendment apply to the Company.

Tax losses carried forward to future years

As of December 31, 2016, the Company had aggregate net operating loss (“NOL”) carry-forwards equal to approximately $153 million that are available to reduce future taxable income as follows:

The Company

The NOL carry-forward of the Company equal to approximately $20 million (as of December 31, 2015, approximately $19 million) may be restricted under Section 382 of the Internal Revenue Code (“IRC”). IRC Section 382 applies whenever a corporation with NOL experiences an ownership change. As a result of IRC Section 382, the taxable income for any post change year that may be offset by a pre-change NOL may not exceed the general IRC Section 382 limitation, which is the fair market value of the pre-change entity multiplied by the IRC long-term tax exempt rate.

Protalix Ltd.

At December 31, 2016, the Israeli Subsidiary had approximately $133 million (as of December 31, 2015, approximately $102 million) of NOL carry-forwards that are available to reduce future taxable income with no limited period of use.

Deferred income taxes:

The components of the Company’s net deferred tax assets at December 31, 2015 and 2016 were as follows:

	December 31,
(U.S. dollars in thousands)	2015		2016
In respect of:
Timing Differences	$	3,588	$	3,520
Net operating loss carry forwards		33,451		38,515
Valuation allowance		(37,039)		(42,035)
		-		-

Deferred taxes are computed using the tax rates expected to be in effect when those differences reverse.

Reconciliation of the theoretical tax expense to actual tax expense

The main reconciling item between the statutory tax rate of the Company and the effective rate is the provision for a full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits (see above).

Tax assessments

In accordance with the Income Tax Ordinance, as of December 31, 2016, all of Protalix Ltd.’s tax assessments through tax year 2012 are considered final.

A summary of open tax years by major jurisdiction is presented below:

Jurisdiction:		Years:
Israel		2013-2016
United States (*)		2013-2016

(*) Includes federal, state and local (or similar provincial jurisdictions) tax positions.

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

12 Months Ended

Dec. 31, 2016

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION [Abstract]

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

NOTE 11 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

Balance sheets:

	December 31,
(U.S. dollars in thousands)	2015		2016
a. Other assets:
Institutions	$	216	$	333
State of Israel (see note 6a)		621		1,046
Restricted deposit		371		477
Prepaid expenses		408		416
Sundry		51		49
	$	1,667	$	2,321

	December 31,
(U.S. dollars in thousands)	2015		2016
b. Accounts payable and accruals – other:
Payroll and related expenses		1,125		1,190
Interest payable		914		511
Provision for vacation		1,406		1,399
Accrued expenses		1,571		3,575
Royalties payable		29		226
Property and equipment suppliers		489		595
	$	5,534	$	7,496

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 12 - DISCONTINUED OPERATIONS

As mentioned in note 2, the Company accounted for the termination of the Pfizer Agreement and the sale of the license as a discontinued operation, in accordance with ASU No. 2014-08. The following assets and liabilities associated with the Company’s discontinued operations, have been segregated and classified as assets and liabilities of discontinued operations, as appropriate, in the consolidated balance sheets as of December 31, 2015 and 2016, respectively:

	December 31,
(U.S. dollars in thousands)	2015		2016
CURRENT ASSETS:
Accounts receivable - Trade	$	1,993	$	327
Inventories		80
Total current assets of discontinued operation		2,073		327

CURRENT LIABILITIES:
Other Accounts payable and accruals	$	1,568
Total current liabilities of discontinued operation		1,568

The following summarizes financial information related to the Company’s discontinued operations, in the Company’s consolidated statements of operations:

	Year ended December 31,
	2014		2015		2016
(U.S. dollars in thousands)
REVENUES	$	10,128	$	48,674	$	209
COMPANY’S SHARE IN COLLABORATION AGREEMENT		1,509		5,048
COST OF REVENUES		(8,423)		(7,697)		(373)
GROSS PROFIT (LOSS)		3,214		46,025		(164)
RESEARCH AND DEVELOPMENT EXPENSES		(2,409)		(586)
Less –reimbursements		2,983		545
RESEARCH AND DEVELOPMENT EXPENSES, NET		574		(41)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		(433)		(564)		(25)
NET INCOME (LOSS) FOR THE YEAR FROM DISCONTINUED OPERATIONS	$	3,355	$	45,420	$	(189)
GAIN ON THE DISPOSAL				39,899
NET INCOME (LOSS)	$	3,355	$	85,319	$	(189)

- Definition

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

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+ Details

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2016

RELATED PARTY TRANSACTIONS

NOTE 13 - RELATED PARTY TRANSACTIONS

	Year ended December 31,
(U.S. dollars in thousands)	2014		2015		2016
Compensation (including share based compensation) to the non-executive directors (includes the interim Chairman of the Board through 2014 and the Chairman of the Board for part of 2014)	$	560	$	631	$	560

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2016

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

General

General

The Company’s product pipeline currently includes, among other candidates:

(1) PRX-102, or alpha-GAL-A, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder;

(2) PRX-110, a proprietary plant cell recombinant human Deoxyribonuclease 1, or DNase, under development for the treatment of cystic fibrosis, to be administered by inhalation; and

Basis of presentation

Basis of presentation

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

Use of estimates in the preparation of financial statements

Use of estimates in the preparation of financial statements

Functional currency

Functional currency

Cash equivalents

Cash equivalents

Inventories

Inventories

Inventories are valued at the lower of cost or market. Cost of raw and packaging materials and purchased products is determined using the “moving average” basis.

