Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PLX | |
Entity Registrant Name | PROTALIX BIOTHERAPEUTICS, INC. | |
Entity Central Index Key | 1006281 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 93,602,152 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $47,958 | $54,767 |
Accounts receivable - Trade | 1,816 | 1,884 |
Other assets | 2,931 | 2,202 |
Inventories | 6,879 | 6,667 |
Total current assets | 59,584 | 65,520 |
FUNDS IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT | 1,520 | 1,555 |
PROPERTY AND EQUIPMENT, NET | 10,839 | 11,282 |
DEFERRED CHARGES | 105 | 113 |
Total assets | 72,048 | 78,470 |
Accounts payable and accruals: | ||
Trade | 5,195 | 3,951 |
Other | 14,282 | 15,496 |
Deferred revenues | 7,072 | 6,763 |
Total current liabilities | 26,549 | 26,210 |
LONG TERM LIABILITIES: | ||
Convertible notes | 67,566 | 67,464 |
Deferred revenues | 36,890 | 37,232 |
Liability in connection with collaboration operation | 912 | |
Liability for employee rights upon retirement | 2,197 | 2,253 |
Total long term liabilities | 106,653 | 107,861 |
Total liabilities | 133,202 | 134,071 |
COMMITMENTS | ||
CAPITAL DEFICIENCY | -61,154 | -55,601 |
Total liabilities net of capital deficiency | $72,048 | $78,470 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
REVENUES | $4,392 | $6,696 |
COMPANY'S SHARE IN COLLABORATION AGREEMENT | 705 | 687 |
COST OF REVENUES | -2,400 | -4,073 |
GROSS PROFIT | 2,697 | 3,310 |
RESEARCH AND DEVELOPMENT EXPENSES | -6,762 | -8,152 |
Less - grants and reimbursements | 1,135 | 2,085 |
RESEARCH AND DEVELOPMENT EXPENSES, NET | -5,627 | -6,067 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | -1,913 | -3,711 |
OPERATING LOSS | -4,843 | -6,468 |
FINANCIAL EXPENSES | -1,157 | -915 |
FINANCIAL INCOME | 28 | 38 |
FINANCIAL EXPENSES - NET | -1,129 | -877 |
NET LOSS FOR THE PERIOD | ($5,972) | ($7,345) |
NET LOSS PER SHARE OF COMMON STOCK | ||
NET LOSS PER SHARE OF COMMON STOCK - BASIC AND DILUTED | $0.06 | $0.08 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING LOSS PER SHARE - BASIC AND DILUTED: | ||
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING LOSS PER SHARE-BASIC AND DILUTED | 93,200,739 | 92,686,638 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Research and Development Expense [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation | $126 | $428 |
General and Administrative Expense [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation | $293 | $242 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIENCY (USD $) | 3 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | |
Balance | ($55,601) | ($26,946) | |
Share-based compensation related to stock options | 202 | 162 | |
Share-based compensation related to restricted stock award, net of forfeitures | 217 | 508 | |
Exercise of options granted to employees (includes net exercise) | 43 | ||
Net loss for the period | -5,972 | -7,345 | |
Balance | -61,154 | -33,578 | |
Common Stock [Member] | |||
Balance, shares | 93,603,819 | 93,551,098 | |
Balance | 94 | 94 | |
Share-based compensation related to stock options | |||
Share-based compensation related to restricted stock award, net of forfeitures | |||
Share-based compensation related to restricted stock award, net of forfeitures (shares) | -1,667 | ||
Exercise of options granted to employees (includes net exercise) | [1] | ||
Exercise of options granted to employees (includes net exercise), shares | 55,362 | ||
Net loss for the period | |||
Balance | 94 | 94 | |
Balance, shares | 93,602,152 | 93,606,460 | |
Additional Paid-in Capital [Member] | |||
Balance | 185,633 | 184,345 | |
Share-based compensation related to stock options | 202 | 162 | |
Share-based compensation related to restricted stock award, net of forfeitures | 217 | 508 | |
Exercise of options granted to employees (includes net exercise) | 43 | ||
Net loss for the period | |||
Balance | 186,052 | 185,058 | |
Accumulated Deficit [Member] | |||
Balance | -241,328 | -211,385 | |
Share-based compensation related to stock options | |||
Share-based compensation related to restricted stock award, net of forfeitures | |||
Exercise of options granted to employees (includes net exercise) | |||
Net loss for the period | -5,972 | -7,345 | |
Balance | ($247,300) | ($218,730) | |
[1] | Represents an amount less than $1. |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL DEFICIENCY (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based compensation related to restricted stock award, forfeitures | 1,667 | |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($5,972) | ($7,345) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Share based compensation | 419 | 670 |
Depreciation | 616 | 828 |
Financial expenses, net (mainly exchange differences) | 284 | 14 |
Changes in accrued liability for employee rights upon retirement | -4 | 50 |
Gain on amounts funded in respect of employee rights upon retirement | -1 | -1 |
Amortization of debt issuance costs and debt discount | 110 | 109 |
Changes in operating assets and liabilities: | ||
Decrease in deferred revenues (including non-current portion) | -33 | -2,901 |
Increase in accounts receivable and other assets | -735 | -744 |
