Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Document Type | S-4 |
Amendment Flag | false |
Entity Registrant Name | ANCHIANO THERAPEUTICS LTD. |
Entity Central Index Key | 0001534248 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||||||||
Cash and cash equivalents | $ 6,768 | $ 17,575 | $ 23,241 | $ 7,517 | ||||
Funds in respect of employee rights upon retirement | 228 | |||||||
Receivables | 408 | 3,403 | ||||||
Prepaid expenses and other | 620 | 636 | ||||||
Total current assets | 7,388 | 18,211 | 10,920 | |||||
Other non-current assets | 52 | 187 | ||||||
NON-CURRENT ASSETS: | ||||||||
Long-term prepaid expenses | 57 | 1,115 | ||||||
Long-term pledged deposits | 130 | 120 | ||||||
Funds in respect of employee rights upon retirement | 221 | |||||||
Property and equipment, net | 15 | 158 | 385 | |||||
Operating lease right-of-use | 234 | 1,199 | $ 1,809 | |||||
TOTAL NON-CURRENT ASSETS | 1,544 | 1,841 | ||||||
Total assets | 7,689 | 19,755 | 12,761 | |||||
Current liabilities: | ||||||||
Trade payables | 482 | 875 | 396 | |||||
Accrued expenses and other | 1,620 | 2,855 | ||||||
Operating lease liability | 173 | 391 | $ 1,726 | |||||
Other payables | 2,296 | 1,706 | ||||||
Short-term employee benefits | 297 | 644 | ||||||
Liability for employee rights upon retirement | 262 | |||||||
Total current liabilities | 2,275 | 4,121 | 2,746 | |||||
LONG-TERM LIABILITIES: | ||||||||
Liability for employee rights upon retirement | 210 | |||||||
Non-current operating lease liability | 63 | 725 | ||||||
TOTAL LONG-TERM LIABILITIES | 725 | 210 | ||||||
Total liabilities | 2,338 | 4,846 | 2,956 | |||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Ordinary shares, no par value - authorized 500,000,000 shares as of September 30, 2020 and 100,000,000 shares as of December 31,2019; issued and outstanding 37,099,352 shares at September 30, 2020 and December 31,2019 | 0 | 0 | 0 | |||||
Paid-in capital | 119,375 | 119,468 | 87,240 | |||||
Currency translation differences reserve | 872 | 872 | 872 | |||||
Accumulated deficit | (114,896) | (105,431) | (78,307) | |||||
Total shareholders' equity | 5,351 | $ 8,157 | 14,909 | $ 20,402 | $ 27,249 | 9,805 | $ (609) | |
Total liabilities and shareholders' equity | $ 7,689 | $ 19,755 | $ 12,761 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 | $ 0 | |
Common Stock, Shares Authorized | 500,000,000 | 100,000,000 | 100,000,000 | 30,000,000 |
Common Stock, Shares, Issued | 37,099,352 | 37,099,352 | 15,575,682 | |
Common Stock, Shares, Outstanding | 37,099,352 | 37,099,352 | 15,575,682 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | |||||||
Research and development | $ 1,252 | $ 5,565 | $ 3,609 | $ 12,276 | $ 13,303 | $ 7,514 | |
General and administrative | 1,125 | 1,705 | 5,126 | 4,958 | 6,245 | 5,521 | |
Restructuring expense | $ 247 | 79 | 749 | 3,350 | |||
Total operating expenses | 2,456 | 7,270 | 9,484 | 17,234 | 22,898 | 13,035 | |
Finance (income) expense, net | (7) | (102) | (19) | 4,286 | (4,226) | (457) | |
LOSS BEFORE INCOME TAX | 27,124 | 13,492 | |||||
INCOME TAXES, NET | 306 | ||||||
Net loss and comprehensive loss | $ (2,449) | $ (7,168) | $ (9,465) | $ (21,520) | $ (27,124) | $ (13,798) | |
Basic and diluted loss per share | $ (0.07) | $ (0.19) | $ (0.26) | $ (0.64) | $ 0.79 | $ 1.09 | |
Weighted average number of shares outstanding - basic and diluted | 37,099,352 | 37,099,352 | 37,099,352 | 33,551,494 | 34,446,000 | 12,634,000 | |
OTHER COMPREHENSIVE INCOME: | |||||||
Foreign currency translation adjustments | $ (415) | ||||||
TOTAL COMPREHENSIVE LOSS | $ 27,124 | $ 13,383 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Ordinary shares | Paid-in capital | Currency translation differences reserve | Accumulated deficit | Total |
Beginning balance at Dec. 31, 2017 | $ 63,443,000 | $ 457,000 | $ (64,509,000) | $ (609,000) | |
Beginning balance (in shares) at Dec. 31, 2017 | 9,613,145 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | 1,926,000 | 1,926,000 | |||
Net loss | (13,798,000) | (13,798,000) | |||
Ending balance at Dec. 31, 2018 | $ 0 | 87,240,000 | 872,000 | (78,307,000) | 9,805,000 |
Ending balance (in shares) at Dec. 31, 2018 | 15,575,682 | ||||
CHANGES DURING THE YEAR: | |||||
Issuance of shares and warrants, net | 21,865,000 | 21,865,000 | |||
Issuance of shares and warrants, net (In shares) | 5,960,787 | ||||
Exercise of share options | 6,000 | 6,000 | |||
Exercise of share options (in shares) | 1,750 | ||||
Other comprehensive income | 415,000 | 415,000 | |||
Issuance of shares, net | $ 0 | 26,500,000 | 0 | 0 | 26,500,000 |
Issuance of shares, net (in shares) | 21,523,670 | ||||
Reclassification of warrants due to reassessment | $ 0 | (3,628,000) | 0 | 0 | (3,628,000) |
Reclassification of warrants due to modification | 0 | 8,198,000 | 0 | 0 | 8,198,000 |
Share-based compensation | 0 | 748,000 | 0 | 0 | 748,000 |
Net loss | (14,374,000) | (14,374,000) | |||
Ending balance at Jun. 30, 2019 | $ 0 | 119,058,000 | 872,000 | (92,681,000) | 27,249,000 |
Ending balance (in shares) at Jun. 30, 2019 | 37,099,352 | ||||
Beginning balance at Dec. 31, 2018 | $ 0 | 87,240,000 | 872,000 | (78,307,000) | 9,805,000 |
Beginning balance (in shares) at Dec. 31, 2018 | 15,575,682 | ||||
CHANGES DURING THE YEAR: | |||||
Issuance of shares, net | 26,500,000 | 26,500,000 | |||
Issuance of shares, net (in shares) | 21,523,670 | ||||
