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NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES<table style="border-collapse:collapse;border:0;"><tr><td style="width:36pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">a.</td><td style="padding:0pt;">General</td></tr></table>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 taliglucerase alfa (marketed under the name BioManguinhos 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 most advanced investigational drug in the Company’s product pipeline is pegunigalsidase alfa, or PRX-102, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder, which is the subject of a phase III clinical program. The PRX-102 phase III clinical program includes three separate studies: the BALANCE study, the BRIDGE study and the BRIGHT study. The studies are designed to evaluate the potential superiority of PRX-102 over current therapies in a head-to-head study and a switch-over study, evaluate the potential for improved efficacy and better quality of life for patients with Fabry disease and evaluate the safety of our drug/therapy. The BRIDGE and BRIGHT studies have been completed, and the BALANCE study is fully-enrolled. See Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Pegunigalsidase Alfa (PRX-102) for the Treatment of Fabry Disease for details regarding the current status of these studies and of available clinical trial results.A BLA for PRX-102 for the treatment of adult patients with Fabry disease was submitted to the U.S. Food and Drug Administration (the “FDA”) on May 27, 2020 under the FDA’s Accelerated Approval pathway, which was subsequently accepted by the FDA and granted Priority Review designation. The FDA also indicated in its BLA filing communication letter that it did not plan to hold an advisory committee meeting to discuss the application. Based on the interim analysis of the 12-month data generated from the BALANCE study that the Company announced in June 2021, and in combination with previously reported positive data from the BRIGHT and BRIDGE studies, the Company and Chiesi intend to submit a Marketing Authorization Application (an “MAA”) to the European Medicines Agency (the “EMA”) for PRX-102.On April 28, 2021, the Company, together with its development and commercialization partner for PRX-102, Chiesi Farmaceutici S.p.A. (“Chiesi”), announced that they received a Complete Response Letter (CRL) from the FDA regarding the BLA. The CRL did not report any concerns relating to the potential safety or efficacy of PRX-102 in the submitted data package. In the CRL, the FDA noted that an inspection of the Company’s manufacturing facility in Carmiel, Israel, including the FDA’s subsequent assessment of any related FDA findings, is required before the FDA can approve a resubmitted BLA. Due to travel restrictions, the FDA was unable to conduct the required inspection during the review cycle. The FDA explained in the letter that it will continue to monitor the public health situation as well as travel restrictions, and is actively working to define an approach for scheduling outstanding inspections. With respect to the third-party facility in Europe at which fill and finish processes are performed for PRX-102, due to the novel coronavirus disease (“COVID-19”), the FDA reviewed records under Section 704(a)(4) of the Federal Food, Drug, and Cosmetic Act (the “FFDCA”) in lieu of a pre-licensing inspection. In the CRL, the FDA stated that it will communicate remaining issues to the facility in order to seek prompt resolution of any pending items.In addition to the foregoing, in the CRL, the FDA noted that agalsidase beta (Fabrazyme®), a therapy used to treat Fabry patients, was recently converted to full approval and is now an “available therapy,” which must be addressed in the context of any potential resubmission of a BLA for PRX-102. The Company intends to work collaboratively with the FDA to identify the most expeditious pathway to approval, and is confident that it will be able to work with the FDA to resolve these issues and provide a new, alternative drug to Fabry patients. On August 2, 2021, the Company announced that a Type A Meeting request has been submitted to the FDA to discuss the CRL. The Type A Meeting is expected to occur within 30 days of the FDA’s receipt of the meeting request; however, the Company cannot anticipate the timing of such a meeting nor the additional steps that may be required in connection with any potential resubmission.In addition to PRX-102, the Company’s product pipeline currently includes, among other candidates:<table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:10pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(1)</td><td style="padding:0pt;">alidornase alfa, or PRX-110, a proprietary plant cell recombinant human Deoxyribonuclease 1, or DNase, which is subject to an exclusive worldwide license agreement with SarcoMed USA, Inc. (“SarcoMed”) for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled delivery;</td></tr></table><table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:10pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(2)</td><td style="padding:0pt;">PRX-115, the Company’s plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat refractory gout; and</td></tr></table><table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:0pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(3)</td><td style="padding:0pt;">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.