Inventory is written down for estimated obsolescence based upon management assumptions about future demand and market conditions.

Property and equipment

Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization.

The Company’s assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:

	Years
Laboratory equipment		5
Furniture		10-15
Computer equipment		3

Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements.

Impairment in value of long-lived assets

Impairment in value of long-lived assets

Income taxes

Income taxes

Deferred income taxes

Uncertainty in income taxes

Revenue Recognition

Revenue Recognition

Revenues from supply agreements and from selling products

The Company recognizes revenues from supply agreements and from selling products upon delivery, when the sales price is fixed or determinable and collectability is reasonably assured.

Research and development costs

Research and development costs

Concentration of credit risks and trade receivable

Concentration of credit risks and trade receivable

The Company’s trade receivables represent amounts to be received from Pfizer and Brazil. The Company does not require Pfizer or Brazil to post collateral with respect to receivables.

Share-based compensation

Share-based compensation

Net earnings (loss) per share

Net earnings (loss) per share

Convertible notes

Convertible notes

The debt discount and debt issuance costs regarding the issuance of the 2013 Notes are deferred and amortized over the 2013 Notes period (5 years).

Recently adopted standards

Recently adopted standards

The Company adopted this standard in the fourth quarter of 2016. The implementation of this ASU did not have a material impact on the consolidated financial statements.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2016

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Schedule of Useful Life

The Company’s assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:

	Years
Laboratory equipment		5
Furniture		10-15
Computer equipment		3

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2016

PROPERTY AND EQUIPMENT [Abstract]

Schedule of Property and Equipment

Composition of property and equipment grouped by major classifications is as follows:

	December 31,
(U.S. dollars in thousands)	2015		2016
Laboratory equipment	$	15,493	$	16,265
Furniture and computer equipment		2,244		2,342
Leasehold improvements		15,635		15,678
Equipment under construction		175		19
	$	33,547	$	34,304
Less – accumulated depreciation
and amortization		(23,803)		(25,601)
	$	9,744	$	8,703

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2016

INVENTORIES [Abstract]

Schedule of Inventory

Inventories at December 31, 2015 and 2016 consisted of the following:

	December 31,
(U.S. dollars in thousands)	2015		2016
Raw materials	$	1,180	$	2,591
Work in progress				395
Finished goods		4,587		2,259
Total inventory	$	5,767	$	5,245

SHARE CAPITAL (Tables)

12 Months Ended

Dec. 31, 2016

SHARE CAPITAL [Abstract]

Schedule of Options and Restricted Stocks Granted

Below is a table summarizing all of the options and restricted stock grants to employees for each year of the two-year period ended December 31, 2015:

							Fair value
							at grant
							(U.S.
Year of	No. of options		Exercise				dollars in		Expiration
grant	granted		price		Vesting period		thousands)		period
2014		900,000	$	2.37		4 years	$	1,007		10 years
2015		1,909,000	$	1.72		4 years	$	1,900		10 years
		2,809,000

Summary of Stock Option Activity - Options Granted to Employees

Options granted to employees:

	Year ended December 31,
	2014				2015				2016
			Weighted				Weighted				Weighted
	Number		average		Number		average		Number		average
	of		exercise		of		exercise		of		exercise
	options		price		options		price		options		price
Outstanding at beginning of year		5,153,898	$	3.951		5,870,309	$	3.770		6,952,293	$	3.363
Changes during the year:
Granted		900,000		2.370		1,909,000		1.72
Forfeited and Expired		44,201		6.833		277,016		5.395		1,514,957		3.748
Exercised (*)		139,388		0.446		550,000		0.972		553,125		0.067
Outstanding at end of year		5,870,309	$	3.770		6,952,293	$	3.363		4,884,211	$	3.617
Exercisable at end of year		4,905,559	$	3.933		4,477,043	$	4.182		3,498,492	$	4.296

(*)

The total intrinsic value of options exercised during the years ended December 31, 2014, 2015 and 2016, was approximately $447,000, $675,000 and $213,000, respectively.