Reclassification of warrants due to reassessment | (3,628,000) | (3,628,000) | |||
Reclassification of warrants due to modification | 8,198,000 | 8,198,000 | |||
Share-based compensation | 1,158,000 | 1,158,000 | |||
Net loss | (27,124,000) | (27,124,000) | |||
Ending balance at Dec. 31, 2019 | $ 0 | 119,468,000 | 872,000 | (105,431,000) | 14,909,000 |
Ending balance (in shares) at Dec. 31, 2019 | 37,099,352 | ||||
Beginning balance at Jun. 30, 2019 | $ 0 | 119,058,000 | 872,000 | (92,681,000) | 27,249,000 |
Beginning balance (in shares) at Jun. 30, 2019 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | 321,000 | 0 | 0 | 321,000 |
Net loss | (7,168,000) | (7,168,000) | |||
Ending balance at Sep. 30, 2019 | $ 0 | 119,379,000 | 872,000 | (99,849,000) | 20,402,000 |
Ending balance (in shares) at Sep. 30, 2019 | 37,099,352 | ||||
Beginning balance at Dec. 31, 2019 | $ 0 | 119,468,000 | 872,000 | (105,431,000) | 14,909,000 |
Beginning balance (in shares) at Dec. 31, 2019 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | 264,000 | 0 | 0 | 264,000 |
Net loss | (7,016,000) | (7,016,000) | |||
Ending balance at Jun. 30, 2020 | $ 0 | 119,732,000 | 872,000 | (112,447,000) | 8,157,000 |
Ending balance (in shares) at Jun. 30, 2020 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | (357,000) | 0 | 0 | (357,000) |
Net loss | (2,449,000) | (2,449,000) | |||
Ending balance at Sep. 30, 2020 | $ 0 | $ 119,375,000 | $ 872,000 | $ (114,896,000) | $ 5,351,000 |
Ending balance (in shares) at Sep. 30, 2020 | 37,099,352 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Feb. 28, 2019 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||||
Common Stock, No Par Value | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | ||||
Net loss | $ (9,465) | $ (21,520) | $ (27,124) | $ (13,798) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||
Financing costs, net | 0 | 4,652 | 4,570 | 709 |
Depreciation | 77 | 70 | 281 | 66 |
Taxes on income | 306 | |||
Gain on sale of property and equipment | (19) | 0 | 45 | (8) |
Share-based payments | (93) | 1,069 | 1,158 | 1,926 |
Write-off of right-of-use related to restructuring | 85 | 0 | ||
Changes in operating asset and liabilities: | ||||
Prepaid and other current | 16 | 4,823 | ||
Other non-current assets | 5 | 70 | ||
Decrease (increase) in receivable | 2,305 | (3,496) | ||
Trade payables | (393) | 913 | 1,076 | 287 |
Accrued expenses and other | (1,235) | (621) | ||
Decrease (increase) in employee benefits | (347) | 528 | ||
Increase (decrease) in other payables | 603 | (587) | ||
Decrease (increase) in long-term prepaid expenses | 975 | (156) | ||
Net cash used in operating activities | (11,022) | (10,544) | (16,458) | (14,223) |
Investing activities: | ||||
Purchase of property and equipment | (34) | (346) | (95) | (213) |
Proceeds from sale of property and equipment | 119 | 0 | ||
Net cash provided by (used in) investing activities | 85 | (346) | (95) | (213) |
Financing activities: | ||||
Proceeds from issuance of ordinary shares and warrants | 0 | 30,500 | 30,500 | 22,900 |
Issuance costs | 0 | (3,879) | (3,879) | (2,298) |
Receipt of loan | 4,050 | |||
Repayment of loan | (4,033) | |||
Net cash provided by financing activities | 0 | 26,621 | 26,621 | 20,619 |
Increase (decrease) in cash, cash equivalents and restricted cash | (10,937) | 15,731 | 10,068 | 6,183 |
Cash, cash equivalents and restricted cash at, beginning of period | 17,705 | 7,637 | 7,637 | 1,454 |
Cash, cash equivalents and restricted cash at, end of period | $ 6,768 | $ 23,371 | $ 17,705 | $ 7,637 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Reconciliation in amounts on consolidated balance sheets: | |||||
Cash and cash equivalents | $ 6,768 | $ 23,241 | $ 7,517 | $ 17,575 | |
Restricted cash | 0 | 130 | 120 | 130 | |
Total cash, cash equivalents and restricted cash | 6,768 | 23,371 | 7,637 | 17,705 | $ 1,454 |
Supplemental disclosure of cash flow information: | |||||
Reclassification of warrants due to reassessment | 0 | 3,628 | |||
Reclassification of warrants due to modification | 0 | 8,198 | |||
Taxes paid in cash | 0 | 605 | |||
Interest paid in cash | $ 0 | $ 4 | $ 11 | ||
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||||
Reclassification of warrants from equity to liability | 3,628 | ||||
Reclassification of warrants from liability to equity | $ 8,198 |
NATURE OF OPERATIONS_
NATURE OF OPERATIONS: | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
The Company and Basis of Presentation | ||
NATURE OF OPERATIONS: | 1. The Company and Basis of Presentation Anchiano Therapeutics Ltd. is an early-stage preclinical biopharmaceutical company committed to discovering and developing new cancer therapies designed to target the products of mutated genes that are drivers of human malignancies. The Company is developing small-molecule pan-mutant RAS inhibitors and inhibitors of PDE10 and the β-catenin pathway. In November 2019, the Company discontinued clinical development of inodiftagene vixteplasmid. After a thorough evaluation of the available data, the Company determined there was a low probability of surpassing the pre-defined futility threshold at the planned interim analysis of its Phase 2 Codex study, which was evaluating inodiftagene vixteplasmid in patients with BCG-unresponsive non-muscle-invasive bladder cancer (“NMIBC”), and announced the discontinuation of the study. In January 2020, the Board of Directors of the Company approved