0001144204-17-057290 | 10-Q | XBRL Viewer | Protalix Biotherapeutics INC

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2017	Nov. 01, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Entity Registrant Name	Protalix BioTherapeutics, Inc.
Entity Central Index Key	0001006281
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	PLX
Entity Common Stock, Shares Outstanding		139,727,673

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 33,482	$ 63,281
Accounts receivable - Trade	7,292	693
Other assets	2,689	2,321
Inventories	7,479	5,245
Assets of discontinued operation	211	327
Total current assets	51,153	71,867
FUNDS IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT	1,919	1,677
PROPERTY AND EQUIPMENT, NET	7,986	8,703
Total assets	61,058	82,247
Accounts payable and accruals:
Trade	8,691	4,007
Other	11,989	7,496
Convertible notes	5,911	53,872
Deferred revenues	0	837
Total current liabilities	26,591	66,212
LONG TERM LIABILITIES:
Convertible notes	53,625	19,343
Liability for employee rights upon retirement	2,612	2,348
Promissory note	4,301	4,301
Total long term liabilities	60,538	25,992
Total liabilities	87,129	92,204
COMMITMENTS
CAPITAL DEFICIENCY
Total shareholders’ equity (capital deficiency)	(26,071)	(9,957)
Total liabilities net of capital deficiency	$ 61,058	$ 82,247

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2017

Sep. 30, 2016

Sep. 30, 2017

Sep. 30, 2016

REVENUES

$ 7,526

$ 4,670

$ 16,773

$ 7,118

COST OF REVENUES

(6,066)

(4,248)

(13,677)

(6,446)

GROSS PROFIT

1,460

422

3,096

672

RESEARCH AND DEVELOPMENT EXPENSES

^[1]

(7,118)

(6,353)

(22,389)

(23,700)

Less - grants

729

1,297

2,545

4,800

RESEARCH AND DEVELOPMENT EXPENSES, NET

(6,389)

(5,056)

(19,844)

(18,900)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

^[1]

(2,836)

(2,014)

(8,187)

(6,215)

OPERATING LOSS

(7,765)

(6,648)

(24,935)

(24,443)

FINANCIAL EXPENSES

(3,680)

(910)

(8,809)

(2,715)

FINANCIAL INCOME

268

1,670

606

LOSS FROM CHANGE IN FAIR VALUE OF CONVERTIBLE NOTES EMBEDDED DERIVATIVE

(38,061)

FINANCIAL EXPENSES, NET

(3,672)

(642)

(45,200)

(2,109)

LOSS FROM CONTINUING OPERATIONS

(11,437)

(7,290)

(70,135)

(26,552)

LOSS FROM DISCONTINUED OPERATIONS

(189)

NET LOSS FOR THE PERIOD

$ (11,437)

$ (7,290)

$ (70,135)

$ (26,741)

NET LOSS PER SHARE OF COMMON STOCK - BASIC AND DILUTED

Loss from continuing operations

$ (0.09)

$ (0.07)

$ (0.55)

$ (0.27)

Loss from discontinued operations

(0.00)

Net loss per share of common stock

$ (0.09)

$ (0.07)

$ (0.55)

$ (0.27)

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING LOSS PER SHARE-BASIC AND DILUTED

132,549,001

99,821,970

128,223,722

99,766,245

[1]	Includes share-based compensation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Research and Development Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	$ 43	$ 82	$ 163	$ 448
General and Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	$ 32	$ 81	$ 128	$ 317

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

Total

Common Stock [Member]

Additional Paid-in Capital [Member]

Accumulated Deficit [Member]

Balance at Dec. 31, 2015

$ 10,873

$ 100

$ 194,064

$ (183,291)

Balance (in shares) at Dec. 31, 2015

^[1]

99,800,397

Share-based compensation related to stock options

697

Share-based compensation related to restricted stock award

Share-based compensation related to restricted stock award (in shares)

^[1]

7,843

Exercise of options

^[2]

Exercise of options (in shares)

^[1]

122,162

Net loss from continuing operations

(26,552)

Net loss from discontinued operations

(189)

Balance at Sep. 30, 2016

(15,103)

$ 100

194,829

(210,032)

Balance (in shares) at Sep. 30, 2016

^[1]

99,930,402

Balance at Dec. 31, 2016

(9,957)

$ 124

202,575

(212,656)

Balance (in shares) at Dec. 31, 2016

^[1]

124,134,085

Share-based compensation related to stock options

291

Reclassification of embedded derivative

43,634

Convertible notes conversions

8,781

$ 10

8,771

Convertible notes conversions (in shares)