Summary of Restricted Stock Activity - Options Granted to Employees

Restricted stock granted to employees:

	Year ended December 31,
	2014		2015		2016
	Number of Restricted Shares
Outstanding at beginning of year		970,208		386,124		127,874
Changes during the year:
Vested		398,375		255,749		127,874
Forfeited		185,709		2,501
Outstanding at end of year		386,124		127,874		-

Schedule of Options Granted to Service Providers

Options and restricted stocks granted to consultants, directors, and other service providers:

	Year ended December 31,
	2014				2015				2016
	Number				Number				Number
	of		Weighted		of		Weighted		of		Weighted
	options/		average		options/		average		options/		average
	restricted		exercise		restricted		exercise		restricted		exercise
	stock		price		stock		price		stock		price
Outstanding at beginning of Year		912,425	$	7.259		1,208,592	$	6.136		637,209	$	11.638
Changes during the year:
Granted		296,167		2.678
Expired						466,883		0.001		429,209		15.748
Vested restricted stock						104,500
Outstanding at end of year		1,208,592		6.136		637,209		11.638		208,000		3.156
Exercisable at end of year		912,425	$	7.259		549,709	$	12.954		170,500	$	3.109

Schedule of Information about Share Options Outstanding

The following tables summarize information concerning outstanding and exercisable options and restricted stock as of December 31, 2016:

December 31, 2016
Options
outstanding						Options exercisable
		Number of		Weighted				Weighted
		options		average				average
		outstanding		remaining		Number of		remaining
Exercise		at end of		contractual		options		contractual
prices		year		life		exercisable		life
$	0.001		8,000		0.86		8,000		0.86
$	1.720		1,784,279		8.22		792,310		8.22
$	2.350		40,000		1.81		40,000		1.81
$	2.370		900,000		7.74		506,250		7.74
$	2.650		212,682		2.15		212,682		2.15
$	3.020		50,000		1.10		50,000		1.10
$	3.370		150,000		7.56		112,500		7.56
$	5.000		1,009,250		1.10		1,009,250		1.10
$	6.900		710,000		3.15		710,000		3.15
$	7.550		160,000		3.65		160,000		3.65
$	9.660		68,000		3.83		68,000		3.83
			5,092,211				3,668,992

Schedule of Stock-Based Compensation Expense in Statement of Operations

The following table illustrates the effect of share-based compensation on the statement of operations:

	Year ended December 31,
(U.S. dollars in thousands)	2014		2015		2016
Research and development expenses	$	936	$	904	$	571
Marketing, general and administrative expenses		306		898		417
	$	1,242	$	1,802	$	988

CONVERTIBLE NOTES (Tables)

12 Months Ended

Dec. 31, 2016

CONVERTIBLE NOTES [Abstract]

Schedule of Interest Expense Recognized

The following table sets forth total interest expense recognized for the years ended December 31, 2014, 2015 and 2016 related to the 2013 Notes:

	Year ended December 31,
(U.S. Dollars in thousands)	2014		2015		2016
Contractual interest expense	$	3,105	$	3,105	$	2,943
Amortization of debt issuance costs and debt discount		444		444		421
Total	$	3,549	$	3,549	$	3,364

Fair Value Measurements, Recurring and Nonrecurring

(U.S. Dollars in thousands)	December 7, 2016			December 31, 2016
Stock price (USD)		0.3			0.445
Expected term		4.94			4.88
Risk free rate		1.86	%		1.95	%
Volatility		54.12	%		56.08	%
Yield		13.98	%

Schedule of Debt

The following table sets forth total interest expense recognized for the year ended December 31, 2016 related to the 2016 Notes:

(U.S. Dollars in thousands)	Year Ended December 31, 2016
Contractual interest expense	$	313
Debt discount amortization		147
Gain on extinguishment		(14,063)
Change in fair value of convertible note embedded derivative		6,473
Total	$	(7,130)

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

TAXES ON INCOME (Tables)

12 Months Ended

Dec. 31, 2016

TAXES ON INCOME [Abstract]

Schedule of Deferred Tax Assets

The components of the Company’s net deferred tax assets at December 31, 2015 and 2016 were as follows:

	December 31,
(U.S. dollars in thousands)	2015		2016
In respect of:
Timing Differences	$	3,588	$	3,520
Net operating loss carry forwards		33,451		38,515
Valuation allowance		(37,039)		(42,035)
		-		-

Schedule of Open Tax Years

A summary of open tax years by major jurisdiction is presented below:

Jurisdiction:		Years:
Israel		2013-2016
United States (*)		2013-2016

(*) Includes federal, state and local (or similar provincial jurisdictions) tax positions.

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2016

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION [Abstract]

Supplemental Information, Balance Sheets

Balance sheets:

	December 31,
(U.S. dollars in thousands)	2015		2016
a. Other assets:
Institutions	$	216	$	333
State of Israel (see note 6a)		621		1,046
Restricted deposit		371		477
Prepaid expenses		408		416
Sundry		51		49
	$	1,667	$	2,321

	December 31,
(U.S. dollars in thousands)	2015		2016
b. Accounts payable and accruals – other:
Payroll and related expenses		1,125		1,190
Interest payable		914		511
Provision for vacation		1,406		1,399
Accrued expenses		1,571		3,575
Royalties payable		29		226
Property and equipment suppliers		489		595
	$	5,534	$	7,496

DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

The following assets and liabilities associated with the Company’s discontinued operations, have been segregated and classified as assets and liabilities of discontinued operations, as appropriate, in the consolidated balance sheets as of December 31, 2015 and 2016, respectively:

	December 31,
(U.S. dollars in thousands)	2015		2016
CURRENT ASSETS:
Accounts receivable - Trade	$	1,993	$	327
Inventories		80
Total current assets of discontinued operation		2,073		327

CURRENT LIABILITIES:
Other Accounts payable and accruals	$	1,568
Total current liabilities of discontinued operation		1,568

The following summarizes financial information related to the Company’s discontinued operations, in the Company’s consolidated statements of operations:

	Year ended December 31,
	2014		2015		2016
(U.S. dollars in thousands)
REVENUES	$	10,128	$	48,674	$	209
COMPANY’S SHARE IN COLLABORATION AGREEMENT		1,509		5,048
COST OF REVENUES		(8,423)		(7,697)		(373)
GROSS PROFIT (LOSS)		3,214		46,025		(164)
RESEARCH AND DEVELOPMENT EXPENSES		(2,409)		(586)
Less –reimbursements		2,983		545
RESEARCH AND DEVELOPMENT EXPENSES, NET		574		(41)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		(433)		(564)		(25)
NET INCOME (LOSS) FOR THE YEAR FROM DISCONTINUED OPERATIONS	$	3,355	$	45,420	$	(189)
GAIN ON THE DISPOSAL				39,899
NET INCOME (LOSS)	$	3,355	$	85,319	$	(189)

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=65878427&loc=SL51721533-107759

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721665-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1474-107760

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1361-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721683-107760

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=64862545&loc=SL51724579-110230

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5C
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721675-107760

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721663-107760

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=64862545&loc=d3e2941-110230

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5B
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721673-107760

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721659-107760

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721671-107760

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721677-107760

+ Details

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Related Party Transactions

	Year ended December 31,
(U.S. dollars in thousands)	2014		2015		2016
Compensation (including share based compensation) to the non-executive directors (includes the interim Chairman of the Board through 2014 and the Chairman of the Board for part of 2014)	$	560	$	631	$	560

SIGNIFICANT ACCOUNTING POLICIES (Useful Lives of Property and Equipment) (Details)	12 Months Ended
	Dec. 31, 2016
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	5 years
Furniture [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	10 years
Furniture [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	15 years
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years

SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Significant Accounting Policies [Line Items]
Common Stock, Par or Stated Value Per Share		$ 0.001	$ 0.001
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		23,532,492	19,778,424	18,850,724
Revenues, Total		$ 9,199	$ 4,364	$ 3,523
Tax Rate Assumption Related To Deferred Tax Difference Reversal		The Company used tax rates of 39%, 24% and 23%.
Brazil [Member]
Significant Accounting Policies [Line Items]
Percentage of Adult Gaucher Patients Treated with Uplyso		10.00%
Brazil Agreement [Member]
Significant Accounting Policies [Line Items]
Revenues, Total		$ 4,000
Supply Commitment In Year 2017		$ 24,300
Brazil Agreement [Member] \| Subsidiaries [Member] \| Fiocruz [Member]
Significant Accounting Policies [Line Items]
Agent Fee, Percentage Of Net Proceeds		5.00%
Pfizer Agreement [Member]
Significant Accounting Policies [Line Items]
Proceeds From Exchange For Rights To Royalties	$ 36,000
Pfizer Agreement [Member] \| Pfizer Incorporation [Member]
Significant Accounting Policies [Line Items]
Collaborative Arrangement Revenues and Expenses Sharing Percentage	60.00%
Pfizer Agreement [Member] \| Protalix Bio Therapeutics Incorporation [Member]
Significant Accounting Policies [Line Items]
Collaborative Arrangement Revenues and Expenses Sharing Percentage	40.00%
Amended Pfizer Agreement [Member] \| Protalix Bio Therapeutics Incorporation [Member] \| Brazil [Member]
Significant Accounting Policies [Line Items]
Collaborative Arrangement Revenues and Expenses Sharing Percentage	100.00%

AGREEMENTS WITH PFIZER (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended		12 Months Ended
	Oct. 31, 2015	Nov. 30, 2009	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2012	Oct. 12, 2015
Revenue Recognized Over Designated Period				$ 4.6
Proceeds from Collaborators		$ 60.0
Milestone Payment	$ 25.0
Revenue Recognition, Multiple-deliverable Arrangements, Performance Period			14 years
Protalix Bio Therapeutics Incorporation [Member]
Collaborative Arrangement Profit Share Percentage	40.00%
Collaboration Operation [Member]
Accrued Liabilities						$ 4.3
Pfizer [Member]
Stock Issued During Period, Shares, New Issues	5,649,079
Debt Instrument, Face Amount	$ 4.3
Fair Value, Net Asset (Liability), Total	46.0
Equity, Fair Value Disclosure, Total	6.1
Indefinite-lived Intangible Assets (Excluding Goodwill), Fair Value Disclosure	39.9
Upon Filing of Pediatric Investigation Plan to EMA [Member]
Proceeds from Collaborators	$ 5.0		$ 5.0
Upon FDAApproval [Member]
Milestone Payment					$ 25.0

