0001144204-19-038552 | 10-Q | XBRL Viewer | Protalix Biotherapeutics INC

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Aug. 01, 2019
Document and Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Entity Registrant Name	Protalix BioTherapeutics, Inc.
Trading Symbol	PLX
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		148,382,299
Entity Central Index Key	0001006281
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 25,096	$ 37,808
Accounts receivable - Trade	7,256	4,729
Other assets	2,248	1,877
Inventories	6,998	8,569
Total current assets	41,598	52,983
FUNDS IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT	1,871	1,758
PROPERTY AND EQUIPMENT, NET	5,917	6,390
OPERATING LEASE RIGHT OF USE ASSETS	5,856	0
Total assets	55,242	61,131
Accounts payable and accruals:
Trade	6,728	5,211
Other	10,496	10,274
Operating lease liabilities	1,227
Contracts liability	7,542	9,868
Total current liabilities	25,993	25,353
LONG TERM LIABILITIES:
Convertible notes	49,401	47,966
Contracts liability	34,911	33,027
Liability for employee rights upon retirement	2,508	2,374
Operating lease liabilities	4,566
Other long term liabilities	5,348	5,292
Total long term liabilities	96,734	88,659
Total liabilities	122,727	114,012
COMMITMENTS
CAPITAL DEFICIENCY	(67,485)	(52,881)
Total liabilities net of capital deficiency	$ 55,242	$ 61,131

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
COST OF GOODS SOLD	$ (2,695)	$ (2,183)	$ (4,740)	$ (5,107)
RESEARCH AND DEVELOPMENT EXPENSES (1)	(13,323)	(7,476)	(25,024)	(14,762)
Less - grants		235	3	1,078
RESEARCH AND DEVELOPMENT EXPENSES, NET	(13,323)	(7,241)	(25,021)	(13,684)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2)	(2,068)	(2,158)	(4,298)	(4,656)
OPERATING LOSS	(5,839)	(6,744)	(11,373)	(11,895)
FINANCIAL EXPENSES	(1,907)	(1,793)	(3,827)	(4,013)
FINANCIAL INCOME	3	75	193	207
FINANCIAL EXPENSES, NET	(1,904)	(1,718)	(3,634)	(3,806)
NET LOSS FOR THE PERIOD	$ (7,743)	$ (8,462)	$ (15,007)	$ (15,701)
NET LOSS PER SHARE OF COMMON STOCK - BASIC AND DILUTED	$ (0.05)	$ (0.06)	$ (0.10)	$ (0.11)
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING LOSS PER SHARE-BASIC AND DILUTED	148,382,299	146,644,450	148,382,299	145,985,445
Goods [Member]
REVENUES	$ 3,430	$ 2,006	$ 6,960	$ 6,559
License and R&D Services [Member]
REVENUES	$ 8,817	$ 2,832	$ 15,726	$ 4,993

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

3 Months Ended

6 Months Ended

Jun. 30, 2019

Jun. 30, 2018

Jun. 30, 2019

Jun. 30, 2018

Beginning balance

$ (59,855)

$ (35,442)

$ (52,881)

$ (29,457)

Share-based compensation related to stock options

113

403

Share-based compensation related to restricted stock award

Convertible notes conversions

1,192

Convertible notes exchange

1,150

Net loss for the period

(7,743)

(8,462)

(15,007)

(15,701)

Ending balance

(67,485)

(42,742)

(67,485)

(42,742)

Common Stock [Member]

Beginning balance

$ 148

$ 146

$ 148

$ 144

Beginning balance (in shares)

148,382,299

145,569,955

148,382,299

^[1]

143,728,797

^[1]

Share-based compensation related to restricted stock award

^[2]

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

^[1]

29,898

Convertible notes conversions

$ 2

Convertible notes conversions (in shares)

^[1]

1,811,260

Convertible notes exchange

$ 2

Convertible notes exchange (in shares)

2,613,636

Ending balance

$ 148

Ending balance (in shares)

^[1]

148,382,299

148,183,591

148,382,299

148,183,591

Additional Paid-in Capital [Member]

Beginning balance

$ 269,814

$ 267,747

$ 269,524

$ 266,495

Share-based compensation related to stock options

113

403

Share-based compensation related to restricted stock award

Convertible notes conversions

1,190

Convertible notes exchange

1,148

Ending balance

269,927

268,907

269,927

268,907

Accumulated Deficit [Member]