^[1]

9,711,235

Conversion component related to convertible notes issuance

1,315

Net loss from continuing operations

(70,135)

Net loss from discontinued operations

Balance at Sep. 30, 2017

$ (26,071)

$ 134

$ 256,586

$ (282,791)

Balance (in shares) at Sep. 30, 2017

^[1]

133,845,320

[1]	Common Stock, $0.001 par value; Authorized – as of September 30, 2017 and 2016 - 250,000,000.
[2]	Represents an amount less than $1.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) [Parenthetical] - $ / shares	Sep. 30, 2017	Sep. 30, 2016
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (70,135)	$ (26,741)
Loss from discontinued operations	0	(189)
Loss from continuing operations	(70,135)	(26,552)
Adjustments required to reconcile net loss to net cash used in operating activities:
Share based compensation	291	765
Depreciation	1,469	1,489
Financial (income) expenses, net (mainly exchange differences)	13	(375)
Changes in accrued liability for employee rights upon retirement	54	(31)
Gain on amounts funded in respect of employee rights upon retirement	(21)	(3)
Loss on conversion of convertible notes	587	0
Change in fair value of convertible notes embedded derivative	38,061	0
Amortization of debt issuance costs and debt discount	1,710	333
Issuance of shares for interest payment in connection with conversions of convertible notes	1,111	0
Changes in operating assets and liabilities:
Decrease in deferred revenues	(837)	(291)
Increase in accounts receivable and other assets	(6,467)	(1,358)
Decrease (increase) in inventories	(2,234)	907
Increase in accounts payable and accruals	8,698	367
Net cash used in continuing operations	(27,700)	(24,749)
Net cash provided by (used in) discontinued operations	116	(11)
Net cash used in operating activities	(27,584)	(24,760)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(681)	(732)
Increase in restricted deposit	(336)
Amounts funded in respect of employee rights upon retirement, net	(68)	7
Net cash used in investing activities	(1,085)	(725)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payment for conversion of convertible notes	(10,961)	0
Net proceeds from issuance of convertible notes	9,542	0
Net cash used in financing activities	(1,419)	0
EFFECT OF EXCHANGE RATE CHANGES ON CASH	289	431
NET DECREASE IN CASH AND CASH EQUIVALENTS	(29,799)	(25,054)
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	63,281	76,374
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD	33,482	51,320
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Purchase of property and equipment	666	642
Convertible notes conversions	7,668	0
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS
Interest paid	$ 2,613	$ 3,105

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2017

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^® 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) pegunigalsidase alfa, or PRX-102, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder;

(2) alidornase alfa, or 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 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.

On June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fiocruz, an arm of the Brazilian MoH, 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. 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 2017, the Company received a purchase order from the Brazilian MoH for the purchase of approximately $24.3 million of alfataliglicerase for the treatment of Gaucher patients in Brazil. The purchase order consists of a number of shipments in increasing volumes. Shipments started in June 2017.

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 accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2016, filed by the Company with the Commission. The comparative balance sheet at December 31, 2016 has been derived from the audited financial statements at that date.

Net 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.

Diluted LPS is calculated in continuing operations. The calculation of diluted LPS does not include 19,572,040 and 76,195,921 shares of Common Stock underlying outstanding options and restricted shares of Common Stock and shares issuable upon conversion of the convertible notes for the nine months ended September 30, 2016 and 2017, respectively, and 19,484,667 and 80,696,070 shares of Common Stock for the three months ended September 30, 2016 and 2017, respectively, because the effect would be anti-dilutive.

INVENTORIES

9 Months Ended

Sep. 30, 2017

INVENTORIES [Abstract]

INVENTORIES

NOTE 2 – INVENTORIES

Inventory at September 30, 2017 and December 31, 2016 consisted of the following:

	September 30,		December 31,
	2017		2016
	(U.S. dollars in thousands)
Raw materials	$	4,153	$	2,591
Work in progress		492		395
Finished goods		2,834		2,259
Total inventory	$	7,479	$	5,245

FAIR VALUE MEASUREMENT

9 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENT [Abstract]

FAIR VALUE MEASUREMENT

NOTE 3 – FAIR VALUE MEASUREMENT

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received from the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

The fair value of the financial instruments included in the working capital of the Company is usually identical or close to their carrying value.