Decrease (increase) in inventories | -212 | 1,430 |
Decrease in accounts payable and accruals (including long term ) | -893 | -450 |
Net cash used in operating activities | -6,421 | -8,340 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | -99 | -263 |
Investment in restricted deposit | -57 | |
Amounts funded in respect of employee rights upon retirement, net | -50 | |
Net cash used in investing activities | -99 | -370 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Exercise of options | 31 | |
Net cash provided by financing activities | 31 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -289 | -29 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | -6,809 | -8,708 |
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 54,767 | 86,398 |
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | 47,958 | 77,690 |
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||
Purchase of property and equipment | 194 | 138 |
Exercise of options granted to employees | 12 | |
SUPPLEMENTARY DISCLOSURE ON CASH FLOWS | ||
Interest paid | $1,553 | $1,527 |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||
Mar. 31, 2015 | |||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES | ||
a. | General | ||
Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”), and its wholly-owned subsidiary, Protalix Ltd., are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company's proprietary ProCellEx® protein expression system (“ProCellEx”). In September 2009, Protalix Ltd. formed another wholly-owned subsidiary under the laws of the Netherlands, Protalix B.V., in connection with the European Medicines Agency (“EMA”) application process in the European Union. The Company's two subsidiaries are referred to collectively herein as the “Subsidiaries.” | |||
On May 1, 2012, the U.S. Food and Drug Administration (“FDA”) approved taliglucerase alfa for injection, the Company's first approved drug product, as an enzyme replacement therapy (ERT) for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. Taliglucerase alfa is a proprietary, recombinant form of glucocerebrosidase (GCD) that the Company developed using ProCellEx. Taliglucerase alfa was also approved by the Israeli Ministry of Health (the “Israeli MOH”) in September 2012, by the Brazilian Ministry of Health (the “Brazilian MOH”) in March 2013 and by the applicable regulatory authorities of certain other countries. Taliglucerase alfa is the first plant cell-based recombinant therapeutic protein approved by the FDA or any other major regulatory authority. | |||
In August 2014, the FDA approved taliglucerase alfa for injection for pediatric patients. Subsequently, in January 2015, the pediatric indication was approved by the Israeli Ministry of Health (the “Israeli MoH”). Prior to these approvals, taliglucerase alfa was approved for pediatric indications in Australia and Canada but in no other jurisdiction. | |||
Taliglucerase alfa is being marketed in the United States under the brand name Elelyso™ by Pfizer Inc. (“Pfizer”), the Company's commercialization partner, as provided in the exclusive license and supply agreement by and between Protalix Ltd. and Pfizer (the “Pfizer Agreement”). The Company, through Protalix Ltd., markets Elelyso in Israel, and in Brazil under the brand name Uplyso™. | |||
Protalix Ltd. granted Pfizer an exclusive, worldwide license to develop and commercialize taliglucerase alfa under the Pfizer Agreement, but retained those rights in Israel and, since 2014, in Brazil (see below). The Company has agreed to a specific allocation between Protalix Ltd. and Pfizer regarding the responsibilities for the continued development efforts for taliglucerase alfa. To date, the Company has received an upfront payment of $60.0 million in connection with the execution of the Pfizer Agreement and additional $30.0 million milestone payment mainly in connection with the FDA's approval of taliglucerase alfa in the United States. The agreement provides that the Company share with Pfizer the net profits or loss related to the development and commercialization of taliglucerase alfa on a 40% and 60% basis, respectively, except with respect to the profits or losses related to commercialization efforts in Israel and Brazil, where the Company retains exclusive marketing rights. In calculating the net profits or losses under the agreement, there are certain agreed upon limits on the amounts that may be deducted from gross sales for certain expenses and costs of goods sold. | |||