Beginning balance

(329,817)

(303,335)

(322,553)

(296,096)

Net loss for the period

(7,743)

(8,462)

(15,007)

(15,701)

Ending balance

$ (337,560)

$ (311,797)

$ (337,560)

$ (311,797)

[1]	Common Stock, $0.001 par value; Authorized - as of June 30, 2019 and 2018 - 350,000,000 and 250,000,000, respectively.
[2]	Represents an amount less than $1.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (15,007)	$ (15,701)
Adjustments required to reconcile net loss to net cash used in operating activities:
Share based compensation	403	74
Depreciation	784	846
Financial expenses, net (mainly exchange differences)	150	94
Changes in accrued liability for employee rights upon retirement	13	(121)
Gain on amounts funded in respect of employee rights upon retirement		(43)
Net loss in connection with conversions of convertible notes		186
Amortization of debt issuance costs and debt discount	1,435	1,257
Issuance of shares for interest payment in connection with conversions of convertible notes		205
Changes in operating assets and liabilities:
Increase (decrease) in contracts liability (including non-current portion)	(442)	41
Increase in accounts receivable and other assets	(2,811)	(3,989)
Changes in right of use assets	(69)
Decrease in inventories	1,571	855
Increase (decrease) in accounts payable and accruals	1,471	(1,288)
Increase in other long term liabilities	56	207
Net cash used in operating activities	(12,446)	(17,377)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(207)	(394)
Increase in restricted deposit	(236)	(162)
Amounts funded in respect of employee rights upon retirement, net	(23)	109
Net cash used in investing activities	(466)	(447)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payment for convertible notes		(4,752)
Net cash used in financing activities		(4,752)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	200	(260)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(12,712)	(22,836)
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	37,808	51,163
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD	25,096	28,327
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Purchase of property and equipment	329	242
Convertible notes conversions		2,137
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS
Interest paid	$ 2,172	$ 2,408

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

a.General

Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”) and its wholly-owned subsidiaries, Protalix Ltd. and Protalix B.V. (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 alfataliglicerase 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 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.

The Company plans to file a biologics license application (“BLA”) for pegunigalsidase alfa for the treatment of Fabry disease in the first quarter of 2020 through the FDA’s Accelerated Approval pathway. This decision is the result of a series of meetings and correspondence between the Company and its commercialization partner, Chiesi, on the one hand and the FDA, on the other hand. The Company and Chiesi have initiated preparations for a BLA submission based on data received from the completed phase I/II clinical trials of pegunigalsidase alfa and from the ongoing phase III BRIDGE clinical trial.

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

On October 19, 2017, Protalix Ltd. and Chiesi entered into an Exclusive License and Supply Agreement (the “Chiesi Ex-US Agreement”) pursuant to which Chiesi was granted an exclusive license for all markets outside of the United States to commercialize pegunigalsidase alfa. On July 23, 2018, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi US Agreement”) with respect to the commercialization of pegunigalsidase alfa in the United States.

Under each of the Chiesi Ex-US Agreement and the Chiesi US Agreement (collectively, the “Chiesi Agreements”), Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of the agreement. In addition, under the Chiesi Ex-US Agreement, Protalix Ltd. is entitled to additional payments of up to $25.0 million in pegunigalsidase alfa development costs, capped at $10.0 million per year, and to receive additional payments of up to $320.0 million, in the aggregate, in regulatory and commercial milestone payments. Under the Chiesi US Agreement, Protalix Ltd. is entitled to payments of up to a maximum of $20.0 million to cover development costs for pegunigalsidase alfa, subject to a maximum of $7.5 million per year, and to receive an additional up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments.

Under the terms of both of the Chiesi Agreements, Protalix Ltd. will manufacture all of the pegunigalsidase alfa needed under the agreements, subject to certain exceptions, and Chiesi will purchase pegunigalsidase alfa from Protalix, subject to certain terms and conditions. Under the Chiesi Ex-US Agreement, Chiesi is required to make tiered payments of 15% to 35% of its net sales, depending on the amount of annual sales outside of the United States, as consideration for product supply. Under the Chiesi US Agreement, Chiesi is required to make tiered payments of 15% to 40% of its net sales, depending on the amount of annual sales in the United States, as consideration for product supply.