</td></tr></table><div style="margin-top:10pt;"/>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 July 2, 2021, the Company entered into an At The Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agent shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $20.0 million (the “ATM Shares”). Upon execution of the Sales Agreement, the Company terminated the ATM Equity OfferingSM Sales Agreement it had entered into on October 1, 2020 with BofA Securities, Inc. (“BofA Securities”). The Company sold a total of 3,296,123 shares of common stock pursuant to the sales agreement with BofA Securities for total gross proceeds of approximately $13.8 million.On February 10, 2021, the Company entered into an exclusive worldwide license agreement with SarcoMed with respect to PRX-110 for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled delivery. Under the terms of the agreement, SarcoMed will be responsible for the identification and selection of pharmaceutical candidates under the license, and the clinical research and development of such candidates. The Company is entitled to an initial cash payment of $3.5 million, subject to certain conditions, and to additional regulatory and commercial milestone payments and tiered royalties on net sales of products that are commercialized under the license agreement. In addition to the foregoing, the parties agreed to commence negotiation of clinical and commercial supply agreements for alidornase alfa. As part of the arrangement, the parties agreed to negotiate and sign a supply agreement within 60 days of the execution of the license agreement, and SarcoMed has the right to terminate the license agreement if the parties do not successfully do so.On February 17, 2021, the Company issued and sold 8,749,999 shares of its Common Stock in an underwritten public offering raising gross proceeds of approximately $40.2 million at a price equal to $4.60 per share, before deducting the underwriting discount and estimated expenses of the offering. BofA Securities acted as book-running manager for the offering with Oppenheimer & Co. acting as co-manager.On October 19, 2017, Protalix Ltd. and Chiesi entered into an Exclusive License and Supply Agreement (the “Chiesi Ex-US Agreement”) pursuant to which Protalix Ltd. granted to Chiesi 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 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, 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 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.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.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 in exchange for a $25.0 million reduction in a longer term regulatory milestone payment in the Chiesi EX-US Agreement. All other regulatory and commercial milestone payments remain unchanged. The Company received the payment in June 2021. The Company also agreed to negotiate certain manufacturing related matters.Since its approval by the FDA, taliglucerase alfa has been marketed by Pfizer in accordance with the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into an amended exclusive license and supply agreement (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 Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”), for taliglucerase alfa. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed-upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz under the Brazil Agreement, and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil.COVID-19, which was declared by the World Health Organization to be a global pandemic on March 11, 2020, has had numerous adverse effects on the global economy. To date, the Company’s clinical trials have not been adversely affected by COVID-19, although certain practices the Company has adopted in its offices and facilities in an effort to promote social distancing have resulted in minor delays in the performance of administrative activities outside of the clinical programs. We continue to face uncertainty as to the degree and duration of that impact going forward. The Company does not know the length of time that the pandemic and related disruptions will continue, the impact of governmental regulations or easement of regulations in response to the strengthening or weakening of the pandemic, or the degree of overall potentially permanent changes in consumer behavior that may be caused by the pandemic.The Company believes that its cash and cash equivalents and bank deposits as of June 30, 2021 are sufficient to satisfy the Company’s capital needs for at least 12 months from the date that these financial statements are issued. See also Note 6 regarding the exchange agreements relating to the 7.5% convertible secured promissory notes due 2021 (the “2021 Notes”) signed in August 2021 which are subject to certain closing conditions.