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 34,304	$ 33,547
Less - accumulated depreciation and amortization	(25,601)	(23,803)
Property, Plant and Equipment, Net	8,703	9,744
Depreciation	1,983	2,370	$ 3,140
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	16,265	15,493
Furniture And Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,342	2,244
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	15,678	15,635
Equipment Under Construction [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 19	$ 175

INVENTORIES (Details) - USD ($)	12 Months Ended
INVENTORIES (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Raw materials	$ 2,591,000	$ 1,180,000
Work in progress	395,000	0
Finished goods	2,259,000	4,587,000
Total inventory	5,245,000	5,767,000
Inventory Write-down	$ 67,000	$ 1,300,000

LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Employee severance obligation payments	$ 164,000	$ 168,000	$ 195,000
Contributions	675,000	675,000	779,000
Expected severance liabilities payments for fiscal year end 2016	869,000
Expected contribution to one or more Contribution Plans	708,000
Severance expense	842,000	800,000	1,000,000
Net gain (loss) for the period	(7,000)	$ (18,000)	$ 22,000
Benefits Payable During Next Five Years	$ 209,000

COMMITMENTS (Narrative) (Details) - USD ($)	12 Months Ended
COMMITMENTS (Narrative) (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Commitments And Contingencies [Line Items]
Subcontracting commitment amount	$ 12,500,000
Milestone Potential Payable	8,400,000
Milestone Payment, Amount Paid	300,000
OCS [Member]
Commitments And Contingencies [Line Items]
Royalty expense included in cost of revenue	288,000	$ 2,200,000	$ 951,000
Research And License Agreements [Member]
Commitments And Contingencies [Line Items]
Royalty expense included in cost of revenue	286,000	51,000	104,000
Lease Agreements [Member]
Commitments And Contingencies [Line Items]
Monthly rent/lease expense	61,000
Future minimum lease payments, 2017	735,000
Future minimum lease payments, 2018	722,000
Future minimum lease payments, 2019	680,000
Future minimum lease payments, 2020	680,000
Cash deposited as bank guarantee	288,000
Lease/rent expense	1,000,000	1,000,000	$ 1,000,000
Future minimum lease payments, 2021	543,000
Vehicle Lease And Maintenance Agreements [Member]
Commitments And Contingencies [Line Items]
Monthly rent/lease expense	51,000
Future minimum lease payments, 2017	563,000
Future minimum lease payments, 2018	289,000
Future minimum lease payments, 2019	$ 84,000
Minimum [Member] \| OCS [Member]
Commitments And Contingencies [Line Items]
Royalties based on sale of products developed from funded projects, percentage	3.00%
Maximum [Member] \| OCS [Member]
Commitments And Contingencies [Line Items]
Royalties based on sale of products developed from funded projects, percentage	6.00%
Accrued royalties	$ 38,500,000	$ 33,300,000
Percentage amount the aggregate amount of royalties that should not exceed grant received	100.00%	100.00%
Maximum [Member] \| Products Manufactured Outside Of Israel [Member]
Commitments And Contingencies [Line Items]
Royalties based on sale of products developed from funded projects, percentage	300.00%

SHARE CAPITAL (Summary of Option and Restricted Stock Granted to Employees) (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares shares
Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options or restricted stock granted	2,809,000
2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price \| $ / shares	$ 2.37
Vesting period	4 years
Fair value of at grant date \| $	$ 1,007
Expiration period	10 years
2014 [Member] \| Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options or restricted stock granted	900,000
2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price \| $ / shares	$ 1.72
Vesting period	4 years
Fair value of at grant date \| $	$ 1,900
Expiration period	10 years
2015 [Member] \| Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options or restricted stock granted	1,909,000

SHARE CAPITAL (Options Granted to Employees) (Details) - Options And Restricted Stock Granted To Employees [Member] - USD ($)

12 Months Ended

Dec. 31, 2016

Dec. 31, 2015

Dec. 31, 2014

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Intrinsic value of options exercised

$ 213,000

$ 675,000

$ 447,000

Number of options

Outstanding at beginning of year

6,952,293

5,870,309

5,153,898

Granted

1,909,000

900,000

Forfeited and Expired

1,514,957

277,016

44,201

Exercised

^[1]

553,125

550,000

139,388

Outstanding at end of year

4,884,211

6,952,293

5,870,309

Exercisable at end of year

3,498,492

4,477,043

4,905,559

Weighted average exercise price

Outstanding at beginning of year

$ 3.363

$ 3.770

$ 3.951

Granted

1.72

2.370

Forfeited and Expired

3.748

5.395

6.833

Exercised

^[1]

0.067

0.972

0.446

Outstanding at end of year

3.617

3.363

3.770

Exercisable at end of year

$ 4.296

$ 4.182

$ 3.933

[1]	The total intrinsic value of options exercised during the years ended December 31, 2014, 2015 and 2016, was approximately $447,000, $675,000 and $213,000, respectively.