Since its approval by the FDA, taliglucerase alfa has been marketed by Pfizer in accordance with the exclusive license and supply agreement entered into between Protalix Ltd. and Pfizer, which is referred to herein as the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into an amended exclusive license and supply agreement, which is referred to here in as the Amended Pfizer Agreement, pursuant to which the Company sold to Pfizer its share in the collaboration created under the Pfizer Agreement for the commercialization of Elelyso. As part of the sale, the Company agreed to transfer its rights to Elelyso in Israel to Pfizer while gaining full rights to it in Brazil. Under the Amended Pfizer Agreement, Pfizer is entitled to all of the revenues, and is responsible for 100% of expenses globally for Elelyso, excluding Brazil where the Company is responsible for all expenses and retains all revenues.

On June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fiocruz, an arm of the Brazilian MoH, for taliglucerase alfa. Fiocruz’s purchases of alfataliglicerase to date have been significantly below certain agreed upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply alfataliglicerase to Fiocruz under the Brazil Agreement, and patients continue to be treated with alfataliglicerase in Brazil.

Going Concern

Since the Company is engaged in research and development activities, it has not derived significant income from its activities and has incurred accumulated losses in the amount of $337.6 million through June 30, 2019 and cash outflows from operating activities. As of June 30, 2019, the Company has outstanding $57.9 million aggregate principal amount of its 7.50% convertible promissory notes due 2021 (the “2021 Notes”) which are secured with a perfected lien on all of the Company’s assets. Under the terms of the indenture governing the 2021 Notes, the Company is required to maintain a minimum cash balance of at least $7.5 million. Based on its current cash resources and commitments, the Company may not be able to meet its current planned development activities and the corresponding level of expenditures for the next 12 months from the date of approval of the financial statements as of June 30, 2019 absent a refinancing or restructuring. These factors raise substantial doubt as to the Company’s ability to continue as a going concern.

The Company’s management is in the process of evaluating refinancing and restructuring alternatives, including a restructuring of its outstanding convertible notes, and related transactions. However, there is no certainty about the Company’s ability to obtain such funding.

The financial information has been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. If the Company does not complete a refinancing or restructuring, it will need to curtail or cease operations. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

b.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, 2018, filed by the Company with the Commission. The comparative balance sheet at December 31, 2018 has been derived from the audited financial statements at that date.

c.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.

The calculation of diluted LPS does not include 73,306,448 and 78,125,432 shares of Common Stock underlying outstanding options and restricted shares of Common Stock and shares issuable upon conversion of outstanding convertible notes for the six months ended June 30, 2018 and 2019, respectively, and 72,836,697 and 78,051,423 shares of Common Stock for the three months ended June 30, 2018 and 2019, respectively, because the effect would be anti-dilutive.

d.Recently adopted standards

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016‑02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). The new standard requires a lessee to record assets and liabilities on its balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s income statement. The Company adopted this standard as of January 1, 2019 on a modified retrospective basis and will not restate comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows the Company to carryforward the historical lease classification. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off of its balance sheet. The Company recognized those lease payments in its statements of operations on a straight-line basis over the lease period.

As of the adoption date, the Company recognized an operating lease asset and liability of $5.9 million and $5.7 million, respectively, as of January 1, 2019 on its balance sheet.

e. Newly issued accounting pronouncements

In June 2018, the FASB issued ASU 2018‑07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting” that expands the scope of ASC Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of ASC Topic 718 to nonemployee awards except for certain exemptions specified in ASU 2018‑07. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company does not expect the adoption of ASU 2018‑07 to have a material impact on its financial statements.

FAIR VALUE MEASUREMENT

6 Months Ended

Jun. 30, 2019

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

NOTE 3 – FAIR VALUE MEASUREMENT

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

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

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

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

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

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

The fair value of the financial instruments included in the working capital of the Company is usually identical or close to their carrying value. The fair value of the convertible notes derivative is based on Level 3 measurement.

The fair value of the $57.9 million aggregate principal amount of the Company’s outstanding 2021 Notes as of June 30, 2019 is approximately $63.2 million based on a Level 3 measurement.