On June 18, 2013, Protalix Ltd. entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian MOH, for taliglucerase alfa. The first term of the technology transfer is seven years and the agreement may be extended for an additional five-year term, as needed, to complete the technology transfer. The technology transfer is designed to be effected in four stages and is intended to transfer to Fiocruz the capacity and skills required for the Brazilian government to construct its own manufacturing facility, at its sole expense, and to produce a sustainable, high quality, and cost effective supply of taliglucerase alfa. Under the agreement, Fiocruz committed to purchase at least approximately $40 million worth of taliglucerase alfa during the first two years of the agreement. With respect to the first required purchase amount, the Company has recorded revenues of approximately $3.5 million for sales of taliglucerase alfa to Fiocruz in 2014, and revenues of approximately $1.7 million for sales of taliglucerase alfa to Fiocruz during the three months ended March 31, 2015. In subsequent years, Fiocruz is required to purchase at least approximately $40 million worth of taliglucerase alfa per year. Additionally, Protalix Ltd. is not required to complete the final stage of the technology transfer until Fiocruz purchases at least approximately $280 million worth of taliglucerase alfa. The Brazil Agreement became effective during January 2014. | |||
Under the agreement, if Fiocruz does not purchase an additional approximately $30 million of Uplyso by July 31, 2015, the Company will have the right to terminate the agreement, in which case all rights to the technology that were transferred to Fiocruz will be returned to the Company. | |||
In September 2014, CONITEC, the National Commission for Incorporation of Technologies in Brazil's Unified Healthcare System, announced that it had decided to give a positive funding recommendation for taliglucerase alfa in the treatment of adult patients with types 1 and 3 Gaucher disease, and established that taliglucerase alfa will be the first choice for treatment for new adult Gaucher patients in Brazil. | |||
To facilitate the arrangement with Fiocruz, Pfizer amended its exclusive license and supply agreement with Protalix Ltd. The amendment provides for the transfer of the commercialization and other rights to taliglucerase alfa in Brazil back to Protalix Ltd. As consideration for the transfer of the commercialization and supply rights, Protalix Ltd. agreed to pay Pfizer a maximum amount of approximately $12.5 million from its net profits (as defined in the license and supply agreement) from sales to Fiocruz, per year. Pfizer has also agreed to perform certain transitional services in Brazil on Protalix Ltd.'s behalf in connection with the supply of taliglucerase alfa to Fiocruz. | |||
Protalix Ltd. is required to pay a fee equal to 5% of the net proceeds generated in Brazil to its agent for services provided in assisting Protalix Ltd. complete the Brazil Agreement pursuant to an agency agreement between Protalix Ltd. and the agent. The agency agreement will remain in effect with respect to the Brazil Agreement until the termination thereof. | |||
In addition to the approvals from the FDA, the Israeli MOH and the Brazilian MOH, marketing approval has been granted to ELELYSO in Canada, Australia, Mexico, Chile, Uruguay and Albania. In addition, the Company is cooperating with Pfizer in its efforts to obtain marketing approval for taliglucerase alfa in additional countries and jurisdictions. Currently, marketing authorization applications have been filed in a number of countries. | |||
Currently, patients are being treated with taliglucerase alfa on a commercial basis mainly in the United States, Brazil, Chile and Israel. | |||
In addition to taliglucerase alfa, the Company is working on the development of certain other products using ProCellEx. | |||
In addition to the approval of taliglucerase alfa for marketing in the United States, Israel, Brazil and other countries, successful completion of the Company's development programs and its transition to normal operations is dependent upon obtaining the foreign regulatory approvals required to sell its products internationally. A substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if at all, and the Company expects to incur substantial expenditures in connection with the regulatory approval process for each of its product candidates during their respective developmental periods. | |||
Obtaining marketing approval with respect to any product candidate in any country is directly dependent on the Company's ability to implement the necessary regulatory steps required to obtain such approvals. The Company cannot reasonably predict the outcome of these activities. | |||
Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that it will not need additional funds prior to such time. If there are unexpected increases in general and administrative expenses or research and development expenses, the Company may need to seek additional financing during the next 12 months. | |||
b. | Basis of presentation | ||
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. | |||
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2014, filed by the Company with the U.S. Securities and Exchange Commission (the "Commission"). The comparative balance sheet at December 31, 2014 has been derived from the audited financial statements at that date. | |||
c. | Net loss per share | ||
Basic and diluted loss per share (“LPS”) are computed by dividing net loss by the weighted average number of shares of the Company's Common Stock, par value $0.001 per share (the “Common Stock”) outstanding for each period. | |||
Diluted LPS does not include 18,913,153 and 19,380,543 shares of Common Stock underlying outstanding options and restricted shares of Common Stock and shares issuable upon conversion of the convertible notes (issued in September 2013) for the three months ended March 31, 2014 and 2015, respectively, because the effect would be anti-dilutive. |