management’s recommendation to close the Company’s office and laboratories located in Israel. Following the closure of the Israeli facilities at the end of May 2020, the Company’s sole remaining office is located in Cambridge, Massachusetts (for details, see Note 4 below). The Company currently maintains the lease on this facility in good standing and is also assessing the ability of the staff to continue working remotely under the restrictions of COVID-19. In March 2020 the World Health Organization declared the global novel coronavirus (COVID-19) outbreak a pandemic. As of October 14, 2020, the Company’s operations have not been significantly impacted by the COVID-19 outbreak. However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its financial condition and operations, including ongoing and planned pre-clinical development activities. On July 2, 2020, the Company’s Chief Executive Officer Dr. Frank Haluska sent a letter to the Company’s Chairman outlining Dr. Haluska’s belief that events had occurred that were sufficient to trigger his ability to resign for “Good Reason” under his employment agreement. The Board informed Dr. Haluska that it disagreed with the letter’s assertions regarding “Good Reason” and treated the letter as a constructive resignation effective as of July 2, 2020. On July 12, 2020, Dr. Frank Haluska tendered his written resignation from the Company’s Board of Directors, effective immediately. Dr. Haluska referenced the matters articulated in his letter of July 2, 2020, and the Company’s response and actions following receipt of the letter as the basis for his resignation from the Board. It is the Company’s position, based on its legal counsel, that the CEO resigned without Good Reason, is not entitled to severance, and the Company will contest any and all claims for severance. Prior to the appointment of Mr. Neil Cohen as CEO in October 2020 (see below) the Board handled all matters related to CEO duties. On October 20, 2020, the Company appointed Mr. Neil Cohen as Chief Executive Officer of the Company, effective immediately. Mr. Cohen will continue to serve as a member of the Company’s board of directors. The Company also appointed Andrew Fine to serve as the Chief Financial Officer of the Company, effective immediately. Mr. Fine previously served as the Company’s Interim Chief Financial Officer pursuant to a subcontracting agreement. In light of business circumstances, and in order to conserve cash and preserve optionality while alternatives are being identified and assessed, the Company made a decision during July 2020 to undertake reductions in headcount and other cost saving measures. These include plans to temporarily reduce its internal and external research and development work on the Company's pan-RAS-inhibitor program until there is greater clarity regarding Anchiano's ability to fund the program. The Company continues to undertake actions for the promotion of the program and its assets and towards strengthening the protection of all related intellectual property. As a result of the above the Company took charges associated with severance and, discontinuation of external clinical development activities,. These charges amounted to $1.03 million for discontinuation of external clinical development activities and $0.5 million for severance (see Notes 6 and 7 below). The Company is incorporated and registered in Israel. The Company’s American Depositary Shares ("ADSs"), each representing five ordinary shares of the Company with no par value (the "ordinary shares"), began trading on the Nasdaq Capital Market (“Nasdaq”) in February 2019 under the symbol "ANCN". The Company’s ordinary shares traded on the Tel Aviv Stock Exchange (“TASE”) between August 2006 and June 2019, at which time the Company voluntarily delisted from the TASE. The Company wholly owns a subsidiary, Anchiano Therapeutics Israel Ltd., which itself wholly owns a Delaware-incorporated subsidiary, Anchiano Therapeutics, Inc. Liquidity The condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company has incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at September 30, 2020 of $114.9 million. The Company has financed operations to date primarily through public and private placements of equity securities. The Company anticipates that it will continue to incur net losses for the foreseeable future. The Company believes that its existing cash and cash equivalents will only be sufficient to fund its projected cash needs into the first quarter of 2021. Accordingly, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. To meet future capital needs, the Company would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or may not be available to the Company on any terms. The failure of the Company to obtain sufficient funds on commercially-acceptable terms when needed, would have a material adverse effect on the Company’s business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of the Company’s expenses could vary materially and adversely as a result of a number of factors. The Company has based its estimates on assumptions that may prove to be wrong, and the Company’s expenses could prove to be significantly higher than it currently anticipates. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this quarterly report are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of September 30, 2020, and its results of operations for the three and nine months ended September 30, 2020 and 2019, changes in shareholders’ equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other future annual or interim period. The December 31, 2019 balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Form 10‑K for the year ended December 31, 2019 as filed with the SEC. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2019 included in the Company’s Form 10‑K. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies. | NOTE 1 - NATURE OF OPERATIONS Anchiano Therapeutics Ltd. (the "Company") is a biopharmaceutical company dedicated to the discovery, development, and commercialization of novel,targeted therapies to treat cancer in areas of significant clinical need. Anchiano is developing small-molecule pan-RAS inhibitors and inhibitors of PDE10 and the β-catenin pathway, having discontinued active clinical development of inodiftagene vixteplasmid in November 2019. After a thorough evaluation of the data, the Company determined there was a low probability of surpassing the pre-defined futility threshold at the planned interim analysis of its Phase 2 Codex study, evaluating the gene therapy inodiftagene vixteplasmid in patients with BCG-unresponsive non-muscle-invasive bladder cancer (NMIBC), and announced the discontinuation of the study. The Group took steps to notify study investigators that enrollment and further treatment of patients on trial should stop immediately and is working to close the study (see also Note 5b below). In January 2020, the Board of Directors of the Company approved management’s recommendation to close the Company’s office and laboratories located in Israel. Following the closure of the Israeli facilities, the Company’s sole remaining office will be located in Cambridge, Massachusetts (for details, see Note 10 below). During the last two years, there has been a significant increase in the Company's activities in the USA, resulting from the Company's management's strategic decision to shift its development, financing and ongoing operations from Israel to the USA. The Company is incorporated and registered in Israel. In August 2018, the Company changed its name to Anchiano Therapeutics Ltd. from BioCancell Ltd. The Company’s American Depositary Shares ("ADSs"), each representing five ordinary shares of the Company with no par value (the "ordinary shares"), began trading on the Nasdaq Capital Market (“Nasdaq”) in February 2019 under the symbol "ANCN". Its ordinary shares were traded on the Tel Aviv Stock Exchange (“TASE”) between August 2006 and June 2019, at which time the Company voluntarily delisted from the TASE. The Company wholly owns a subsidiary, Anchiano Therapeutics Israel Ltd. (formerly BioCanCell Therapeutics Israel Ltd.), which itself wholly owns a Delaware-incorporated subsidiary, Anchiano Therapeutics, Inc. (formerly BioCanCell USA, Inc.) for the purposes of operating in the United States. This subsidiary is subject to the tax laws of the State of Delaware. The Company is subject to a number of risks including with regard to the successful development of therapeutics, the ability to obtain adequate financing, the ability to obtain FDA approval and reimbursement for any products the Company may develop, protection of intellectual property, fluctuations in operating results, dependence on key personnel and collaborative partners, rapid technological changes inherent in the target markets of any products the Company may develop, product liability , the introduction of substitute products and competition from larger companies. Liquidity The consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at December 31, 2019 of $105 million. The Company has financed operations to date primarily through public and private placements of equity securities. The Company anticipates that it will continue to incur net losses for the foreseeable future. The Company believes that its existing cash and cash equivalents will only be sufficient to fund its projected cash needs until the end of 2020. Accordingly, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. To meet future capital needs, the Company would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or even available to the Company. The failure of the Company to obtain sufficient funds on commercially-acceptable terms when needed, would have a material adverse effect on the Company’s business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of the Company’s expenses could vary materially and adversely as a result of a number of factors. The Company has based its estimates on assumptions that may prove to be wrong, and the Company’s expenses could prove to be significantly higher than it currently anticipates. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES: | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