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

As of September 30, 2017, the fair value of the remaining $5.9 million in aggregate principal amount of the Company’s outstanding 4.5% convertible promissory notes due 2018, of the remaining $61.9 million in aggregate principal amount of the Company’s outstanding 7.5% secured convertible promissory notes due 2021, and $5.0 million in aggregate principal amount of the Company’s outstanding 4.5% convertible promissory notes due 2022, is approximately $5.6 million, $76.9 million and $5.3 million, respectively, based on a Level 3 measurement. See note 5 for the parameters used in the valuation of fair value.

- 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

DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 4 – DISCONTINUED OPERATIONS

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 September 30, 2017 and December 31, 2016, respectively:

	September 30, 2017		December 31, 2016
	(U.S. dollars in thousands)
CURRENT ASSETS:
Accounts receivable - Trade	$	211	$	327
Total current assets of discontinued operations	$	211	$	327

The following summarizes financial information related to the Company’s discontinued operations in the Company’s consolidated statements of operations for the nine months ended September 30, 2017 and September 30, 2016:

	Nine months ended September 30,
	2017		2016
	(U.S. dollars in thousands)
REVENUES			$	209
COST OF REVENUES				(373)
GROSS LOSS				(164)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES				(25)
NET LOSS FOR THE PERIOD FROM DISCONTINUED OPERATIONS		-	$	(189)

CONVERTIBLE NOTES

9 Months Ended

Sep. 30, 2017

CONVERTIBLE NOTES [Abstract]

CONVERTIBLE NOTES

NOTE 5 – CONVERTIBLE NOTES

On July 24, 2017, the Company entered into a Note Purchase Agreement with certain institutional investors relating to the private issuance and sale by the Company of $10 million in aggregate principal amount of its 7.5% secured convertible promissory notes due 2021. The 7.5% convertible notes were issued pursuant to the base indenture dated December 7, 2016 (the existing 7.5% convertible notes).

Concurrently with the consummation of the purchase described in the Note Purchase Agreement, the Company entered into a privately negotiated exchange agreement with certain of its existing note holders to exchange $9.0 million in aggregate principal amount of the Company’s 4.5% convertible notes due 2018 for $8.55 million in aggregate principal amount of 4.5% convertible notes due 2022 (the “2017 Exchange Agreement”).

All of the Company’s 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 4.5% convertible notes due 2018, and for the 4.5% convertible notes due 2022, as a liability, on an aggregated basis, in their entirety. The conversion feature for the Company’s existing 7.5% convertible notes 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. On April 12, 2017, the Company received approval from its stockholders to issue shares of the Company’s Common Stock in excess of 19.9% of the Company’s outstanding shares of Common Stock to settle conversion requests and pay interest on the Company’s issued 7.5% convertible notes. As a result, the Company reclassified the embedded derivative to equity. During the nine months ended September 30, 2017 such measurement of the derivative resulted in a non-cash charge to the Company’s statement of operations of $38,061 thousand. The conversion feature of the 7.5% convertible notes issued in July 2017 is accounted for as equity, which is bifurcated from the debt host contract.

As the terms of the 4.5% convertible notes due 2018 and the 4.5% convertible notes due 2022 are substantially different, the 2017 Exchange Agreement was considered an extinguishment of debt, where the Company used fair value method to account for the 4.5% convertible notes due 2022. The Company recognized a loss of $1.3 million due to the extinguishment.

The debt discount and debt issuance costs regarding the issuance of the Company’s outstanding 4.5% convertible notes due 2018 are deferred and amortized over the applicable convertible period.

Issuance costs regarding the issuance of the Company’s 7.5% convertible notes were allocated to the liability, equity component, derivative and shares of Common Stock based on their relative fair values. Issuance costs regarding the issuance of the Company's 4.5% convertible notes due 2022 were allocated to the liability.

Issuance costs that were allocated to liability will be amortized using the effective interest rate, other than issuance costs that were allocated to derivative, which were expensed immediately.

During the nine months ended September 30, 2017, note holders converted (i) approximately $10.8 million in aggregate principal amount of the Company’s 7.5% convertible notes into a total of 5,044,484 shares of Common Stock and cash payments equal to approximately $11.0 million and (ii) approximately $3.55 million in aggregate principal amount of the Company’s 4.5% convertible notes due 2022 into a total of 4,666,751 shares of Common Stock.