INVENTORIES
INVENTORIES | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
INVENTORIES [Abstract] | |||||||||||||
INVENTORIES | NOTE 2 - INVENTORIES | ||||||||||||
Inventory at March 31, 2015 and December 31, 2014 consisted of the following: | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
(U.S. dollars in thousands) | |||||||||||||
Raw materials | $ | 1,526 | $ | 1,616 | |||||||||
Work in progress | 136 | 132 | |||||||||||
Finished goods | 5,217 | 4,919 | |||||||||||
Total inventory | $ | 6,879 | $ | 6,667 | |||||||||
During the three months ended March 31, 2015, the Company recorded approximately $130,000 for write-down of inventory under cost of revenues. |
FAIR_VALUE_MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2015 | |
FAIR VALUE MEASUREMENT [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 3 – FAIR VALUE MEASUREMENT |
The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received from the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. | |
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: | |
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. | |
The fair value of the financial instruments included in the working capital of the Company is usually identical or close to their carrying value. | |
The fair value of the convertible notes as of March 31, 2015 is approximately $52.8 million based on a level 2 measurement. |
STOCK_TRANSACTIONS
STOCK TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
STOCK TRANSACTIONS [Abstract] | |
STOCK TRANSACTIONS | NOTE 4 – STOCK TRANSACTIONS |
On March 23, 2015, the Company's compensation committee approved the grant of a 10-year option to purchase 1,909,000 shares of Common Stock to its officers and other employees with an exercise price equal to $1.72 per share under the Company's 2006 Employee Stock Incentive Plan, as amended (the “Plan”). The options vest over a four-year period; the first 25% shares vest on the first anniversary of the grant date and the remaining shares vest in 12 equal quarterly increments over the subsequent three-year period. Vesting of the options granted to certain executive officers are subject to acceleration in full upon a Corporate Transaction or a Change in Control, as those terms are defined in the Plan. The Company estimated the fair value of the options on the date of grant using the Black-Scholes option-pricing model to be approximately $1.9 million based on the following weighted average assumptions: dividend yield of 0% for all years; expected volatility of 61.7%; risk-free interest rates of 1.6%; and expected life of six years. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policy) | 3 Months Ended | ||
Mar. 31, 2015 | |||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
General | a. | General | |
Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the “Company”), and its wholly-owned subsidiary, Protalix Ltd., are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company's proprietary ProCellEx® protein expression system (“ProCellEx”). In September 2009, Protalix Ltd. formed another wholly-owned subsidiary under the laws of the Netherlands, Protalix B.V., in connection with the European Medicines Agency (“EMA”) application process in the European Union. The Company's two subsidiaries are referred to collectively herein as the “Subsidiaries.” | |||
On May 1, 2012, the U.S. Food and Drug Administration (“FDA”) approved taliglucerase alfa for injection, the Company's first approved drug product, as an enzyme replacement therapy (ERT) for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. Taliglucerase alfa is a proprietary, recombinant form of glucocerebrosidase (GCD) that the Company developed using ProCellEx. Taliglucerase alfa was also approved by the Israeli Ministry of Health (the “Israeli MOH”) in September 2012, by the Brazilian Ministry of Health (the “Brazilian MOH”) in March 2013 and by the applicable regulatory authorities of certain other countries. Taliglucerase alfa is the first plant cell-based recombinant therapeutic protein approved by the FDA or any other major regulatory authority. | |||
In August 2014, the FDA approved taliglucerase alfa for injection for pediatric patients. Subsequently, in January 2015, the pediatric indication was approved by the Israeli Ministry of Health (the “Israeli MoH”). Prior to these approvals, taliglucerase alfa was approved for pediatric indications in Australia and Canada but in no other jurisdiction. | |||
Taliglucerase alfa is being marketed in the United States under the brand name Elelyso™ by Pfizer Inc. (“Pfizer”), the Company's commercialization partner, as provided in the exclusive license and supply agreement by and between Protalix Ltd. and Pfizer (the “Pfizer Agreement”). The Company, through Protalix Ltd., markets Elelyso in Israel, and in Brazil under the brand name Uplyso™. | |||
