0001558370-24-015612 | 10-Q | XBRL Viewer | Protalix Biotherapeutics INC

SUBSEQUENT EVENTS	9 Months Ended
Sep. 30, 2024
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 9 – SUBSEQUENT EVENTS Since the end of the quarter ended September 30, 2024, the Company collected approximately $3.9 million from sales to Chiesi.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2024

NOTE 9 – SUBSEQUENT EVENTS

Since the end of the quarter ended September 30, 2024, the Company collected approximately $3.9 million from sales to Chiesi.

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2024

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

Schedule of supplemental information of balance sheets


	September 30,		December 31,
(U.S. dollars in thousands)	2024		2023
Accounts payable and accruals – other:
Payroll and related expenses	$	1,251	$	1,437
Interest payable		-		511
Provision for vacation		1,713		1,605
Accrued expenses		8,342		9,009
Royalties payable		571		637
Income tax payable		3,040		2,876
Sales reserve		4,258		2,861
Property and equipment suppliers		402		614
	$	19,577	$	19,550

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$ (3,562)	$ 14,356
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Share-based compensation	2,599	2,081
Depreciation	970	878
Financial expenses (income), net	173	(511)
Changes in accrued liability for employee rights upon retirement	32	(50)
Changes in deferred income tax asset	236	(3,092)
Gain on amounts funded in respect of employee rights upon retirement	(20)	(49)
Gain on sale of fixed assets	(3)
Gain on conversions of convertible notes		(421)
Amortization of debt issuance costs and debt discount		208
Changes in operating assets and liabilities:
Decrease in contracts liability		(13,178)
Decrease (increase) in accounts receivable-trade and other assets	3,069	(4,188)
Changes in operating lease right of use assets, net	13	12
Decrease (increase) in inventories	1,846	(4,779)
Increase (decrease) in accounts payable and accruals	(670)	3,820
Net cash provided by (used in) operating activities	4,683	(4,913)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in bank deposits		(20,420)
Short-term deposit withdrawal	20,420	5,000
Purchase of property and equipment	(857)	(899)
Proceeds from sale of property and equipment	3
Amounts funded in respect of employee rights upon retirement, net	(25)	(50)
Net cash provided by (used in) investing activities	19,541	(16,369)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for convertible notes redemption	(20,420)
Proceeds from issuance of common stock under the Sales Agreement, net		23,954
Exercise of warrants		712
Net cash provided by (used in) financing activities	(20,420)	24,666
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(29)	(87)
NET INCREASE IN CASH AND CASH EQUIVALENTS	3,775	3,297
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	23,634	17,111
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD	27,409	20,408
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Purchase of property and equipment	402	253
Operating lease right of use assets obtained in exchange for new operating lease liabilities	376	1,395
Convertible notes conversions		7,783
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS
Interest paid	1,532	2,743
Interest received	$ 1,481	$ 303

REVENUES (Tables)

9 Months Ended

Sep. 30, 2024

REVENUES

Schedule of Company's disaggregation of revenues

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


	Nine Months Ended September 30,				Three Months Ended September 30,
(U.S. dollars in thousands)	2024		2023		2024		2023
Pfizer	$	11,431	$	7,972	$	3,430	$	2,304
Brazil	$	9,314	$	5,120	$	2,048	$	2,320
Chiesi	$	14,075	$	17,217	$	12,361	$	5,544
Total revenues from selling goods	$	34,820	$	30,309	$	17,839	$	10,168
Revenues from license and R&D services	$	361	$	24,699	$	120	$	177

SUBSEQUENT EVENTS (Details) $ in Millions	Nov. 14, 2024 USD ($)
Chiesi Agreements
SUBSEQUENT EVENTS
Total proceeds from sale of products	$ 3.9

SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

SIGNIFICANT ACCOUNTING POLICIES

General

Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”) and its wholly-owned subsidiaries, Protalix Ltd. and Protalix B.V. (collectively, the “Subsidiaries”), are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company’s proprietary ProCellEx^® protein expression system (“ProCellEx”). To date, the Company has successfully developed two enzyme replacement therapies (ERTs); Elfabrio^® (pegunigalsidase alfa) for the treatment of adult patients with a confirmed diagnosis of Fabry disease and Elelyso^® (taliglucerase alfa) for the treatment of adult patients with Gaucher disease. Elfabrio, which the Company referred to as PRX-102 during its development stage, has been approved for marketing in the United States, the European Union, Great Britain, Switzerland, Peru and Israel. The Company has partnered with Chiesi Farmaceutici S.p.A. (“Chiesi”) for the development and commercialization of Elfabrio.

The Company has licensed the rights to commercialize Elelyso worldwide (other than Brazil) to Pfizer Inc. (“Pfizer”), and in Brazil to Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”). Elelyso is marketed as BioManguinhos alfataliglicerase in Brazil.

The Company is committed to leveraging its track record of success as the Company progresses with the development of treatments for rare and orphan diseases. In addition, the Company continuously works on the further development of its ProCellEx technology and bioreactor system. Accordingly, the Company is turning its focus to new, early-stage product candidates that treat indications for which there are high unmet needs in terms of efficacy and safety, including renal diseases. Treatments of interest will address both genetic and non-genetic diseases. The Company intends to use its ProCellEx platform and PEGylization capabilities, as well as other modalities such as small molecules and antibodies, to take advantage of highly innovative opportunities. The Company is also exploring novel platform technologies.