<table style="border-collapse:collapse;border:0;"><tr><td style="width:36pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">b.</td><td style="padding:0pt;">Basis of presentation</td></tr></table>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, 2020, filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). The comparative balance sheet at December 31, 2020 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, 2020.<table style="border-collapse:collapse;border:0;"><tr><td style="width:36pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">c.</td><td style="padding:0pt;">Loss per share</td></tr></table>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 attributable to common stockholders outstanding for each period. The calculation of diluted LPS does not include 18,445,764 and 26,322,164 shares of Common Stock underlying outstanding options and shares of Common Stock issuable upon conversion of outstanding 2021 Notes and outstanding warrants for the six months ended June 30, 2020 and 2021, respectively, and 25,997,289 and 25,874,641 shares of Common Stock underlying outstanding options and shares issuable upon conversion of outstanding 2021 Notes and outstanding warrants for the three months ended June 30, 2020 and 2021, respectively because their effect would be anti-dilutive.<table style="border-collapse:collapse;border:0;"><tr><td style="width:36pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">d.</td><td style="padding:0pt;">Revenue recognition</td></tr></table>The Company accounts for revenue pursuant to Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, a contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer.<table style="border-collapse:collapse;border:0;"><tr><td style="width:54pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">1.</td><td style="padding:0pt;">Revenues from selling products</td></tr></table>The Company recognizes revenues from selling goods at a point in time when control over the product is transferred to customers (upon delivery).<table style="border-collapse:collapse;border:0;"><tr><td style="width:54pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">2.</td><td style="padding:0pt;">Revenue from Chiesi Agreements</td></tr></table>The Company has identified two performance obligations in Chiesi agreements as follows: (1) the license and research and development services and (2) the contingent performance obligation regarding future manufacturing.The Company determined that the license together with the research and development services should be combined into single performance obligation since Chiesi cannot benefit from the license without the research and development services. The research and development services are highly specialized and are dependent on the supply of the drug.The future manufacturing is contingent on regulatory approvals of the drug and the Company deems these services to be separately identifiable from other performance obligations in the contract. Manufacturing services post-regulatory approval are not interdependent or interrelated with the license and research and development services.The transaction price was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which the Company would be entitled upon the achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration. The Company estimates variable consideration using the most likely method. Amounts included in the transaction price are recognized only when it is probable that a significant reversal of cumulative revenues will not occur. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue.Since the customer benefits from the research and development services as the entity performs the service, revenue from granting the license and the research and development services is recognized over time using the cost-to-cost method. The Company used significant judgment when it determined the costs expected to be incurred upon satisfying the identified performance obligation.Revenue from additional research and development services ordered by Chiesi is recognized over time using the cost-to-cost method.<table style="border-collapse:collapse;border:0;"><tr><td style="width:54pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">3.</td><td style="padding:0pt;">Revenue from R&D services</td></tr></table>Revenue from the research and development services is recognized over time using the cost-to-cost method since the customer benefits from the research and development services as the entity performs the service.