Protalix Ltd. granted Pfizer an exclusive, worldwide license to develop and commercialize taliglucerase alfa under the Pfizer Agreement, but retained those rights in Israel and, since 2014, in Brazil (see below). The Company has agreed to a specific allocation between Protalix Ltd. and Pfizer regarding the responsibilities for the continued development efforts for taliglucerase alfa. To date, the Company has received an upfront payment of $60.0 million in connection with the execution of the Pfizer Agreement and additional $30.0 million milestone payment mainly in connection with the FDA's approval of taliglucerase alfa in the United States. The agreement provides that the Company share with Pfizer the net profits or loss related to the development and commercialization of taliglucerase alfa on a 40% and 60% basis, respectively, except with respect to the profits or losses related to commercialization efforts in Israel and Brazil, where the Company retains exclusive marketing rights. In calculating the net profits or losses under the agreement, there are certain agreed upon limits on the amounts that may be deducted from gross sales for certain expenses and costs of goods sold. | |||
On June 18, 2013, Protalix Ltd. entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian MOH, for taliglucerase alfa. The first term of the technology transfer is seven years and the agreement may be extended for an additional five-year term, as needed, to complete the technology transfer. The technology transfer is designed to be effected in four stages and is intended to transfer to Fiocruz the capacity and skills required for the Brazilian government to construct its own manufacturing facility, at its sole expense, and to produce a sustainable, high quality, and cost effective supply of taliglucerase alfa. Under the agreement, Fiocruz committed to purchase at least approximately $40 million worth of taliglucerase alfa during the first two years of the agreement. With respect to the first required purchase amount, the Company has recorded revenues of approximately $3.5 million for sales of taliglucerase alfa to Fiocruz in 2014, and revenues of approximately $1.7 million for sales of taliglucerase alfa to Fiocruz during the three months ended March 31, 2015. In subsequent years, Fiocruz is required to purchase at least approximately $40 million worth of taliglucerase alfa per year. Additionally, Protalix Ltd. is not required to complete the final stage of the technology transfer until Fiocruz purchases at least approximately $280 million worth of taliglucerase alfa. The Brazil Agreement became effective during January 2014. | |||
Under the agreement, if Fiocruz does not purchase an additional approximately $30 million of Uplyso by July 31, 2015, the Company will have the right to terminate the agreement, in which case all rights to the technology that were transferred to Fiocruz will be returned to the Company. | |||
In September 2014, CONITEC, the National Commission for Incorporation of Technologies in Brazil's Unified Healthcare System, announced that it had decided to give a positive funding recommendation for taliglucerase alfa in the treatment of adult patients with types 1 and 3 Gaucher disease, and established that taliglucerase alfa will be the first choice for treatment for new adult Gaucher patients in Brazil. | |||
To facilitate the arrangement with Fiocruz, Pfizer amended its exclusive license and supply agreement with Protalix Ltd. The amendment provides for the transfer of the commercialization and other rights to taliglucerase alfa in Brazil back to Protalix Ltd. As consideration for the transfer of the commercialization and supply rights, Protalix Ltd. agreed to pay Pfizer a maximum amount of approximately $12.5 million from its net profits (as defined in the license and supply agreement) from sales to Fiocruz, per year. Pfizer has also agreed to perform certain transitional services in Brazil on Protalix Ltd.'s behalf in connection with the supply of taliglucerase alfa to Fiocruz. | |||
Protalix Ltd. is required to pay a fee equal to 5% of the net proceeds generated in Brazil to its agent for services provided in assisting Protalix Ltd. complete the Brazil Agreement pursuant to an agency agreement between Protalix Ltd. and the agent. The agency agreement will remain in effect with respect to the Brazil Agreement until the termination thereof. | |||
In addition to the approvals from the FDA, the Israeli MOH and the Brazilian MOH, marketing approval has been granted to ELELYSO in Canada, Australia, Mexico, Chile, Uruguay and Albania. In addition, the Company is cooperating with Pfizer in its efforts to obtain marketing approval for taliglucerase alfa in additional countries and jurisdictions. Currently, marketing authorization applications have been filed in a number of countries. | |||
Currently, patients are being treated with taliglucerase alfa on a commercial basis mainly in the United States, Brazil, Chile and Israel. | |||
In addition to taliglucerase alfa, the Company is working on the development of certain other products using ProCellEx. | |||