The Company prepared a valuation of the fair value of the Company’s outstanding 2021 Notes (a Level 3 valuation) as of June 30, 2019. The value of these notes was estimated by implementing the binomial model. The liability component was valued based on the Income Approach. The following parameters were used:


	2021 Notes
Stock price (USD)	0.47
Expected term	2.38
Risk free rate	1.73	%
Volatility	70.95	%
Yield	11.72	%

- 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

OPERATING LEASES

6 Months Ended

Jun. 30, 2019

OPERATING LEASES

OPERATING LEASES

NOTE 4 – OPERATING LEASES

The Company is a party to a number of lease agreements for its facilities, the latest of which has been extended until the end of 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. During the extended lease period, the aggregate monthly rental payments will increase by 7.5% - 10% for each option. The Company expects to exercise these options in future periods. As of June 30, 2019, the Company provided bank guarantees of approximately $431,000 in the aggregate, to secure the fulfillment of its obligations under the lease agreements. As of December 31, 2018, the future minimum lease payments required under the operating leases for such premises are approximately $758,000, $758,000 and $621,000, for fiscal years 2019 through 2021, respectively.

The Company entered into several three-year leases for vehicles which are regularly amended as new vehicles are leased. As of December 31, 2018, the future minimum lease payments for the years ending December 31, 2019, 2020 and 2021 are approximately $474,000, $333,000 and $82,000, respectively.

The following table sets forth data regarding the Company’s operating leases for the six and three months ended June 30, 2019:


	Six Months Ended		Three Months Ended
(U.S. dollars in thousands)	June 30, 2019
Operating lease costs	$	593		301
Cash paid for amounts included in the measurement of lease liabilities		662		334
Right of use assets obtained in exchange for new operating lease liabilities		227		175

The following table sets forth data regarding the Company’s operating leases as of June 30, 2019:


(U.S. dollars in thousands)	June 30, 2019
Weighted average remaining lease term (in years)	10.7
Weighted average discount rate	12.58	%

The following table sets forth a maturity analysis of the Company’s operating lease liabilities as of June 30, 2019:


(U.S. dollars in thousands)	June 30, 2019
2019 (excluding the six months ended June 30, 2019)	$	637
2020	$	1,113
2021	$	885
2022	$	806
2023	$	793
After 2023	$	6,572
Total undiscounted cash flows	$	10,806
Less: imputed interest	$	5,013
Present value of operating lease liabilities	$	5,793

REVENUES

6 Months Ended

Jun. 30, 2019

REVENUES

REVENUES

NOTE 5 – REVENUES

The following table summarizes the Company’s disaggregation of revenues:


	Six Months Ended June 30,
(U.S. dollars in thousands)		2019		2018
Pfizer	$	2,735	$	3,986
Brazil	$	4,225	$	2,573
Total revenues from selling goods	$	6,960	$	6,559
Revenues from license and R&D services	$	15,726	$	4,993

The following table sets forth data regarding the Company’s contracts liability:


	Six Months Ended June 30,
(U.S. dollars in thousands)	2019		2018
Contracts liability at the beginning of the period	$	42,895	$	25,015
Additions during the period		15,284		5,034
Revenue recognized during the period		(15,726)		(4,993)
Contracts liability at the end of the period	$	42,453	$	25,056

The following table represents the Company’s unsatisfied performance obligation:


	June 30,
(U.S. dollars in thousands)	2019		2018
Unsatisfied performance obligation	$	57,480	$	88,171

SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2019

SIGNIFICANT ACCOUNTING POLICIES

General

a.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;

(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)

Going Concern

Basis of presentation

b.Basis of presentation

Net loss per share

c.Net loss per share

Recently adopted standards

d.Recently adopted standards

As of the adoption date, the Company recognized an operating lease asset and liability of $5.9 million and $5.7 million, respectively, as of January 1, 2019 on its balance sheet.

Newly issued accounting pronouncements

e. Newly issued accounting pronouncements

OPERATING LEASES (Tables)

6 Months Ended

Jun. 30, 2019

OPERATING LEASES

Schedule of operating leases

The following table sets forth data regarding the Company’s operating leases for the six and three months ended June 30, 2019:


	Six Months Ended		Three Months Ended
(U.S. dollars in thousands)	June 30, 2019
Operating lease costs	$	593		301
Cash paid for amounts included in the measurement of lease liabilities		662		334
Right of use assets obtained in exchange for new operating lease liabilities		227		175

The following table sets forth data regarding the Company’s operating leases as of June 30, 2019:


(U.S. dollars in thousands)	June 30, 2019
Weighted average remaining lease term (in years)	10.7
Weighted average discount rate	12.58	%