On May 5, 2023, the European Commission (“EC”) announced that it had approved the Marketing Authorization Application (“MAA”) for Elfabrio and on May 9, 2023, the U.S. Food and Drug Administration (“FDA”) announced that it had approved the Biologics License Application (“BLA”) for Elfabrio, each for adult patients with a confirmed diagnosis of Fabry disease. Both approvals cover the 1 mg/kg every two weeks dosage. The European Medicines Agency (“EMA”) approval followed the February 2023 adoption of a positive opinion and recommendation of marketing authorization for Elfabrio by the EMA’s Committee for Medicinal Products for Human Use the (“CHMP”). Elfabrio was approved by the FDA with a boxed warning for hypersensitivity reactions/anaphylaxis, consistent with Enzyme Replacement Therapy (ERT) class labeling, and warnings/precautions providing guidance on the signs and symptoms of hypersensitivity and infusion-associated reactions seen in the clinical studies as well as treatments to manage such events should they occur. The warnings/precautions for membranoproliferative glomerulonephritis (MPGN) alert prescribers to the possibility of MPGN and provide guidance for appropriate patient management. Overall, the FDA review team concluded that in the context of Fabry disease as a rare, serious disease with limited therapeutic options that may not be suitable to all individual patients, the benefit-risk of Elfabrio is favorable for the treatment of adults with confirmed Fabry disease.

The Company has entered into two exclusive global licensing and supply agreements for Elfabrio with Chiesi. On October 19, 2017, Protalix Ltd., the Company’s wholly-owned subsidiary, entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi Ex-US Agreement”) pursuant to which Chiesi was granted an exclusive license for all markets outside of the United States to commercialize Elfabrio. On July 23, 2018, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi US Agreement”), with respect to the commercialization of Elfabrio in the United States.

Elfabrio was the subject of a phase III clinical program studying the drug as a treatment of patients with Fabry disease, a rare, genetic lysosomal disorder. The phase III clinical program included three separate studies, which are referred to as the BALANCE study, the BRIDGE study and the BRIGHT study. The phase III clinical program analyzed two potential dosing regimens: 1 mg/kg every two weeks and 2 mg/kg every four weeks. In addition, the phase III clinical program included two extension studies in which subjects that participated in the Company’s phase I/II clinical trials and phase III clinical trials had the opportunity to enroll and continue to be treated with PRX-102. As of March 1, 2023, sponsorship

of the two open label extension studies was transferred to Chiesi, which is now administering the extension studies. From time to time, and as Elfabrio is approved for marketing in different jurisdictions, participants switch out of the open label extension studies. Most of the participants transfer to a commercial setting and others withdraw for other reasons.

The BLA for Elfabrio for the treatment of adult patients with Fabry disease was resubmitted to the FDA on November 9, 2022. An initial BLA for Elfabrio was submitted to the FDA on May 27, 2020 under the FDA’s Accelerated Approval pathway, but resulted in a Complete Response Letter (“CRL”).

The MAA was submitted to the EMA on February 7, 2022, after the October 8, 2021 meeting the Company held, together with Chiesi, with the Rapporteur and Co-Rapporteur of the EMA regarding PRX-102.

The FDA publicly released the internal review documents for Elfabrio (pegunigalsidase alfa-iwxj) injection BLA 761161. These documents provide previously unavailable additional information regarding the basis for the FDA’s May 2023 approval decision. In particular, the FDA determined that substantial evidence of effectiveness for Elfabrio in Fabry patients was established with one adequate and well-controlled study (Study PB-102-F01/02) with confirmatory evidence provided by the BALANCE study (also referred to as Study PB-102-F20). The FDA review team also concluded that the BALANCE study met its primary efficacy endpoint, which assessed the annualized rate of change in eGFR (estimated glomerular filtration rate) over 104 weeks. However, the FDA also determined that the results from the BALANCE study did not support a non-inferiority claim to the comparator product due to the lack of data to support a non-inferiority margin.

The Company continuously evaluates potential strategic marketing partnerships as well as collaboration programs with biotechnology and pharmaceutical companies and academic research institutions. Except with respect to Elfabrio and Elelyso, the Company holds the worldwide commercialization rights to its other proprietary development drug candidates.

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

(1)PRX-115, the Company’s plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat uncontrolled gout; and

(2)PRX-119, the Company’s plant cell-expressed PEGylated recombinant human DNase I product candidate being designed to elongate half-life in the circulation for NETs-related diseases.

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

In March 2024, the Company initiated a phase I First-in-Human clinical trial of PRX-115. This study included 64 adult male and female subjects in a dose escalation design with eight sequential dosing cohorts, each composed of eight subjects (six active and two placebo). As of September 30, 2024, the data is locked and is currently being analyzed. The Company plans to announce the results at an upcoming scientific meeting. In addition, the Company has commenced preparations for a phase II clinical trial of PRX-115 which the Company expects will commence in the second half of 2025.

On July 2, 2021, the Company entered into an At The Market Offering Agreement (the “2021 Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”) which was amended on May 2, 2022. Pursuant to the terms of the 2021 Sales Agreement, the Company was able to sell, from time to time through the Agent, shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $20.0 million (the “ATM Shares”).

During the term of the 2021 Sales Agreement which ended during the quarter ended March 31, 2023, the Company sold a total of 13,980,060 ATM Shares for total gross proceeds of approximately $20.0 million thereby completing the ATM program under said agreement.