SIGNIFICANT ACCOUNTING POLICIES: | 2. Summary of Significant Accounting Policies a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. b. Reclassifications Certain prior year amounts shown in the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to the 2020 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total shareholders’ equity, net loss, or loss per share. | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company previously prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as permitted in the United States (“U.S.”) based on the Company’s status as a foreign private issuer as defined by the U.S. Securities and Exchange Commission (the “SEC”). During 2019, the Company determined that it is no longer qualified as a foreign private issuer under the SEC rules. As a result, as of January 1, 2020, the Company is required to comply with all of the disclosure and reporting requirements applicable to U.S. domestic issuers. b. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. c. Functional currency Items included in the financial statements of the Company's entities are measured using the currency of the primary economic environment in which the Company operates. The Company's functional currency from inception through December 31, 2018 was the New Israeli Shekel (“NIS”), as this was the functional currency of its significant operations. Effective January 1, 2019, the Company, as well as its Israeli subsidiary, reassessed its functional currency and determined to change its functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the NIS. The change in functional currency was accounted for prospectively from January 1, 2019, and the financial statements prior to and including the period ended December 31, 2018 were not restated for the change in functional currency. In late 2018 and the beginning of 2019, the Company went through significant business developments and changes in its economic circumstances, that clearly indicate that the functional currency has changed, beginning January 2019, include the following: · There has been a significant increase in the Company’s activities in the USA, resulting from the Company’s management’s strategic decision to shift its development, financing and ongoing operations from Israel to the USA, as evidenced, inter alia, by the transfer of its operations and development activities, including the Company’s management, to the USA; · The initiation of a pivotal clinical trial in the USA, which was substantially larger than any previous clinical trial performed by the Group, all of which result in a significant increase in expenses and financing dominated in USD relative to other currencies; · The Company’s recent initial public offering on the Nasdaq Capital Market in USD, with additional funding going forward also expected to be denominated in USD. The Nasdaq listing has involved a significant increase in related USD expenses; and · The U.S. subsidiary entering into a license agreement with ADT Pharmaceuticals, LLC (“ADT”), which will be managed solely in dollars (see Note 5c for further details). Moreover, the discontinuation of the Codex study in November 2019 led to the closure of the Group’s Israeli operations (see Note 10 for further details) and the focus of the Company’s resources on programs related to the ADT agreement. In effecting the change in functional currency to the U.S. dollar, as of January 1, 2019, monetary assets and liabilities denominated in foreign currencies have been translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities were based on prior period translated amounts, and non-monetary assets acquired and non-monetary liabilities incurred after January 1, 2019 were translated at the approximate exchange rate prevailing at the date of the transaction. Expenses were translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses were included in the consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The exchange rate on the date of the change became the historical rate for subsequent re-measurement of non-monetary assets and liabilities into USD, the Company’s new functional currency. For periods prior to January 1, 2019, the effects of exchange-rate fluctuations on translating foreign currency monetary assets and liabilities into NIS were included in the statement of operations and comprehensive loss as foreign exchange gain/loss. Expense were translated into USD reporting currency at the balance sheet date at average exchange rates during the period, and assets and liabilities were translated at period-end exchange rates, except for equity transactions, which were translated at historical exchange rates. Translation gains and losses from the application of USD as the Company’s reporting currency, while NIS was the functional currency, are included as part of the cumulative foreign currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. d. Principles of consolidation The consolidated financial statements include the financial statements of Anchiano Therapeutics Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. e. Cash and cash equivalents Cash equivalents are short-term, highly-liquid deposits that are not restricted as to withdrawal and are readily convertible to cash with original maturities of three months or less, at the date acquired. f. Restricted cash Restricted cash deposited in an interest-bearing saving accounts which is used as a security for the Company’s office rent and car leasing. Cash expected to be restricted for more than one year from the balance sheet date is classified as long-term restricted cash in the consolidated balance sheets. g. Property and equipment: 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. h. Impairment of long-lived assets The Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair-value measure. i. Derivatives Measurement of derivative financial instruments Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for by recognizing them in profit or loss, as financing income or