<table style="border-collapse:collapse;border:0;"><tr><td style="width:36pt;padding:0pt;"/><td style="vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">a.</td><td style="padding:0pt;">General</td></tr></table>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 taliglucerase alfa (marketed under the name BioManguinhos 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 most advanced investigational drug in the Company’s product pipeline is pegunigalsidase alfa, or PRX-102, a therapeutic protein candidate for the treatment of Fabry disease, a rare, genetic lysosomal disorder, which is the subject of a phase III clinical program. The PRX-102 phase III clinical program includes three separate studies: the BALANCE study, the BRIDGE study and the BRIGHT study. The studies are designed to evaluate the potential superiority of PRX-102 over current therapies in a head-to-head study and a switch-over study, evaluate the potential for improved efficacy and better quality of life for patients with Fabry disease and evaluate the safety of our drug/therapy. The BRIDGE and BRIGHT studies have been completed, and the BALANCE study is fully-enrolled. See Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Pegunigalsidase Alfa (PRX-102) for the Treatment of Fabry Disease for details regarding the current status of these studies and of available clinical trial results.A BLA for PRX-102 for the treatment of adult patients with Fabry disease was submitted to the U.S. Food and Drug Administration (the “FDA”) on May 27, 2020 under the FDA’s Accelerated Approval pathway, which was subsequently accepted by the FDA and granted Priority Review designation. The FDA also indicated in its BLA filing communication letter that it did not plan to hold an advisory committee meeting to discuss the application. Based on the interim analysis of the 12-month data generated from the BALANCE study that the Company announced in June 2021, and in combination with previously reported positive data from the BRIGHT and BRIDGE studies, the Company and Chiesi intend to submit a Marketing Authorization Application (an “MAA”) to the European Medicines Agency (the “EMA”) for PRX-102.On April 28, 2021, the Company, together with its development and commercialization partner for PRX-102, Chiesi Farmaceutici S.p.A. (“Chiesi”), announced that they received a Complete Response Letter (CRL) from the FDA regarding the BLA. The CRL did not report any concerns relating to the potential safety or efficacy of PRX-102 in the submitted data package. In the CRL, the FDA noted that an inspection of the Company’s manufacturing facility in Carmiel, Israel, including the FDA’s subsequent assessment of any related FDA findings, is required before the FDA can approve a resubmitted BLA. Due to travel restrictions, the FDA was unable to conduct the required inspection during the review cycle. The FDA explained in the letter that it will continue to monitor the public health situation as well as travel restrictions, and is actively working to define an approach for scheduling outstanding inspections. With respect to the third-party facility in Europe at which fill and finish processes are performed for PRX-102, due to the novel coronavirus disease (“COVID-19”), the FDA reviewed records under Section 704(a)(4) of the Federal Food, Drug, and Cosmetic Act (the “FFDCA”) in lieu of a pre-licensing inspection. In the CRL, the FDA stated that it will communicate remaining issues to the facility in order to seek prompt resolution of any pending items.In addition to the foregoing, in the CRL, the FDA noted that agalsidase beta (Fabrazyme®), a therapy used to treat Fabry patients, was recently converted to full approval and is now an “available therapy,” which must be addressed in the context of any potential resubmission of a BLA for PRX-102. The Company intends to work collaboratively with the FDA to identify the most expeditious pathway to approval, and is confident that it will be able to work with the FDA to resolve these issues and provide a new, alternative drug to Fabry patients. On August 2, 2021, the Company announced that a Type A Meeting request has been submitted to the FDA to discuss the CRL. The Type A Meeting is expected to occur within 30 days of the FDA’s receipt of the meeting request; however, the Company cannot anticipate the timing of such a meeting nor the additional steps that may be required in connection with any potential resubmission.In addition to PRX-102, the Company’s product pipeline currently includes, among other candidates:<table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:10pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(1)</td><td style="padding:0pt;">alidornase alfa, or PRX-110, a proprietary plant cell recombinant human Deoxyribonuclease 1, or DNase, which is subject to an exclusive worldwide license agreement with SarcoMed USA, Inc. (“SarcoMed”) for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled delivery;</td></tr></table><table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:10pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(2)</td><td style="padding:0pt;">PRX-115, the Company’s plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat refractory gout; and</td></tr></table><table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:0pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:54pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">(3)</td><td style="padding:0pt;">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.