The Company prepared a valuation of the fair value of the 4.5% convertible notes due 2018, for the 4.5% convertible notes due 2022 and for the 7.5% convertible notes due 2021 (a Level 3 valuation) as of September 30, 2017. The value of these notes were 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)	4.5% notes due 2018		4.5% notes due 2022		7.5% notes due 2021
Stock price (USD)		0.58		0.58		0.58
Expected term		0.96		4.38		4.13
Risk free rate		1.33%		1.87%		1.83%
Volatility		103.71%		64.73%		66.34%
Yield		11.87%		14.22%		11.30%

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 6 – SUBSEQUENT EVENTS

On October 18, 2017, holders of the Company’s 4.5% convertible notes due 2022 converted all of the remaining $5.0 million face value of the notes in exchange for 5,882,353 shares of Common Stock. Additional shares will be issued in connection with the make-whole premium associated with the converted notes.

On October 17, 2017, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi, or the Chiesi Agreement, with respect to the development and commercialization of pegunigalsidase alfa, or PRX-102. Under the terms of the Chiesi Agreement, Protalix Ltd. granted to Chiesi exclusive licensing rights for the commercialization of PRX-102 for all markets outside of the United States. Protalix Ltd. maintains the exclusive commercialization rights to PRX-102 in the United States. Protalix Ltd. is entitled to an upfront, non-refundable, non-creditable payment of $25 million from Chiesi in consideration for and as reimbursement of the costs sustained by Protalix Ltd. up to the effective date of the Chiesi Agreement and additional payments of up to $25 million to cover development costs for PRX-102, subject to a maximum of $10 million per year. Protalix Ltd. is also eligible to receive up to an additional $320 million in regulatory and commercial milestone payments. Chiesi will also make tiered payments of 15% to 35% of its net sales to Protalix Ltd., depending on the amount of annual sales, as consideration for the supply of PRX-102.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2017

SIGNIFICANT ACCOUNTING POLICIES [Abstract]

General

General

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

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

Basis of presentation

Basis of presentation

Net (loss) earnings per share

Net loss per share

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2017

INVENTORIES [Abstract]

Schedule of Inventory

Inventory at September 30, 2017 and December 31, 2016 consisted of the following:

	September 30,		December 31,
	2017		2016
	(U.S. dollars in thousands)
Raw materials	$	4,153	$	2,591
Work in progress		492		395
Finished goods		2,834		2,259
Total inventory	$	7,479	$	5,245

DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations

	September 30, 2017		December 31, 2016
	(U.S. dollars in thousands)
CURRENT ASSETS:
Accounts receivable - Trade	$	211	$	327
Total current assets of discontinued operations	$	211	$	327

	Nine months ended September 30,
	2017		2016
	(U.S. dollars in thousands)
REVENUES			$	209
COST OF REVENUES				(373)
GROSS LOSS				(164)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES				(25)
NET LOSS FOR THE PERIOD FROM DISCONTINUED OPERATIONS		-	$	(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
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+ Details

CONVERTIBLE NOTES (Tables)

9 Months Ended

Sep. 30, 2017

CONVERTIBLE NOTES [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

(U.S. Dollars in thousands)	4.5% notes due 2018		4.5% notes due 2022		7.5% notes due 2021
Stock price (USD)		0.58		0.58		0.58
Expected term		0.96		4.38		4.13
Risk free rate		1.33%		1.87%		1.83%
Volatility		103.71%		64.73%		66.34%
Yield		11.87%		14.22%		11.30%

- 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

SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2015	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017
Significant Accounting Policies [Line Items]
Common Stock, Par or Stated Value Per Share		$ 0.001	$ 0.001	$ 0.001	$ 0.001
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		80,696,070	19,484,667	76,195,921	19,572,040
Brazil Agreement [Member] \| Scenario, Forecast [Member]
Significant Accounting Policies [Line Items]
Supply Commitment In Year 2017						$ 24.3
Pfizer Agreement [Member]
Significant Accounting Policies [Line Items]
Proceeds From Exchange For Rights To Royalties	$ 36.0
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%

INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Raw materials	$ 4,153	$ 2,591
Work in progress	492	395
Finished goods	2,834	2,259
Total inventory	$ 7,479	$ 5,245

FAIR VALUE MEASUREMENT (Narrative) (Details) $ in Millions	Sep. 30, 2017 USD ($)
Four Point Five Percentage Convertible Notes [Member]
Convertible Debt, Fair Value Disclosures	$ 5.9
Seven Point Five Percentage Convertible Notes [Member]
Convertible Debt, Fair Value Disclosures	61.9
Fair Value, Inputs, Level 3 [Member] \| Four Point Five Percentage Convertible Notes [Member]
Convertible Debt, Fair Value Disclosures	5.0
Fair Value, Inputs, Level 3 [Member] \| Four Point Five Percentage Convertible Notes One [Member]
Convertible Debt, Fair Value Disclosures	5.6
Fair Value, Inputs, Level 3 [Member] \| Four Point Five Percentage Convertible Notes Two [Member]
Convertible Debt, Fair Value Disclosures	76.9
Fair Value, Inputs, Level 3 [Member] \| Four Point Five Percentage Convertible Notes Three [Member]
Convertible Debt, Fair Value Disclosures	$ 5.3