On February 27, 2023, the Company entered into an At The Market Offering Agreement (the “2023 Sales Agreement”) with the Agent. Pursuant to the terms of the 2023 Sales Agreement, the Company may sell, from time to time through the Agent, ATM Shares having an aggregate offering price of up to $20.0 million. As of September 30, 2024, shares of Common Stock for total gross proceeds of approximately $6.4 million remain available to be sold under the 2023 Sales Agreement.

Under each of the Chiesi Ex-US Agreement and the Chiesi US Agreement (collectively, the “Chiesi Agreements”), Chiesi made an upfront payment to Protalix Ltd. of $25.0 million in connection with the execution of each agreement. In addition, under the Chiesi Ex-US Agreement, Protalix Ltd. is entitled to additional payments of up to $25.0 million in pegunigalsidase alfa development costs and to receive additional payments of up to $320.0 million, in the aggregate, in regulatory and commercial milestone payments. Under the Chiesi US Agreement, Protalix Ltd. is entitled to payments of up to a maximum of $20.0 million to cover development costs for pegunigalsidase alfa and to receive additional payments of up to a maximum of $760.0 million, in the aggregate, in regulatory and commercial milestone payments. To date, Protalix Ltd. has received the complete amount of development costs to which it is entitled under the Chiesi Agreements. In addition, following the approval of Elfabrio by the FDA, the Company received a milestone payment equal to $20.0 million.

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

Under the terms of both of the Chiesi Agreements, Protalix Ltd. is required to manufacture all of the Elfabrio drug substance needed under the agreements, subject to certain exceptions, and Chiesi will purchase Elfabrio drug product from Protalix, subject to certain terms and conditions. The consideration for Protalix Ltd. is based on the drug product supplied to Chiesi and the average selling price of the drug product in the relevant territory multiplied by tiered payments as described in the relevant agreement. Under the Chiesi Ex-US Agreement, the price payable to the Company for drug product supplied is based on a range of 15% to 35% of the average selling price of the drug product in the applicable territory, and under the Chiesi US Agreement, such price is based on a range of 15% to 40% of the average selling price of the drug product in the United States.

On August 29, 2022, the Company entered into a Fill/Finish Agreement (the “F/F Agreement”) and a Letter Agreement (the “Letter Agreement”), in each case with Chiesi. The Company agreed to supply Chiesi with drug substance for pegunigalsidase alfa in connection with the commercial fill/finish services. Under the F/F Agreement, and, following relevant technology and technical information transfer activities, Chiesi agreed, among other things, to provide the Company with commercial fill/finish services for pegunigalsidase alfa, including to support the anticipated global launch of pegunigalsidase alfa. The F/F Agreement shall continue in force until December 31, 2025, unless terminated earlier in accordance with the terms of the F/F Agreement and the term may be extended by mutual agreement for an additional period of seven years upon mutual written agreement prior to expiration of the initial term.

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

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

Because the Company’s operations are conducted in the State of Israel, the business and operations may be directly affected by economic, political, geopolitical and military conditions in Israel. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel attacking a number of civilian and military targets. At the same time, clashes between Israel and Hezbollah in Lebanon have increased. In response, Israel’s security cabinet declared war against the Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Moreover, the attacks by Hamas and Hezbollah, and Israel’s defensive measures, may result in a greater regional conflict. Since the outbreak of the war, other regional actors, including Iran, have taken military action against Israel. It is currently not possible to predict the duration or severity of the ongoing conflict or its effects on the Company’s business, operations and financial conditions. The ongoing conflict is rapidly evolving and developing, and could disrupt certain of the Company’s business and operations, among others. The Company has elected to store manufactured drug substance in multiple locations, both within and outside of Israel, to mitigate the risk of loss due to the military operations. As of the issuance of these financial statements, the impact of the war has not had an adverse effect on the Company’s operations.

The Company expects to continue to incur significant expenditures in the near future due to research and developments efforts with respect to the product candidates. The Company believes that its cash and cash equivalents as of September 30, 2024 are sufficient to satisfy the Company’s capital needs for at least 12 months from the date that these financial statements are issued.

Basis of presentation

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

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2023, filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). The comparative balance sheet at December 31, 2023 has been derived from the audited financial statements at that date. There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the year ended December 31, 2023, except for convertible notes, as described below.

Earnings (Loss) per share

Earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of Common Stock outstanding during each period.

Diluted earnings per share is calculated by dividing the net income by the weighted-average number of shares of Common Stock outstanding during each period increased to include the number of additional shares of Common Stock that would have been outstanding if the potentially dilutive shares had been issued.

In computing diluted earnings per share, basic earnings per share are adjusted to take into account the potential dilution that could occur upon: (i) the exercise of options granted under employee stock compensation plans using the treasury

stock method; (ii) the exercise of warrants using the treasury stock method; and (iii) the conversion of the convertible notes using the “if-converted” method.

Convertible notes

In September 2024, the Company repaid in full all of the outstanding principal and interest payable under its 7.50% Senior Secured Convertible Promissory Notes due September 2024 (the “2024 Notes”). The repayment of the convertible notes at maturity was financed entirely with available cash.

Prior to January 1, 2024, the Company accounted for its outstanding convertible notes using the guidance set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815 which required that the Company determine whether the embedded conversion option must be separated from the other features of the applicable note instrument 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’s outstanding 2024 Notes were accounted for as a liability (debt) and equity component (conversion option) as the convertible notes may be settled wholly or partly in cash, at the option of the Company, when converted.