Schedule of maturity analysis of operating leases

The following table sets forth a maturity analysis of the Company’s operating lease liabilities as of June 30, 2019:


(U.S. dollars in thousands)	June 30, 2019
2019 (excluding the six months ended June 30, 2019)	$	637
2020	$	1,113
2021	$	885
2022	$	806
2023	$	793
After 2023	$	6,572
Total undiscounted cash flows	$	10,806
Less: imputed interest	$	5,013
Present value of operating lease liabilities	$	5,793

REVENUES (Tables)

6 Months Ended

Jun. 30, 2019

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Schedule of Company's disaggregation of revenues

The following table summarizes the Company’s disaggregation of revenues:


	Six Months Ended June 30,
(U.S. dollars in thousands)		2019		2018
Pfizer	$	2,735	$	3,986
Brazil	$	4,225	$	2,573
Total revenues from selling goods	$	6,960	$	6,559
Revenues from license and R&D services	$	15,726	$	4,993

Schedule of Company's contracts liability

The following table sets forth data regarding the Company’s contracts liability:


	Six Months Ended June 30,
(U.S. dollars in thousands)	2019		2018
Contracts liability at the beginning of the period	$	42,895	$	25,015
Additions during the period		15,284		5,034
Revenue recognized during the period		(15,726)		(4,993)
Contracts liability at the end of the period	$	42,453	$	25,056

Schedule of Company's unsatisfied performance obligation

The following table represents the Company’s unsatisfied performance obligation:


	June 30,
(U.S. dollars in thousands)	2019		2018
Unsatisfied performance obligation	$	57,480	$	88,171

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	Jul. 23, 2018	Oct. 19, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jan. 01, 2019	Dec. 31, 2018	Oct. 31, 2015
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			78,051,423	72,836,697	78,125,432	73,306,448
Retained Earnings (Accumulated Deficit)			$ 337,600		$ 337,600
Operating Lease, Right-of-Use Asset			5,856		5,856		$ 5,900	$ 0
Operating Lease, Liability			5,793		5,793		$ 5,700
2021 Notes [Member]
Significant Accounting Policies [Line Items]
Long-term Debt, Gross			$ 57,900		$ 57,900
Debt Instrument, Interest Rate, Stated Percentage			7.50%		7.50%
Maintain of Minimum Cash Balance			$ 7,500		$ 7,500
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%
Chiesi US Agreement [Member]
Significant Accounting Policies [Line Items]
Upfront Nonrefundable Noncreditable Payment Receivable	$ 25,000
Additional Amounts Payable To Cover Development Costs	20,000
Maximum Entitlement Of Development Costs To Cover Per Year	7,500
Additional AmountPayable For Achievement Of Regulatory And Commercial Milestones	$ 760,000
Chiesi US Agreement [Member] \| Minimum [Member]
Significant Accounting Policies [Line Items]
Payment On Net Sales Percentage	15.00%
Chiesi US Agreement [Member] \| Maximum [Member]
Significant Accounting Policies [Line Items]
Payment On Net Sales Percentage	40.00%
Chiesi Ex US Agreement [Member]
Significant Accounting Policies [Line Items]
Upfront Nonrefundable Noncreditable Payment Receivable		$ 25,000
Additional Amounts Payable To Cover Development Costs		25,000
Maximum Entitlement Of Development Costs To Cover Per Year		10,000
Additional AmountPayable For Achievement Of Regulatory And Commercial Milestones		$ 320,000
Chiesi Ex US Agreement [Member] \| Minimum [Member]
Significant Accounting Policies [Line Items]
Payment On Net Sales Percentage		15.00%
Chiesi Ex US Agreement [Member] \| Maximum [Member]
Significant Accounting Policies [Line Items]
Payment On Net Sales Percentage		35.00%

OPERATING LEASES - Lessee, Operating Lease, Liability, Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019
OPERATING LEASES
2019 (excluding the six months ended June 30, 2019)	$ 637
2020	1,113
2021	885
2022	806
2023	793
After 2023	6,572
Total undiscounted cash flows	10,806
Less: imputed interest	5,013
Present value of operating lease liabilities	$ 5,793	$ 5,700