In addition to the approval of taliglucerase alfa for marketing in the United States, Israel, Brazil and other countries, successful completion of the Company's development programs and its transition to normal operations is dependent upon obtaining the foreign regulatory approvals required to sell its products internationally. A substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if at all, and the Company expects to incur substantial expenditures in connection with the regulatory approval process for each of its product candidates during their respective developmental periods. | |||
Obtaining marketing approval with respect to any product candidate in any country is directly dependent on the Company's ability to implement the necessary regulatory steps required to obtain such approvals. The Company cannot reasonably predict the outcome of these activities. | |||
Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that it will not need additional funds prior to such time. If there are unexpected increases in general and administrative expenses or research and development expenses, the Company may need to seek additional financing during the next 12 months. | |||
Basis of presentation | b. | Basis of presentation | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments (of a normal recurring nature) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. | |||
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2014, filed by the Company with the U.S. Securities and Exchange Commission (the "Commission"). The comparative balance sheet at December 31, 2014 has been derived from the audited financial statements at that date. | |||
Net loss per share | c. | Net loss per share | |
Basic and diluted loss per share (“LPS”) are computed by dividing net loss by the weighted average number of shares of the Company's Common Stock, par value $0.001 per share (the “Common Stock”) outstanding for each period. | |||
Diluted LPS does not include 18,913,153 and 19,380,543 shares of Common Stock underlying outstanding options and restricted shares of Common Stock and shares issuable upon conversion of the convertible notes (issued in September 2013) for the three months ended March 31, 2014 and 2015, respectively, because the effect would be anti-dilutive. |
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
INVENTORIES [Abstract] | |||||||||||||
Schedule of Inventory | March 31, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
(U.S. dollars in thousands) | |||||||||||||
Raw materials | $ | 1,526 | $ | 1,616 | |||||||||
Work in progress | 136 | 132 | |||||||||||
Finished goods | 5,217 | 4,919 | |||||||||||
Total inventory | $ | 6,879 | $ | 6,667 |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 18, 2013 | Dec. 31, 2014 | Dec. 31, 2009 |
item | |||||
Significant Accounting Policies [Line Items] | |||||
Number of Subsidiaries | 2 | ||||
Common stock, par value per share | $0.00 | $0.00 | |||
Options to purchase common stock not included in diluted LPS because the effect would be anti-dilutive | 19,380,543 | 18,913,153 | |||
Brazil Agreement [Member] | Protalix Ltd. [Member] | Fiocruz [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Revenue from selling products | $1.70 | $3.50 | |||
Supply commitment per year | 40 | ||||
Supply commitment for entitled rights to be received | 280 | ||||
Additional purchase amount by July 31, 2015 | 30 | ||||
License and supply agreement potential future payment | 12.5 | ||||
Pfizer Agreement [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Pfizer Agreement, upfront payment received | 60 | ||||
Pfizer Agreement [Member] | Upon FDAApproval [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Pfizer Agreement, milestone payment amount | $30 | ||||
Pfizer Agreement [Member] | Pfizer Incorporation [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Pfizer Agreement, future revenues and expense sharing percentage | 60.00% | ||||
Pfizer Agreement [Member] | Protalix Bio Therapeutics Incorporation [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Pfizer Agreement, future revenues and expense sharing percentage | 40.00% |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
INVENTORIES [Abstract] | ||
Raw materials | $1,526,000 | $1,616,000 |
Work in process | 136,000 | 132,000 |
Finished goods | 5,217,000 | 4,919,000 |
Total inventory | 6,879,000 | 6,667,000 |
Inventory write-down | $130,000 |
FAIR_VALUE_MEASUREMENT_Details
FAIR VALUE MEASUREMENT (Details) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
FAIR VALUE MEASUREMENT [Abstract] | |
Fair value convertible notes | $52.80 |
STOCK_TRANSACTIONS_Details
STOCK TRANSACTIONS (Details) (Officers And Certain Employees [Member], Option to purchase shares of common stock [Member], USD $) | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Mar. 23, 2015 |
Class of Stock [Line Items] | |
Option granted (in shares) | 1,909,000 |
Term of option | 10 years |
Exercise price (in dollars per share) | $1.72 |
Vesting period | 4 years |
Fair value of option on the date of grant | $1.90 |
Dividend yield | 0.00% |
Expected volatility | 61.70% |
Risk free interest rate | 1.60% |
Expected life in years | 6 years |
Vest on the first anniversary of the grant date [Member] | |
Class of Stock [Line Items] | |
Percentage of options vested | 25.00% |
Vest over the subsequent quarterly period | |
Class of Stock [Line Items] | |
Number of installments for vesting of stock | 12 |
Vesting period | 3 years |