In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. ASU 2020-06 updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. This will also result in the interest expense recognized for convertible debt instruments to be typically closer to the coupon interest rate when applying the guidance in Topic 835. On January 1, 2024, the Company adopted ASU 2020-06 using the modified retrospective method of adoption. Under this method, the Company applied the guidance to the 2024 Notes at the adoption date and was required to make an adjustment to January 1, 2024, opening accumulated deficit balance and additional paid in capital. The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Under ASU 2020-06, the 2024 Notes (debt and conversion option) are accounted for as a liability. The impact to the Company's consolidated balance sheet as of December 31, 2023 resulting from its adoption of ASU 2020-06 is as follows:


(U.S. dollars in thousands)	As Reported December 31, 2023		Updated January 1, 2024		Effect of Change
Convertible notes	$	20,251	$	20,420	$	169
Additional paid in capital		415,045		414,652		(393)
Accumulated deficit		381,549		381,325		224

New accounting pronouncements

New accounting pronouncements

Recently adopted accounting pronouncements

ASU 2020-06, which was issued by the FASB in August 2020 and adopted by the Company in January 2024, simplifies the accounting for certain financial instruments with characteristics of both liability and equity, including convertible instruments and contracts on an entity’s own equity. The amendments to this guidance are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. See Note 1(d).

Recently issued accounting pronouncements, not yet adopted

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis. Early adoption is permitted, with the option to apply the standard retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures.” This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Public entities with a single reportable segment are required to provide the new disclosures and all of the disclosures required under ASC 280. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

9 Months Ended

Sep. 30, 2024

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

NOTE 8 – SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

Balance sheets:


	September 30,		December 31,
(U.S. dollars in thousands)	2024		2023
Accounts payable and accruals – other:
Payroll and related expenses	$	1,251	$	1,437
Interest payable		-		511
Provision for vacation		1,713		1,605
Accrued expenses		8,342		9,009
Royalties payable		571		637
Income tax payable		3,040		2,876
Sales reserve		4,258		2,861
Property and equipment suppliers		402		614
	$	19,577	$	19,550

EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net Income (Loss)	$ 3,236	$ (1,852)	$ (3,562)	$ 14,356
Financial expenses of 2024 Notes	(503)	(1,766)		(1,610)
Net income (loss) for diluted calculation	$ 2,733	$ (3,618)	$ (3,562)	$ 12,746
Denominator:
Weighted average shares of Common Stock outstanding for basic calculation	73,549,745	72,281,681	73,301,091	65,811,506
Weighted average dilutive effect of 2024 Notes	7,667,323	11,500,998		13,981,660
Weighted average dilutive effect of stock options				1,247,115
Weighted average shares of Common Stock outstanding for diluted calculation	81,217,068	83,782,679	73,301,091	81,040,281
Outstanding Stock Options And Warrants
Denominator:
Antidilutive securities excluded from computation of earnings per share, amount	20,173,438	19,429,910		18,399,260
Outstanding Stock Options Warrants And 2024 Notes
Denominator:
Antidilutive securities excluded from computation of earnings per share, amount			30,515,287

INVENTORIES - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
INVENTORIES
Raw materials	$ 4,242	$ 4,176
Work in progress	12,251	9,055
Finished goods	706	5,814
Total inventory	$ 17,199	$ 19,045

FAIR VALUE MEASUREMENT

9 Months Ended

Sep. 30, 2024

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

NOTE 3 – 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 identical or close to their carrying 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.

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+ Details

REVENUES - Disaggregation of Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenues	$ 17,959	$ 10,345	$ 35,181	$ 55,008
GOODS
Revenues	17,839	10,168	34,820	30,309
GOODS \| Pfizer
Revenues	3,430	2,304	11,431	7,972
GOODS \| Brazil
Revenues	2,048	2,320	9,314	5,120
GOODS \| Chiesi
Revenues	12,361	5,544	14,075	17,217
LICENSE AND R&D SERVICES
Revenues	$ 120	$ 177	$ 361	$ 24,699

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2024

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

NOTE 6 – EARNINGS (LOSS) PER SHARE

Basic and diluted net earnings (loss) per share attributable to common stockholders were calculated as follows:


		Nine Months Ended September 30,				Three Months Ended September 30,
(In thousands, except share data)		2024		2023		2024	2023
Numerator:
Net loss	$	(3,562)	$	14,356	$	3,236	$	(1,852)
Add:
Financial expenses of 2024 Notes*				(1,610)		(503)		(1,766)
Net income (loss) for diluted calculation	$	(3,562)	$	12,746	$	2,733	$	(3,618)
Denominator:
Weighted average shares of Common Stock outstanding for basic calculation		73,301,091		65,811,506		73,549,745		72,281,681
Weighted average dilutive effect of 2024 Notes				13,981,660		7,667,323		11,500,998
Weighted average dilutive effect of stock options				1,247,115		-		-
Weighted average shares of Common Stock outstanding for diluted calculation		73,301,091		81,040,281		81,217,068		83,782,679

* Financial expenses on 2024 Notes consists of add back of financial expense incurred during the period and inclusion of make-whole interest payments that will be incurred upon conversion.

Diluted earnings (loss) per share do not include 30,515,287 shares of Common Stock underlying outstanding stock options, warrants and the 2024 Notes for the nine months ended September 30, 2024, and 20,173,438 shares of Common Stock underlying outstanding stock options and warrants for the three months ended September 30, 2024, because the effect would be anti-dilutive.