OPERATING LEASES - Additional Information (Details)	6 Months Ended
OPERATING LEASES - Additional Information (Details)	Jun. 30, 2019 USD ($)
Minimum [Member]
Disclosure of Leases Operating [Line Items]
Percentage of Change in Operating Lease Monthly Rental Payments	7.50%
Maximum [Member]
Disclosure of Leases Operating [Line Items]
Percentage of Change in Operating Lease Monthly Rental Payments	10.00%
Vehicle Lease [Member]
Disclosure of Leases Operating [Line Items]
Operating Leases, Future Minimum Payments Due, Next Twelve Months	$ 474,000
Operating Leases, Future Minimum Payments, Due in Two Years	333,000
Operating Leases, Future Minimum Payments, Due in Three Years	82,000
Lease Agreements [Member]
Disclosure of Leases Operating [Line Items]
Operating Leases, Future Minimum Payments Due, Next Twelve Months	758,000
Operating Leases, Future Minimum Payments, Due in Two Years	758,000
Operating Leases, Future Minimum Payments, Due in Three Years	621,000
Security Deposit	$ 431,000

STOCK TRANSACTIONS (Details) - Employee Stock Option [Member]	6 Months Ended
	Jun. 30, 2019 USD ($) $ / shares shares
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 \| $	$ 449,000
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	65.30%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.80%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.469
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	6 years
Chief Executive Officer [Member] \| 2006 Employee Stock Incentive Plan Member
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross \| shares	1,600,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.469

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Research and Development Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ 138	$ (2)	$ 316	$ 40
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ (25)	$ 14	$ 87	$ 34

STOCK TRANSACTIONS	6 Months Ended
STOCK TRANSACTIONS	Jun. 30, 2019
STOCK TRANSACTIONS
STOCK TRANSACTIONS	NOTE 6 - STOCK TRANSACTIONS In June 2019, the Company granted to its new chief executive officer 10-year options to purchase, in the aggregate, 1,600,000 shares of Common Stock under the Company’s 2006 Employee Stock Incentive Plan, as amended (the “Plan”). The options have an exercise price equal to $0.469 per share, vest over a four-year period in 16 equal quarterly increments. 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, and are subject to certain other terms and conditions. The Company estimated the fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $449,000 based on the following weighted average assumptions: share price equal to $0.469 ; dividend yield of 0% for all years; expected volatility of 65.3%; risk-free interest rates of 1.8%; and expected life of six years.

SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2019
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 7 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date on which the consolidated financial statements were available to be issued and no subsequent events were identified.

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
INVENTORIES
Raw materials	$ 3,442	$ 3,792
Work in progress	313
Finished goods	3,243	4,777
Total inventory	$ 6,998	$ 8,569

INVENTORIES - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
INVENTORIES
Inventory Write-down	$ 25,000	$ 1,100,000

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL DEFICIENCY (Parenthetical) - $ / shares	Jun. 30, 2019	Jun. 30, 2018
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL DEFICIENCY
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	350,000,000	250,000,000

FAIR VALUE MEASUREMENT - The liability component was valued based on the Income Approach (Details) - 2021 Notes [Member] - Fair Value, Inputs, Level 3 [Member]	6 Months Ended
	Jun. 30, 2019 $ / shares
Stock price (USD)	$ 0.47
Expected term	2 years 4 months 17 days
Risk free rate	1.73%
Volatility	70.95%
Yield	11.72%

FAIR VALUE MEASUREMENT - Additional Information (Details) - Fair Value, Inputs, Level 3 [Member] - Seven Point Five Percentage Convertible Notes [Member] $ in Millions	Jun. 30, 2019 USD ($)
Convertible Debt, Fair Value Disclosures	$ 63.2
Long-term Debt, Gross	$ 57.9

OPERATING LEASES - Lease, Cost (Details) $ in Thousands	3 Months Ended	6 Months Ended
OPERATING LEASES - Lease, Cost (Details) $ in Thousands	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
OPERATING LEASES
Operating lease costs	$ 593	$ 301
Cash paid for amounts included in the measurement of lease liabilities	662	334
Right of use assets obtained in exchange for new operating lease liabilities	$ 227	$ 175
Weighted average remaining lease term (in years)	10 years 8 months 12 days	10 years 8 months 12 days
Weighted average discount rate	12.58%	12.58%

REVENUES - Unsatisfied Performance Obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018
REVENUES
Unsatisfied performance obligation	$ 57,480	$ 88,171