</td></tr></table><div style="margin-top:10pt;"/>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 July 2, 2021, the Company entered into an At The Market Offering Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agent shares of its common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $20.0 million (the “ATM Shares”). Upon execution of the Sales Agreement, the Company terminated the ATM Equity OfferingSM Sales Agreement it had entered into on October 1, 2020 with BofA Securities, Inc. (“BofA Securities”). The Company sold a total of 3,296,123 shares of common stock pursuant to the sales agreement with BofA Securities for total gross proceeds of approximately $13.8 million.On February 10, 2021, the Company entered into an exclusive worldwide license agreement with SarcoMed with respect to PRX-110 for use in the treatment of any human respiratory disease or condition including, but not limited to, sarcoidosis, pulmonary fibrosis, and other related diseases via inhaled delivery. Under the terms of the agreement, SarcoMed will be responsible for the identification and selection of pharmaceutical candidates under the license, and the clinical research and development of such candidates. The Company is entitled to an initial cash payment of $3.5 million, subject to certain conditions, and to additional regulatory and commercial milestone payments and tiered royalties on net sales of products that are commercialized under the license agreement. In addition to the foregoing, the parties agreed to commence negotiation of clinical and commercial supply agreements for alidornase alfa. As part of the arrangement, the parties agreed to negotiate and sign a supply agreement within 60 days of the execution of the license agreement, and SarcoMed has the right to terminate the license agreement if the parties do not successfully do so.On February 17, 2021, the Company issued and sold 8,749,999 shares of its Common Stock in an underwritten public offering raising gross proceeds of approximately $40.2 million at a price equal to $4.60 per share, before deducting the underwriting discount and estimated expenses of the offering. BofA Securities acted as book-running manager for the offering with Oppenheimer & Co. acting as co-manager.On October 19, 2017, Protalix Ltd. and Chiesi entered into an Exclusive License and Supply Agreement (the “Chiesi Ex-US Agreement”) pursuant to which Protalix Ltd. granted to Chiesi 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 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, 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 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.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.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 in exchange for a $25.0 million reduction in a longer term regulatory milestone payment in the Chiesi EX-US Agreement. All other regulatory and commercial milestone payments remain unchanged. The Company received the payment in June 2021. The Company also agreed to negotiate certain manufacturing related matters.Since its approval by the FDA, taliglucerase alfa has been marketed by Pfizer in accordance with the Pfizer Agreement. In October 2015, Protalix Ltd. and Pfizer entered into an amended exclusive license and supply agreement (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 Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”), for taliglucerase alfa. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed-upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz under the Brazil Agreement, and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil.COVID-19, which was declared by the World Health Organization to be a global pandemic on March 11, 2020, has had numerous adverse effects on the global economy. To date, the Company’s clinical trials have not been adversely affected by COVID-19, although certain practices the Company has adopted in its offices and facilities in an effort to promote social distancing have resulted in minor delays in the performance of administrative activities outside of the clinical programs. We continue to face uncertainty as to the degree and duration of that impact going forward. The Company does not know the length of time that the pandemic and related disruptions will continue, the impact of governmental regulations or easement of regulations in response to the strengthening or weakening of the pandemic, or the degree of overall potentially permanent changes in consumer behavior that may be caused by the pandemic.The Company believes that its cash and cash equivalents and bank deposits as of June 30, 2021 are sufficient to satisfy the Company’s capital needs for at least 12 months from the date that these financial statements are issued. See also Note 6 regarding the exchange agreements relating to the 7.5% convertible secured promissory notes due 2021 (the “2021 Notes”) signed in August 2021 which are subject to certain closing conditions.