expense. Reassessment of derivatives The classification of a contract shall be reassessed at each balance sheet date. If the classification required changes as a result of events during the period, the contract shall be reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. If a contract is reclassified from permanent or temporary equity to an asset or a liability, the change in fair value of the contract during the period the contract was classified as equity shall be accounted for as an adjustment to shareholders' equity. The contract subsequently shall be marked to fair value through earnings. Issuance of parcel of securities The consideration received from the issuance of a parcel of equity securities is allocated according to the relative fair value of the instruments. j. Severance pay The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment (and pro rata for a portion thereof). Under Section 14 of the Severance Pay Law, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with investment firms or insurance companies. Payments in accordance with Section 14 release the Group from any future severance payments in respect of those employees. As a result, the Group does not recognize any liability for severance pay from the time Section 14 has been adopted with respect to an employee, and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet. For the period during which the Group’s employees in Israel were not subject to Section 14 are accounted for under the Shut Down method of accounting. Accordingly, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees, multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits is recorded as an asset on the Company's balance sheet under Funds in respect of employee rights upon retirement and other short-term assets. k. Contingencies Certain conditions may exist, as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450‑20‑25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. l. Share-based compensation Share-based compensation expense related to share awards is recognized based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, including the expected term of the option, the expected volatility of the price of the Company’s ordinary shares and the expected dividend yield of ordinary shares. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forfeitures are accounted for by estimating the number of awards expected to be forfeited instead of as they occur. m. Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including clinical trial and materials, management development of production processes, salaries, wages and incidentals, laboratory rent and maintenance. All costs associated with research and developments are expensed as incurred. Intangible assets that are purchased from others for use in R&D activities in a transaction other than a business combination are capitalized only if they have alternative future use. Otherwise, such assets are expensed. For the two years ended December 31, 2019, the Company did not capitalize any intangible asset purchased at an asset acquisition. n. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses as incurred, since the recoverability of such expenditures is uncertain. o. Income taxes: 1) Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently-enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. 2) Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. p. Loss per share Basic loss per share is computed on the basis of the net loss for the period divided by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted-average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following ordinary shares underlying stock options and warrants were excluded from the calculation of diluted net loss per ordinary share, because their effect would have been anti-dilutive for the years presented: Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 q. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: 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 or active market data of similar or identical assets or liabilities. 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. See Note 6c. r. Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, and pledged deposits. The Company deposits cash and cash equivalents with highly-rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. s. Newly issued and recently adopted accounting pronouncements: Accounting pronouncements recently adopted 1) In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). ASU 2016‑02 requires lessees to recognize most leases on their balance sheet as a right-of-use (ROU) asset and a lease liability. Leases are classified as either operating or finance based on criteria similar to existing lease accounting, with the classification affecting the pattern and classification of expense recognition in the statement of operations. This standard became effective on January 1, 2019. A modified retrospective transition approach is allowed, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. Operating-lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate, based on the information available at the commencement date, to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option, if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. The most significant effects of adoption relate to : (i) the recognition of approximately $1,199 thousand for ROU assets and $1,116 thousand for lease