Diluted earnings (loss) per share do not include 19,429,910 and 18,399,260 shares of Common Stock underlying outstanding stock options and warrants of the Company for the three and nine months ended September 30, 2023, respectively, because the effect would be anti-dilutive.

TAXES ON INCOME - Summary of Taxes on Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
TAXES ON INCOME
Current taxes on income	$ 164	$ 95	$ 164	$ 3,728
Deferred taxes on income	443	38	236	(3,092)
Total taxes on income	$ 607	$ 133	$ 400	$ 636

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

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+ Details

EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

EARNINGS (LOSS) PER SHARE

Schedule of basic and diluted net earnings (loss) per share

Basic and diluted net earnings (loss) per share attributable to common stockholders were calculated as follows:


		Nine Months Ended September 30,				Three Months Ended September 30,
(In thousands, except share data)		2024		2023		2024	2023
Numerator:
Net loss	$	(3,562)	$	14,356	$	3,236	$	(1,852)
Add:
Financial expenses of 2024 Notes*				(1,610)		(503)		(1,766)
Net income (loss) for diluted calculation	$	(3,562)	$	12,746	$	2,733	$	(3,618)
Denominator:
Weighted average shares of Common Stock outstanding for basic calculation		73,301,091		65,811,506		73,549,745		72,281,681
Weighted average dilutive effect of 2024 Notes				13,981,660		7,667,323		11,500,998
Weighted average dilutive effect of stock options				1,247,115		-		-
Weighted average shares of Common Stock outstanding for diluted calculation		73,301,091		81,040,281		81,217,068		83,782,679

* Financial expenses on 2024 Notes consists of add back of financial expense incurred during the period and inclusion of make-whole interest payments that will be incurred upon conversion.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
TOTAL REVENUE	$ 17,959	$ 10,345	$ 35,181	$ 55,008
COST OF GOODS SOLD	(8,375)	(4,893)	(20,433)	(14,126)
RESEARCH AND DEVELOPMENT EXPENSES	(2,998)	(3,669)	(8,846)	(13,991)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(2,595)	(3,670)	(9,194)	(10,816)
OPERATING INCOME (LOSS)	3,991	(1,887)	(3,292)	16,075
FINANCIAL EXPENSES	(299)	(460)	(1,056)	(2,406)
FINANCIAL INCOME	151	628	1,186	1,323
FINANCIAL INCOME (EXPENSES), NET	(148)	168	130	(1,083)
INCOME (LOSS) BEFORE TAXES ON INCOME	3,843	(1,719)	(3,162)	14,992
TAXES ON INCOME	(607)	(133)	(400)	(636)
NET INCOME (LOSS) FOR THE PERIOD	$ 3,236	$ (1,852)	$ (3,562)	$ 14,356
EARNINGS (LOSS) PER SHARE OF COMMON STOCK - BASIC (in dollars per share)	$ 0.04	$ (0.03)	$ (0.05)	$ 0.22
EARNINGS (LOSS) PER SHARE OF COMMON STOCK - DILUTED (in dollars per share)	$ 0.03	$ (0.04)	$ (0.05)	$ 0.16
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING EARNINGS (LOSS) PER SHARE - BASIC (in shares)	73,549,745	72,281,681	73,301,091	65,811,506
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING EARNINGS (LOSS) PER SHARE - DILUTED (in shares)	81,217,068	83,782,679	73,301,091	81,040,281
Goods
TOTAL REVENUE	$ 17,839	$ 10,168	$ 34,820	$ 30,309
License and R&D Services
TOTAL REVENUE	$ 120	$ 177	$ 361	$ 24,699

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

Common Stock

Additional Paid-in Capital

Adjustment

Additional Paid-in Capital

Accumulated Deficit

Adjustment

Accumulated Deficit

Adjustment

Total

Beginning balance at Dec. 31, 2022

$ 54

$ 379,167

$ (389,861)

$ (10,640)

Beginning balance (in shares) at Dec. 31, 2022

^[1]

53,790,167

Issuance of common stock under the Sales Agreement, net

$ 13

23,941

23,954

Issuance of common stock under the Sales Agreement, net (in shares)

^[1]

12,560,150

Convertible notes conversions

$ 5

7,778

7,783

Convertible notes conversions (in shares)

^[1]

4,691,623

Share-based compensation related to stock options

1,195

Share-based compensation related to restricted stock awards

$ 1

886

887

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

^[1]

1,371,362

Exercise of warrants

712

Exercise of warrants (in shares)

^[1]

538,822

Net income (loss) for the period

14,356

Ending balance at Sep. 30, 2023

$ 73

413,679

(375,505)

38,247

Ending balance (in shares) at Sep. 30, 2023

^[1]

72,952,124

Beginning balance at Jun. 30, 2023

$ 72

412,582

(373,653)

39,001

Beginning balance (in shares) at Jun. 30, 2023

^[1]

71,580,762

Share-based compensation related to stock options

383

Share-based compensation related to restricted stock awards

$ 1

714

715

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

^[1]

1,371,362

Net income (loss) for the period

(1,852)

Ending balance at Sep. 30, 2023

$ 73

413,679

(375,505)

38,247

Ending balance (in shares) at Sep. 30, 2023

^[1]

72,952,124

Beginning balance at Dec. 31, 2023

$ 73

415,045

(381,549)

33,569

Beginning balance (in shares) at Dec. 31, 2023

^[1]

72,952,124

Share-based compensation related to stock options

1,191

Share-based compensation related to restricted stock awards

$ 1

1,407

1,408

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

^[1]