DISCONTINUED OPERATIONS (Balance Sheets) (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Accounts receivable - Trade	$ 211	$ 327
Total current assets of discontinued operations	$ 211	$ 327

DISCONTINUED OPERATIONS (Operations) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
REVENUES		$ 209
COST OF REVENUES		(373)
GROSS LOSS		(164)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		(25)
NET LOSS FOR THE PERIOD FROM DISCONTINUED OPERATIONS	$ 0	$ (189)

CONVERTIBLE NOTES (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jul. 24, 2017	Sep. 30, 2017	Sep. 30, 2016
Gain (Loss) on Extinguishment of Debt		$ 1,300
Debt Instrument, Interest Rate, Stated Percentage		4.50%
Repayments of Convertible Debt		$ 10,961	$ 0
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net		$ (38,061)	$ 0
Debt Instrument, Maturity Year		2022
Seven Point Five Percentage Convertible Notes [Member]
Debt Conversion, Converted Instrument, Shares Issued		5,044,484
Debt Instrument, Interest Rate, Stated Percentage	7.50%	7.50%
Debt Instrument, Face Amount	$ 10,000
Repayments of Convertible Debt		$ 11,000
Debt Conversion, Original Debt, Amount		$ 10,800
Debt Instrument, Maturity Year	2021
Seven Point Five Percentage Convertible Notes [Member] \| Convertible Notes Payable [Member]
Excess Percentage of Common Stock Shares Outstanding to Settle Conversion		19.90%
Four Point Five Percentage Convertible Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Debt Instrument, Face Amount	$ 9,000
Debt Instrument, Maturity Year	2018
Four Point Five Percentage Convertible Notes One [Member]
Debt Conversion, Converted Instrument, Shares Issued		4,666,751
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Debt Instrument, Face Amount	$ 8,550
Debt Conversion, Original Debt, Amount		$ 3,550
Debt Instrument, Maturity Year	2022

CONVERTIBLE NOTES (Fair Value Income Approach) (Details)	9 Months Ended
	Sep. 30, 2017 $ / shares
4.5% notes due 2018 [Member]
Stock price (USD)	$ 0.58
Expected term	11 months 16 days
Risk free rate	1.33%
Volatility	103.71%
Yield	11.87%
4.5% notes due 2022 [Member]
Stock price (USD)	$ 0.58
Expected term	4 years 4 months 17 days
Risk free rate	1.87%
Volatility	64.73%
Yield	14.22%
7.5% notes due 2021 [Member]
Stock price (USD)	$ 0.58
Expected term	4 years 1 month 17 days
Risk free rate	1.83%
Volatility	66.34%
Yield	11.30%

SUBSEQUENT EVENTS (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended			9 Months Ended
	Oct. 18, 2017	Oct. 17, 2017	Jul. 24, 2017	Sep. 30, 2017
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				4.50%
Debt Instrument, Maturity Year				2022
Four Point Five Percentage Convertible Notes [Member]
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			4.50%
Debt Instrument, Maturity Year			2018
Four Point Five Percentage Convertible Notes One [Member]
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			4.50%
Debt Conversion, Converted Instrument, Shares Issued				4,666,751
Debt Conversion, Original Debt, Amount				$ 3,550
Debt Instrument, Maturity Year			2022
Subsequent Event [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Additional Amount Payable for Achievement of Regulatory and Commercial Milestones		$ 320,000
Subsequent Event [Member] \| Four Point Five Percentage Convertible Notes [Member]
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Subsequent Event [Member] \| Four Point Five Percentage Convertible Notes One [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	5,882,353
Debt Conversion, Original Debt, Amount	$ 5,000
Debt Instrument, Maturity Year	2022
Subsequent Event [Member] \| Chiesi Agreement [Member]
Subsequent Event [Line Items]
Upfront, Non-refundable, Non-creditable Payment Receivable		25,000
Maximum Entitlement of Development Costs To Cover Per Year		10,000
Additional Amounts Payable To Cover Development Costs		$ 25,000
Subsequent Event [Member] \| Chiesi Agreement [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Payment on Net Sales, Percentage		15.00%
Subsequent Event [Member] \| Chiesi Agreement [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Payment on Net Sales, Percentage		35.00%