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NOTE 2 - INVENTORIESInventories at June 30, 2021 and December 31, 2020 consisted of the following:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.25%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">December 31, </td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">(U.S. dollars in thousands)</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.25%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Raw materials</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"> 3,046</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"> 3,347</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Work in progress</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"> 3,065</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"> 2,887</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Finished goods</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.36%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:8.98%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 7,529</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.67%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 6,848</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Total inventory</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 13,640</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 13,082</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr></table>

Inventories at June 30, 2021 and December 31, 2020 consisted of the following:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.25%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">December 31, </td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">(U.S. dollars in thousands)</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.25%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Raw materials</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"> 3,046</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"> 3,347</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Work in progress</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;margin:0pt;padding:0pt;"> 3,065</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;margin:0pt;padding:0pt;"> 2,887</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Finished goods</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.36%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:8.98%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 7,529</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.67%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 6,848</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:72.38%;margin:0pt;padding:0pt;">Total inventory</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.36%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:8.98%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 13,640</td><td style="vertical-align:bottom;white-space:nowrap;width:2.22%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.67%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 13,082</td><td style="vertical-align:bottom;white-space:nowrap;width:1.58%;margin:0pt;padding:0pt;"></td></tr></table>

3046000

3347000

3065000

2887000

7529000

6848000

13640000

13082000

NOTE 3 – FAIR VALUE MEASUREMENTThe 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.As of June 30, 2021, the carrying amounts of short-term deposits approximate their fair values due to the stated interest rates, which approximate market rates.The fair value of the $57.9 million aggregate principal amount of the Company’s outstanding 2021 Notes as of June 30, 2021 is approximately $57.6 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, 2021. 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:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021 Notes</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Stock price (USD)</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 1.91</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Expected term</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 0.38</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Risk free rate</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 0.05</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Volatility</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 77.42</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Yield</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 11.16</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr></table>

57900000

57600000

The Company prepared a valuation of the fair value of the Company’s outstanding 2021 Notes (a Level 3 valuation) as of June 30, 2021. 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:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021 Notes</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Stock price (USD)</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 1.91</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Expected term</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 0.38</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Risk free rate</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 0.05</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr><tr><td style="vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Volatility</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 77.42</td><td style="vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:84.89%;margin:0pt;padding:0pt;">Yield</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;"> </td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.66%;margin:0pt;padding:0pt;"> 11.16</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.71%;margin:0pt;padding:0pt;">%</td></tr></table>

1.91

0.38

0.05

77.42

11.16

NOTE 4 – REVENUESThe following table summarizes the Company’s disaggregation of revenues:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="5" style="vertical-align:bottom;white-space:nowrap;width:24.4%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">Three Months Ended June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td colspan="5" style="vertical-align:bottom;white-space:nowrap;width:24.37%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">Six Months Ended June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">(U.S. dollars in thousands)</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.68%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.52%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.15%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.15%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Pfizer</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"> 2,237</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"> 663</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 6,748</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 2,679</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Brazil</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"> 988</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"> 2,985</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 988</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 6,000</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Chiesi</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 18</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> —</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 18</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> —</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Total revenues from selling goods</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,243</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,648</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 7,754</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 8,679</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Revenues from license and R&D services</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,184</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 7,319</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 9,993</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 23,934</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr></table>During the six months ended June 30, 2020, and following the CRL received from the FDA, the Company changed its estimate for total costs expected to be incurred until satisfying the performance obligation under the Chiesi Agreements. This resulted in a reduction to accumulated revenues recognized in respect of this performance obligation in the amount of $4.1 million.During the six months ended June 30, 2021 and 2020, the Company recognized revenues of approximately $0.9 million and $1.2 million, respectively, and during each of the three months ended June 30, 2021 and 2020, the Company recognized revenues of approximately $0.5 million all related to a $10.0 million future milestone payment, which was accounted for as a variable consideration. The $10.0 million payment was received in June 2021.

The following table summarizes the Company’s disaggregation of revenues:<table style="border-collapse:collapse;font-size:16pt;height:max-content;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:80%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"></div></div></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="5" style="vertical-align:bottom;white-space:nowrap;width:24.4%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">Three Months Ended June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td colspan="5" style="vertical-align:bottom;white-space:nowrap;width:24.37%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">Six Months Ended June 30, </td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">(U.S. dollars in thousands)</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.68%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:10.52%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.15%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2021</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"> </td><td colspan="2" style="vertical-align:bottom;white-space:nowrap;width:11.15%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">2020</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Pfizer</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"> 2,237</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"> 663</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 6,748</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 2,679</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Brazil</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;margin:0pt;padding:0pt;"> 988</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;margin:0pt;padding:0pt;"> 2,985</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 988</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;margin:0pt;padding:0pt;"> 6,000</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Chiesi</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 18</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> —</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> 18</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"> —</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Total revenues from selling goods</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,243</td><td style="vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,648</td><td style="vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 7,754</td><td style="vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 8,679</td><td style="vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:45.99%;margin:0pt;padding:0pt;">Revenues from license and R&D services</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.38%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:10.3%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 3,184</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.19%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.37%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.14%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 7,319</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.16%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 9,993</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.06%;margin:0pt;padding:0pt;"></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.26%;border-bottom:3px double #000000;margin:0pt;padding:0pt;">$</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:9.89%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"> 23,934</td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:0.99%;margin:0pt;padding:0pt;"></td></tr></table>