SHARE CAPITAL (Restricted Stock Granted to Employees) (Details) - Employees [Member] - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at beginning of year	127,874	386,124	970,208
Vested	127,874	255,749	398,375
Forfeited		2,501	185,709
Outstanding at end of year	0	127,874	386,124

SHARE CAPITAL (Options and Restricted Stocks Granted to Consultants, Directors and Other Service Providers) (Details) - Options and Restricted Stocks Granted To Consultants Directors And Other Service Providers [Member] - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of options
Outstanding at beginning of year	637,209	1,208,592	912,425
Granted			296,167
Expired	429,209	466,883
Vested restricted stock		104,500
Outstanding at end of year	208,000	637,209	1,208,592
Exercisable at end of year	170,500	549,709	912,425
Weighted average exercise price
Outstanding at beginning of year	$ 11.638	$ 6.136	$ 7.259
Granted			2.678
Expired	15.748	0.001
Outstanding at end of year	3.156	11.638	6.136
Exercisable at end of year	$ 3.109	$ 12.954	$ 7.259

SHARE CAPITAL (Summary of Outstanding and Restricted Stocks) (Details) - Options and Restricted Stock [Member]	12 Months Ended
	Dec. 31, 2016 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of options and restricted stock outstanding at end of year	5,092,211
Number of options exercisable at end of year	3,668,992
0.001 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 0.001
Number of options and restricted stock outstanding at end of year	8,000
Weighted average remaining contractual life	10 months 10 days
Number of options exercisable at end of year	8,000
Weighted average remaining contractual life, exercisable	10 months 10 days
1.720 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 1.720
Number of options and restricted stock outstanding at end of year	1,784,279
Weighted average remaining contractual life	8 years 2 months 19 days
Number of options exercisable at end of year	792,310
Weighted average remaining contractual life, exercisable	8 years 2 months 19 days
2.350 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 2.350
Number of options and restricted stock outstanding at end of year	40,000
Weighted average remaining contractual life	1 year 9 months 22 days
Number of options exercisable at end of year	40,000
Weighted average remaining contractual life, exercisable	1 year 9 months 22 days
2.370 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 2.370
Number of options and restricted stock outstanding at end of year	900,000
Weighted average remaining contractual life	7 years 8 months 26 days
Number of options exercisable at end of year	506,250
Weighted average remaining contractual life, exercisable	7 years 8 months 26 days
2.650 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 2.650
Number of options and restricted stock outstanding at end of year	212,682
Weighted average remaining contractual life	2 years 1 month 24 days
Number of options exercisable at end of year	212,682
Weighted average remaining contractual life, exercisable	2 years 1 month 24 days
3.020 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 3.020
Number of options and restricted stock outstanding at end of year	50,000
Weighted average remaining contractual life	1 year 1 month 6 days
Number of options exercisable at end of year	50,000
Weighted average remaining contractual life, exercisable	1 year 1 month 6 days
3.370 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 3.370
Number of options and restricted stock outstanding at end of year	150,000
Weighted average remaining contractual life	7 years 6 months 22 days
Number of options exercisable at end of year	112,500
Weighted average remaining contractual life, exercisable	7 years 6 months 22 days
5.000 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 5.000
Number of options and restricted stock outstanding at end of year	1,009,250
Weighted average remaining contractual life	1 year 1 month 6 days
Number of options exercisable at end of year	1,009,250
Weighted average remaining contractual life, exercisable	1 year 1 month 6 days
6.900 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 6.900
Number of options and restricted stock outstanding at end of year	710,000
Weighted average remaining contractual life	3 years 1 month 24 days
Number of options exercisable at end of year	710,000
Weighted average remaining contractual life, exercisable	3 years 1 month 24 days
7.550 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 7.550
Number of options and restricted stock outstanding at end of year	160,000
Weighted average remaining contractual life	3 years 7 months 24 days
Number of options exercisable at end of year	160,000
Weighted average remaining contractual life, exercisable	3 years 7 months 24 days
9.660 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price \| $ / shares	$ 9.660
Number of options and restricted stock outstanding at end of year	68,000
Weighted average remaining contractual life	3 years 9 months 29 days
Number of options exercisable at end of year	68,000
Weighted average remaining contractual life, exercisable	3 years 9 months 29 days

SHARE CAPITAL (Share Based Compensation Expense Allocation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 988	$ 1,802	$ 1,242
Research and Development Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	571	904	936
Marketing, General and administrative expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 417	$ 898	$ 306

SHARE CAPITAL (Narrative) (Details)

1 Months Ended

12 Months Ended

Dec. 07, 2016

USD ($)

Oct. 12, 2015

Mar. 23, 2015

USD ($)

$ / shares

Sep. 28, 2014

USD ($)

$ / shares

Jul. 24, 2014

USD ($)

$ / shares

Dec. 31, 2016

USD ($)

Dec. 31, 2015

USD ($)

Dec. 31, 2014

USD ($)

Dec. 14, 2006

^[1]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Common stock available for issuance | shares