liabilities on the Company’s balance sheet for its operating leases of real estate, vehicles and equipment (the difference between the additional lease assets and lease liabilities did not impact the retained earnings), and (ii) the requirement to provide significant new disclosures regarding the Company’s leasing activities and to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. However, the adoption of this standard does not have a material impact on the Company’s consolidated statements of income and consolidated statements of cash flows. Effects of the initial application of the new standard on the Company’s consolidated balance sheet as of January 1, 2019: Balance at Balance at January 1, 2019 January 1, 2019 as reported based on ASC based on 842 ASC 840 Effect of change ROU assets 1,809 — 1,809 Prepaid expense — 83 Lease liabilities 1,726 — 1,726 Recently Issued Accounting Pronouncements 2) In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to non-employees for goods and services and aligns most of the guidance on such payments to the non-employees with the requirements for share-based payments granted to employees. The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein, using a modified retrospective approach. Early adoption is permitted. The Company adopted the guidance as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements. 3) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820. After the adoption of ASU 2018-13, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements; The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein. The amendments on changes in unrealized gains and losses should be applied prospectively for only the most recent period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented on their effective date. Early adoption is permitted, and an entity also is permitted to early adopt any removed or modified disclosures on issuance of ASU 2018-13, and delay adoption of the additional disclosures until their effective date. After adopting ASU 2018-13, the Company’s financial statements will include fewer disclosures about fair value measurements; however, the Company does not expect the adoption of ASU 2018-13 to otherwise have a material effect on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features. The amendments of this ASU update the classification analysis of certain equity-linked financial instruments, or embedded features, with down round features, as well as clarify existing disclosure requirements for equity-classified instruments. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has early adopted ASU 2017-11 retrospectively. |
CASH AND CASH EQUIVALENTS_
CASH AND CASH EQUIVALENTS: | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND CASH EQUIVALENTS: | |
CASH AND CASH EQUIVALENTS: | NOTE 3 – CASH AND CASH EQUIVALENTS: Year ended December 31 2019 2018 In US dollars: Cash 9,349 1,315 Cash equivalents 7,451 6,000 In New Israeli Shekels: Cash 775 202 17,575 7,517 Cash equivalents are comprised of short-term bank deposits with original maturities of three months or less, at the date acquired. |
LEASES_
LEASES: | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases | ||
Leases | 4. Leases In January 2018, the Company signed an agreement to rent a laboratory and offices in Jerusalem through May 2023. The Company had an option to extend the agreement by another five years. The annual rent (including management fees) is approximately $0.4 million and is linked to the Israeli Consumer Price Index. Pursuant to the agreement, bank guarantees of $0.1 million were provided to the property owner. In January 2020, pursuant to the Company’s decision to close its Israeli operations, the agreement was modified such that the Company vacated the facilities on May 30, 2020 but will continue to make scheduled lease payments through October 31, 2020. The Company recorded restructuring expense of $247,000 related to the modification of the Israeli lease agreement and settled all obligations associated with the lease. In May 2018, the Company signed an agreement to rent space for its headquarter offices in Cambridge, Massachusetts. This agreement was amended in October 2019 to reflect relocating to a new 2,400 square foot suite within the same facility effective February 1, 2020. The annual rent is approximately $0.2 million. The amended lease term ends January 31, 2022 and there are no options to extend the lease. The Company currently maintains the lease in good standing and is assessing the ability of the staff to continue working remotely under the restrictions of COVID-19. | NOTE 4 - LEASES : The Group leases facilities, labs offices and cars for use in its operations, which are classified as operating leases. In addition to rent, the leases may require the Group to pay directly for fees, insurance, maintenance and other operating expenses. In January 2018, the Group signed an agreement to rent a laboratory and offices in Jerusalem’s Har Hotzvim industrial zone through May 2023. The Group has an option to extend the agreement by another five years. The annual rent (including management fees) is approximately $382 thousand and is linked to the Israeli CPI. Pursuant to the agreement, bank guarantees of $113 thousand were provided to the property owner. In January 2020, the agreement was modified such that it will terminate on October 31, 2020 and the Company will pay rent