2237000

663000

6748000

2679000

988000

2985000

988000

6000000

18000

3243000

3648000

7754000

8679000

3184000

7319000

9993000

23934000

4100000

900000

1200000

500000

10000000.0 10000000.0

NOTE 5 – STOCK TRANSACTIONS<table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:12pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:36pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">a.</td><td style="padding:0pt;">On June 7, 2021, the Company issued 173,816 shares of Common Stock in connection with the cashless exercise of a warrant to purchase 2,816,901 shares of Common Stock issued on March 18, 2020, as part of the Company’s private placement of Common Stock and warrants. The Company did not generate any proceeds from the cashless exercise.</td></tr></table><table style="border-collapse:collapse;font-family:'Times New Roman','Times','serif';font-size:10pt;margin-bottom:0pt;margin-top:0pt;table-layout:fixed;width:100%;border:0pt;"><tr><td style="width:36pt;"/><td style="font-family:'Times New Roman';font-size:10pt;vertical-align:text-top;white-space:nowrap;width:18pt;padding:0pt;">b.</td><td style="padding:0pt;">On July 2, 2021, the Company entered into the Sales Agreement with the Agent. Pursuant to the terms of the 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. The ATM Shares will be issued pursuant to the Company’s shelf registration statement on Form S-3. The Company intends to use the net proceeds from the offering, after deducting the Agent’s commissions and the Company’s offering expenses, for general corporate purposes. Upon execution of the Sales Agreement, the Company terminated the ATM Equity OfferingSM Sales Agreement it had entered into on October 1, 2020 with BofA Securities.</td></tr></table><div style="margin-top:12pt;"/>

173816

2816901

20000000.0

NOTE 6 – SUBSEQUENT EVENTSAs of June 30, 2021, the Company has outstanding $57.9 million aggregate principal amount of 2021 Notes.On August 12, 2021, the Company entered into definitive agreements relating to private exchanges (the “Exchanges”) of an aggregate of $54.65 million principal amount of the Company’s outstanding 2021 Notes for an aggregate of $28.75 million principal amount of 7.50% Senior Secured Convertible Notes due 2024 (the “2024 Notes”), $25.90 million in cash, and accrued and unpaid interest through the issue date. The Exchanges are expected to close as soon as practicable, subject to satisfaction of certain closing conditions. The initial conversion rate for the 2024 Notes is 563.2216 shares of Common Stock for each $1,000 principal amount of 2024 Notes (equivalent to an initial conversion price of approximately $1.7755 per share of the Common Stock), subject to adjustment in some events, which is based on a 32.5% premium to the closing price of the Common Stock on the NYSE American at the close of trading on August 13, 2021, the exchange date.The 2024 Notes will be issued pursuant to an indenture to be entered into between the Company, the guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Savings Fund Society, FSB, as collateral agent. Interest on the Notes will be paid semi-annually at a rate of 7.50% per annum. The Notes will mature three years after the issuance thereof, unless earlier purchased, converted, exchanged or redeemed and will be guaranteed by the Company’s subsidiaries. The 2024 Notes will be secured by perfected liens on all of the assets of the Company and its subsidiaries.

57900000

54650000

28750000

0.0750

25900000 563.2216 1000

1.7755

0.325

0.0750

P3Y

Common stock, $0.001 par value; Authorized – as of June 30, 2021 and 2020 - 120,000,000 shares. (1) Includes share-based compensation (2) Includes share-based compensation (3) Includes share-based compensation