2,391,481

13,841,655

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | shares

1,909,000

Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total

$ 509,000

Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition

9 months 18 days

Proceeds from Stock Options Exercised

$ 14,000

$ 534,000

$ 46,000

Debt Conversion, Converted Instrument, Shares Issued | shares

23,846,735

Four Point Five Percentage Convertible Notes [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Debt Instrument, Interest Rate, Stated Percentage

4.50%

Debt Conversion, Converted Instrument, Amount

$ 54,052,000

Convertible Notes Due Two Thousand Twenty One [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Debt Conversion, Converted Instrument, Amount

$ 40,186,000

Common Stock [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Common stock issued | shares

5,649,079

23,846,735

5,649,079

Option to purchase shares of common stock [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period

10 years

Share Based Compensation Arrangement By Share Based Payment Award Grant Date Fair Value

$ 1,900,000

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate

0.00%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate

61.70%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate

1.60%

Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares

$ 1.72

Option to purchase shares of common stock [Member] | President and Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options or restricted stock granted | shares

900,000

Exercise price | $ / shares

$ 2.37

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period

10 years

Share Based Compensation Arrangement By Share Based Payment Award Grant Date Fair Value

$ 1,000,000

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate

0.00%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate

62.00%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate

1.86%

Share Based Compensation Arrangement By Share Based Payment Award Number Of Installments For Vesting Period

Option to purchase shares of common stock [Member] | Board of Directors Chairman [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options or restricted stock granted | shares

150,000

Exercise price | $ / shares

$ 3.37

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period

10 years

Share Based Compensation Arrangement By Share Based Payment Award Grant Date Fair Value

$ 193,000

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate

0.00%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate

62.00%

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate

1.90%

Option to purchase shares of common stock [Member] | Vest on the first anniversary of the grant date [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

25.00%

[1]	The total intrinsic value of options exercised during the years ended December 31, 2014, 2015 and 2016, was approximately $447,000, $675,000 and $213,000, respectively.

CONVERTIBLE NOTES (Schedule of Interest Expense Recognized) (Details) - 2013 Notes [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Contractual interest expense	$ 2,943	$ 3,105	$ 3,105
Amortization of debt issuance costs and debt discount	421	444	444
Total	$ 3,364	$ 3,549	$ 3,549

CONVERTIBLE NOTES (Fair Value Income Approach) (Details) - $ / shares		1 Months Ended
	Dec. 07, 2016	Dec. 31, 2016
Stock price (USD)	$ 0.3	$ 0.445
Expected term	4 years 11 months 8 days	4 years 10 months 17 days
Risk free rate	1.86%	1.95%
Volatility	54.12%	56.08%
Yield	13.98%

CONVERTIBLE NOTES (Schedule Of Debt Interest Expenses) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Gain on extinguishment	$ (14,063)
Change in fair value of convertible note embedded derivative	(6,473)
2016 Notes [Member]
Contractual interest expense	313
Debt discount amortization	147
Gain on extinguishment	(14,063)
Change in fair value of convertible note embedded derivative	6,473
Total	$ (7,130)

CONVERTIBLE NOTES (Narrative) (Details) - USD ($)		1 Months Ended			12 Months Ended
CONVERTIBLE NOTES (Narrative) (Details) - USD ($)	Dec. 07, 2016	Dec. 31, 2016	Sep. 19, 2016	Sep. 18, 2013	Dec. 31, 2016	Dec. 31, 2014
Number of shares for basis conversion				173.6593
Net proceeds from issuance of convertible notes				$ 66,800,000	$ 19,681,000
Principal amount, related to the initial purchaser's over-allotment option				9,000,000
Gain (Loss) on Extinguishment of Debt					$ 14,063,000
Percentage Of Excess Shares Outstanding					20.00%
Debt Conversion, Converted Instrument, Shares Issued	23,846,735
Convertible Notes Payable [Member]
Principal amount				$ 69,000,000
Seven Point Five Percentage Convertible Notes [Member]
Principal amount		$ 22,500,000			$ 22,500,000
Net proceeds from issuance of convertible notes		$ 19,700,000
Maturity		Nov. 15, 2021
Interest rate		7.50%			7.50%
Conversion price per share		$ 0.85			$ 0.85
Base value for conversion rate		$ 1,000
Gain (Loss) on Extinguishment of Debt		$ 14,063,000
Maximum Debt Instrument Convertible Conversion Share Number		$ 1,787.3100
Debt Instrument, Redemption, Description		Prior to the maturity date, the Company may redeem in cash: a) any or all of the 2016 Notes if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days exceeds 150% of the conversion price on each applicable trading day, or b) all of the 2016 Notes then outstanding if the aggregate principal amount of the 2016 Notes then outstanding is less than 15% of the aggregate principal amount of the notes issued.
Four Point Five Percentage Convertible Notes [Member]
Principal amount		$ 14,948,000			$ 14,948,000
Interest rate	4.50%
Debt Conversion, Converted Instrument, Amount	$ 54,052,000				$ 54,052,000
Debt Instrument, Redemption, Description			On or after September 19, 2016, the Company may redeem for cash all or part of the 2013 Notes (except for the notes that the Company is then required to repurchase in connection with a fundamental change) if the last reported sale price of the Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on the trading day immediately preceding the date on which the Company provides the notice of redemption.
Convertible Notes Due Two Thousand Twenty One [Member]
Principal amount	40,186,000
Debt Conversion, Converted Instrument, Amount	$ 40,186,000
Convertible Notes 2013 [Member]
Interest rate				4.50%
Conversion price per share				$ 5.76