681,459

Net income (loss) for the period

(3,562)

Ending balance (ASU 2020-06) at Sep. 30, 2024

$ (393)

$ 224

$ (169)

Ending balance at Sep. 30, 2024

$ 74

417,250

(384,887)

32,437

Ending balance (in shares) at Sep. 30, 2024

^[1]

73,633,583

Beginning balance at Jun. 30, 2024

$ 73

416,631

(388,123)

28,581

Beginning balance (in shares) at Jun. 30, 2024

^[1]

73,292,674

Share-based compensation related to stock options

358

Share-based compensation related to restricted stock awards

$ 1

261

262

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

^[1]

340,909

Net income (loss) for the period

3,236

Ending balance (ASU 2020-06) at Sep. 30, 2024

$ (393)

$ 224

$ (169)

Ending balance at Sep. 30, 2024

$ 74

$ 417,250

$ (384,887)

$ 32,437

Ending balance (in shares) at Sep. 30, 2024

^[1]

73,633,583

[1]	Common stock, $0.001 par value; Authorized – as of September 30, 2024 and December 31, 2023 – 185,000,000 shares.

TAXES ON INCOME - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
TAXES ON INCOME
Effective income tax rate (as a percent)		(13.00%)	4.00%
Statutory income tax rate		21.00%
Valuation allowance related to deferred tax assets	$ (3.1)
Chiesi Agreements
TAXES ON INCOME
Amount of milestone payment received	$ 20.0	$ 20.0

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 01, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Securities Act File Number	001-33357
Entity Registrant Name	PROTALIX BIOTHERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	65-0643773
Entity Address, Address Line One	2 University Plaza
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Hackensack
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07601
City Area Code	201
Local Phone Number	696-9345
Title of 12(b) Security	Common stock, $0.001 par value
Trading Symbol	PLX
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		73,633,583
Entity Central Index Key	0001006281
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2024

INVENTORIES

Schedule of inventory

Inventories at September 30, 2024 and December 31, 2023 consisted of the following:


	September 30,		December 31,
(U.S. dollars in thousands)	2024		2023
Raw materials	$	4,242	$	4,176
Work in progress		12,251		9,055
Finished goods		706		5,814
Total inventory	$	17,199	$	19,045

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 3,236	$ (1,852)	$ (3,562)	$ 14,356

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

TAXES ON INCOME (Tables)

9 Months Ended

Sep. 30, 2024

TAXES ON INCOME

Schedule of taxes on income

The following table summarizes the Company’s taxes on income:


	Nine Months Ended September 30,				Three Months Ended September 30,
(U.S. dollars in thousands)	2024		2023		2024		2023
Current taxes on income	$	164	$	3,728	$	164	$	95
Deferred taxes on income		236		(3,092)		443		38
Total taxes on income	$	400	$	636	$	607	$	133

SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

General

The MAA was submitted to the EMA on February 7, 2022, after the October 8, 2021 meeting the Company held, together with Chiesi, with the Rapporteur and Co-Rapporteur of the EMA regarding PRX-102.

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

(1)PRX-115, the Company’s plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat uncontrolled gout; and

(2)PRX-119, the Company’s plant cell-expressed PEGylated recombinant human DNase I product candidate being designed to elongate half-life in the circulation for NETs-related diseases.

Basis of presentation

Earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of Common Stock outstanding during each period.

stock method; (ii) the exercise of warrants using the treasury stock method; and (iii) the conversion of the convertible notes using the “if-converted” method.

Convertible notes


(U.S. dollars in thousands)	As Reported December 31, 2023		Updated January 1, 2024		Effect of Change
Convertible notes	$	20,251	$	20,420	$	169
Additional paid in capital		415,045		414,652		(393)
Accumulated deficit		381,549		381,325		224

New accounting pronouncements

Recently adopted accounting pronouncements

Recently issued accounting pronouncements, not yet adopted

SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Accounts payable and accruals - other:
Payroll and related expenses	$ 1,251	$ 1,437
Interest payable		511
Provision for vacation	1,713	1,605
Accrued expenses	8,342	9,009
Royalties payable	571	637
Income tax payable	3,040	2,876
Sales reserve	4,258	2,861
Property and equipment suppliers	402	614
Accounts payable and accruals - other	$ 19,577	$ 19,550

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 27,409	$ 23,634
Short-term bank deposits		20,926
Accounts receivable - Trade	2,195	5,272
Other assets	1,050	1,055
Inventories	17,199	19,045
Total current assets	47,853	69,932
NON-CURRENT ASSETS:
Funds in respect of employee rights upon retirement	561	528
Property and equipment, net	4,648	4,973
Deferred income tax asset	2,856	3,092
Operating lease right of use assets	5,645	5,909
Total assets	61,563	84,434
Accounts payable and accruals:
Trade	3,135	4,320
Other	19,577	19,550
Operating lease liabilities	1,508	1,409
Convertible notes		20,251
Total current liabilities	24,220	45,530
LONG TERM LIABILITIES:
Liability for employee rights upon retirement	730	714
Operating lease liabilities	4,176	4,621
Total long term liabilities	4,906	5,335
Total liabilities	29,126	50,865
COMMITMENTS
STOCKHOLDERS' EQUITY	32,437	33,569
Total liabilities and stockholders' equity	$ 61,563	$ 84,434

TAXES ON INCOME

9 Months Ended

Sep. 30, 2024

TAXES ON INCOME

TAXES ON INCOME

NOTE 7 – TAXES ON INCOME

The following table summarizes the Company’s taxes on income:


	Nine Months Ended September 30,				Three Months Ended September 30,
(U.S. dollars in thousands)	2024		2023		2024		2023
Current taxes on income	$	164	$	3,728	$	164	$	95
Deferred taxes on income		236		(3,092)		443		38
Total taxes on income	$	400	$	636	$	607	$	133

The Company had an effective tax rate of (13)% for the nine months ended September 30, 2024, compared to an effective tax rate of 4% for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was the result of forecasted profits derived primarily from U.S. taxable GILTI income mainly due to Section 174 of the U.S. Tax Cuts and Jobs Act, which was enacted in December 2017 (the “TCJA”).