FAIR VALUE MEASUREMENT (Narrative) (Details) - Fair Value, Inputs, Level 3 [Member] $ in Millions	Dec. 31, 2016 USD ($)
Four Point Five Percentage Convertible Notes [Member]
Convertible Debt, Fair Value Disclosures	$ 10.0
Four Point Five Percentage Convertible Notes [Member] \| 2013 [Member]
Convertible Debt, Fair Value Disclosures	14.9
Four Point Five Percentage Convertible Notes [Member] \| 2016 [Member]
Convertible Debt, Fair Value Disclosures	62.7
Seven Point Five Percentage Convertible Notes [Member]
Convertible Debt, Fair Value Disclosures	$ 64.0

TAXES ON INCOME (Deferred Income Taxes) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
In respect of:
Timing Differences	$ 3,520	$ 3,588
Net operating loss carry forwards	38,515	33,451
Valuation allowance	(42,035)	(37,039)
Deferred Tax Assets, Net of Valuation Allowance, Total	$ 0	$ 0

TAXES ON INCOME (Open Tax Years) (Details)

12 Months Ended

Dec. 31, 2016

ISRAEL [Member] | Minimum [Member]

Income Tax Contingency [Line Items]

Open tax year

2013

ISRAEL [Member] | Maximum [Member]

Income Tax Contingency [Line Items]

Open tax year

2016

UNITED STATES [Member] | Minimum [Member]

Income Tax Contingency [Line Items]

Open tax year

2013

^[1]

UNITED STATES [Member] | Maximum [Member]

Income Tax Contingency [Line Items]

Open tax year

2016

^[1]

[1]	Includes federal, state and local (or similar provincial jurisdictions) tax positions.

TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Line Items]
Net operating loss carry forwards				$ 153
Scenario, Forecast [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate		23.00%	24.00%
Law for Amending the Israel Income Tax Ordinance - 2009, Tax year [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate	26.50%
Law for Amending the Israel Income Tax Ordinance, Tax Thereafter [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate	25.00%
Restricted Amount [Member]
Income Tax Disclosure [Line Items]
Net operating loss carry forwards				20	$ 19
Protalix Ltd. [Member]
Income Tax Disclosure [Line Items]
Net operating loss carry forwards				$ 133	$ 102
Protalix Ltd. [Member] \| Law for Amending the Israel Income Tax Ordinance, Tax Thereafter [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate				25.00%	26.50%
Minimum [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate			23.00%	39.00%
Maximum [Member]
Income Tax Disclosure [Line Items]
Statutory income tax rate				25.00%

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Other Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Other assets:
Institutions	$ 333	$ 216
State of Israel (see note 6a)	1,046	621
Restricted deposit	477	371
Prepaid expenses	416	408
Sundry	49	51
Other assets	$ 2,321	$ 1,667

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Accounts Payable and Accruals, Other) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts payable and accruals - other:
Payroll and related expenses	$ 1,190	$ 1,125
Interest payable	511	914
Provision for vacation	1,399	1,406
Accrued expenses	3,575	1,571
Royalties payable	226	29
Property and equipment suppliers	595	489
Accounts Payable, Current	$ 7,496	$ 5,534

DISCONTINUED OPERATIONS (Balance Sheets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Accounts receivable - Trade	$ 327	$ 1,993
Inventories		80
Total current assets of discontinued operation	327	2,073
CURRENT LIABILITIES:
Other Accounts payable and accruals		1,568
Total current liabilities of discontinued operation		$ 1,568

DISCONTINUED OPERATIONS (Operations) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
REVENUES	$ 209	$ 48,674	$ 10,128
COMPANY’S SHARE IN COLLABORATION AGREEMENT		5,048	1,509
COST OF REVENUES	(373)	(7,697)	(8,423)
GROSS PROFIT (LOSS)	(164)	46,025	3,214
RESEARCH AND DEVELOPMENT EXPENSES		(586)	(2,409)
Less -reimbursements		545	2,983
RESEARCH AND DEVELOPMENT EXPENSES, NET		(41)	574
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(25)	(564)	(433)
NET INCOME (LOSS) FOR THE YEAR FROM DISCONTINUED OPERATIONS	(189)	45,420	3,355
GAIN ON THE DISPOSAL		39,899
NET INCOME (LOSS)	$ (189)	$ 85,319	$ 3,355

RELATED PARTY TRANSACTIONS (Compensation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Compensation To The non-executive Directors [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 560	$ 631	$ 560