In the second quarter ended June 30, 2023, following the regulatory approvals for Elfabrio in May 2023, the receipt of the $20.0 million milestone payment and the launch of Elfabrio in the United States, the Company released valuation allowance previously recorded on deferred tax assets in respect of its net operating losses (“NOLs”) in the United States resulting in a net tax benefit of $3.1 million. The Company concluded that, based upon the preponderance of positive evidence over negative evidence and the anticipated ability to use the deferred tax assets, it was more likely than not that these deferred tax

assets would be realizable due to forecasted profits. The Company considered the following: (i) cumulative profits for tax over the previous 12 quarters in its U.S. operations; (ii) the impact of Section 174 of the TCJA which requires the Company to capitalize and amortize its research and development expenses over 15 years; and (iii) its forecasted profits in the United States following the regulatory approvals of Elfabrio.

- Definition

The entire disclosure for income tax.

+ References

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-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

SIGNIFICANT ACCOUNTING POLICIES - Convertible notes (Details) $ in Thousands	Dec. 31, 2023 USD ($)
SIGNIFICANT ACCOUNTING POLICIES
Convertible notes	$ 20,251
Additional paid in capital	415,045
Accumulated deficit	381,549
ASU 2020-06 \| Cumulative Effect, Period of Adoption, Adjusted Balance
SIGNIFICANT ACCOUNTING POLICIES
Convertible notes	20,420
Additional paid in capital	414,652
Accumulated deficit	381,325
ASU 2020-06 \| Effect of Change
SIGNIFICANT ACCOUNTING POLICIES
Convertible notes	169
Additional paid in capital	(393)
Accumulated deficit	$ 224

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

INVENTORIES

9 Months Ended

Sep. 30, 2024

INVENTORIES

INVENTORIES

NOTE 2 - INVENTORIES

Inventories at September 30, 2024 and December 31, 2023 consisted of the following:


	September 30,		December 31,
(U.S. dollars in thousands)	2024		2023
Raw materials	$	4,242	$	4,176
Work in progress		12,251		9,055
Finished goods		706		5,814
Total inventory	$	17,199	$	19,045

SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands					1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 29, 2022	May 13, 2021 USD ($)	Jul. 23, 2018 USD ($)	Oct. 19, 2017 USD ($)	Oct. 31, 2015	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($) shares	Sep. 30, 2024 USD ($) agreement $ / shares	Sep. 30, 2023 USD ($)	Dec. 31, 2023 $ / shares	Feb. 27, 2023 USD ($)	Jul. 02, 2021 USD ($) $ / shares
SIGNIFICANT ACCOUNTING POLICIES
Number of global licensing and supply agreements \| agreement								2
Common Stock, Par or Stated Value Per Share \| $ / shares								$ 0.001		$ 0.001
Stock issuance proceeds									$ 23,954
ATM Shares
SIGNIFICANT ACCOUNTING POLICIES
Number of shares issued (in shares) \| shares							13,980,060
Common Stock, Par or Stated Value Per Share \| $ / shares												$ 0.001
Sale of stock, maximum offering price								$ 6,400			$ 20,000	$ 20,000
Stock issuance proceeds							$ 20,000
2024 Notes
SIGNIFICANT ACCOUNTING POLICIES
Interest rate (as a percent)								7.50%
Amended Pfizer Agreement \| Protalix Bio Therapeutics Incorporation \| Brazil
SIGNIFICANT ACCOUNTING POLICIES
Collaborative arrangement revenues and expenses sharing percentage					100.00%
Chiesi Agreements
SIGNIFICANT ACCOUNTING POLICIES
Amount of milestone payment received						$ 20,000		$ 20,000
Chiesi US Agreement
SIGNIFICANT ACCOUNTING POLICIES
Additional amounts payable to cover development costs			$ 20,000
Additional amount payable for achievement of regulatory and commercial milestones			$ 760,000
Chiesi US Agreement \| Minimum
SIGNIFICANT ACCOUNTING POLICIES
Payment on net sales percentage			15.00%
Chiesi US Agreement \| Maximum
SIGNIFICANT ACCOUNTING POLICIES
Payment on net sales percentage			40.00%
Chiesi Ex-US Agreement
SIGNIFICANT ACCOUNTING POLICIES
Additional amounts payable to cover development costs				$ 25,000
Agreement amendment payment receivable		$ 10,000
Change in amount receivable for achievement of regulatory and commercial milestones		$ 25,000
Additional amount payable for achievement of regulatory and commercial milestones				$ 320,000
Chiesi Ex-US Agreement \| Minimum
SIGNIFICANT ACCOUNTING POLICIES
Payment on net sales percentage				15.00%
Chiesi Ex-US Agreement \| Maximum
SIGNIFICANT ACCOUNTING POLICIES
Payment on net sales percentage				35.00%
Chiesi US Agreement and Chiesi Ex-US Agreement
SIGNIFICANT ACCOUNTING POLICIES
Non-refundable payment receivable			$ 25,000	$ 25,000
Fill/Finish Agreement
SIGNIFICANT ACCOUNTING POLICIES
Extended term of agreement	7 years

SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2024

SIGNIFICANT ACCOUNTING POLICIES

Schedule of ASU 2020-06 on the condensed consolidated balance sheet

The impact to the Company's consolidated balance sheet as of December 31, 2023 resulting from its adoption of ASU 2020-06 is as follows:


(U.S. dollars in thousands)	As Reported December 31, 2023		Updated January 1, 2024		Effect of Change
Convertible notes	$	20,251	$	20,420	$	169
Additional paid in capital		415,045		414,652		(393)
Accumulated deficit		381,549		381,325		224

STOCK TRANSACTIONS (Details) $ / shares in Units, $ in Millions	Sep. 23, 2024 USD ($) installment $ / shares shares	Jul. 02, 2024 USD ($) installment shares	Apr. 01, 2024 USD ($) shares	Jan. 15, 2024 USD ($) installment shares
Shares of restricted Common Stock \| Vice President Research And Development
STOCK TRANSACTIONS
Number of shares granted \| shares		250,000
Grant Date Fair Value \| $		$ 0.3
Shares of restricted Common Stock \| Vice President Research And Development \| Share Based Compensation Award Tranche One
STOCK TRANSACTIONS
Vesting Percentage		33.30%
Vesting period		1 year
Shares of restricted Common Stock \| Vice President Research And Development \| Share Based Compensation Award Tranche Two
STOCK TRANSACTIONS
Vesting Percentage		66.60%
Vesting period		2 years
Number of equal quarterly increments \| installment		8
Plan \| Shares of restricted Common Stock
STOCK TRANSACTIONS
Number of shares granted \| shares				100,000
Vesting period				3 years
Number of equal quarterly increments \| installment				12
Grant Date Fair Value \| $				$ 0.2
Plan \| Shares of restricted Common Stock \| Chief Executive Officer
STOCK TRANSACTIONS
Number of shares granted \| shares			263,960
Grant Date Fair Value \| $			$ 0.3
Plan \| Shares of restricted Common Stock \| Senior Vice President And Chief Financial Officer
STOCK TRANSACTIONS
Number of shares granted \| shares	90,909
Grant Date Fair Value \| $	$ 0.1
Plan \| Options \| Officers And Other Employees
STOCK TRANSACTIONS
Term of award	10 years
Number of options to purchase shares \| shares	1,015,725
Exercise price \| $ / shares	$ 1.10
Vesting period	3 years
Number of equal quarterly increments \| installment	12
Grant Date Fair Value \| $	$ 0.8

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	185,000,000	185,000,000

REVENUES

9 Months Ended

Sep. 30, 2024

REVENUES

REVENUES

NOTE 4 – REVENUES

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


	Nine Months Ended September 30,				Three Months Ended September 30,
(U.S. dollars in thousands)	2024		2023		2024		2023
Pfizer	$	11,431	$	7,972	$	3,430	$	2,304
Brazil	$	9,314	$	5,120	$	2,048	$	2,320
Chiesi	$	14,075	$	17,217	$	12,361	$	5,544
Total revenues from selling goods	$	34,820	$	30,309	$	17,839	$	10,168
Revenues from license and R&D services	$	361	$	24,699	$	120	$	177

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

STOCK TRANSACTIONS

9 Months Ended

Sep. 30, 2024

STOCK TRANSACTIONS

STOCK TRANSACTIONS

NOTE 5 – STOCK TRANSACTIONS

On January 15, 2024, the Company granted, with the approval of the Company’s compensation committee, 100,000 shares of restricted Common Stock, in the aggregate, to certain of the Company’s employees under the Company’s Amended and Restated 2006 Employee Stock Incentive Plan, as amended (the “Plan”). All such shares of restricted Common Stock vest over a three-year period in 12 equal quarterly increments. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $0.2 million.

On April 1, 2024, the Company granted, with the approval of the Company’s compensation committee, 263,960 shares of fully-vested restricted Common Stock to the Company’s President and Chief Executive Officer under the Plan instead of a cash bonus. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $0.3 million.

On July 2, 2024, the Company granted, with the approval of the Company’s compensation committee, 250,000 shares of restricted Common Stock to its new Vice President, Research and Development, under the Plan. The first third of such shares of restricted Common Stock vest on the first anniversary of the date of grant and the remaining two-thirds of the shares vest over the subsequent two-year period in eight equal quarterly increments. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $0.3 million.

On September 23, 2024, the Company granted, with the approval of the Company’s compensation committee, 90,909 shares of fully-vested restricted Common Stock, in the aggregate, to its Sr. Vice President and Chief Financial Officer under the Plan. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $0.1 million.

On September 23, 2024, the Company granted, with the approval of the Company’s compensation committee, 10-year options to purchase 1,015,725 shares of Common Stock, in the aggregate, to certain of the Company’s officers and other employees under the Plan. The options have an exercise price equal to $1.10 per share and vest over a three-year period in 12 equal quarterly increments. Vesting of the options granted to executive officers is subject to automatic acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan, and are subject to certain other terms and conditions. The Company estimated the aggregate fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $0.8 million.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478448/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org/505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details