until that date. In November 2013, the Group signed a rental agreement with the Development & Management of Jerusalem Industrial Zones Administration Ltd. in the Edmund J. Safra High-Tech Village in Givat Ram, Jerusalem, which was extended until December 2019. The total annual rent was approximately $65 thousand. Under the agreement, a bank guarantee of $18 thousand was provided to the property owner. In May 2018, Anchiano Therapeutics, Inc. signed a new agreement to rent space for offices in Cambridge, Massachusetts, until December 2021. The annual rent is approximately $140 thousand. The lease term and the discount rate related to Company’s operating lease right-of-use assets and related lease liabilities are as follows: December 31, 2019 Weighted-average remaining lease term (in years) 3.2 Weighted-average discount rate 3.5 The components of lease expense and cash flows were as follows (in thousands): December 31, 2019 Fixed payment and variable payments that depend on an index or rate Supplemental cash flow information related to operating leases was as follows: Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 571 Right-of-use assets obtained in exchange for new operating lease liabilities 73 As of December 31, 2019, the maturity of lease liabilities under our non-cancelable operating leases were as follows: 2020 409 2021 371 2022 363 2023 57 Total future minimum lease payments 1,200 Less: interest (84) Present value of operating lease liabilities 1,116 Future minimum lease payments of the operating lease liabilities under ASC 840 as of January 1, 2019 were as follows: 2019 537 2020 440 2021 410 2022 288 2023 51 Total future minimum lease payments 1,726 |
COMMITMENTS_
COMMITMENTS: | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS: | |
COMMITMENTS: | NOTE 5 - COMMITMENTS : A. Royalty Commitments: 1. Liability for royalty payments to the Israel Innovation Authority The Company is obligated to pay royalties to the Israel Innovation Authority (the "IIA") on proceeds from the sale of products developed from research and development activities that were partially funded by grants from the IIA, relating to inodiftagene, development of which the Company discontinued in 2019. See Note 1 above for details. Under the specific terms of the funding arrangements with the IIA, royalties of 3.5% to 25% are payable on the sale of products developed with funding received from the IIA, which payments shall not exceed, in the aggregate, 300% of the amount of the grant received (dollar linked), plus interest at annual rate based on LIBOR. As of December 31, 2019, the Company had recognized and received grants (cumulatively) from the IIA in the amount of $4 million. At the time the Company received the grants, successful development of the program was not probable and, accordingly, no related liability has been recognized in the financial statements. The Company did not receive any grants from the IIA for the years ended December 31, 2019, and 2018. 2. The research and development activities of the Group relating to inodiftagene, development of which the Company discontinued in 2019, were based on an exclusive license granted to the Group to use patent-protected technology and/or applications for the registration of patents developed by the Group. The rights to these patents originally belonged to Yissum Technology Transfer, the research development Company of The Hebrew University of Jerusalem (hereinafter, “Yissum”). Under the 2005 license agreement between Yissum and the Group, as amended (the “License Agreement"), Yissum granted an exclusive license to the Group for the global development, use, manufacture and commercialization of products that are based on the patents. In return, the Group undertook to pay royalties to Yissum. The Group does not recognize a liability for royalties until the event underlying the liability actually probable and reasonably and therefore the financial statements do not include a liability for these royalties. B. Restructuring Restructuring provisions are recognized for the direct expenditures arising from restructuring initiatives, where the plans are sufficiently detailed and where appropriate communication has been made to those affected. The Company has recorded restructuring expenses related principally to contract termination costs due to the discontinuation of the clinical trials to clinical research organizations (CRO’s) and manufacturers and contractual involuntary termination benefits to employees which have been accounted for as ongoing benefit arrangements and associated termination costs related to the reduction of its workforce. One-time termination benefits are expensed at the date the employees are notified, unless the employees must provide future services beyond a minimum retention period, in which case the benefits are expensed ratably over the future service periods. A provision for contract termination costs, in which a contract is terminated or the entity will continue to incur costs pursuant to contract for its remaining term without economic benefit, is recognized only when the contract is terminated or when the entity permanently ceases using the rights granted under the contract. In November 2019 the Company decided to discontinue its Phase 2 Codex study in patients with BCG-unresponsive NMIBC. In connection with this decision, the Company is required to make certain payments under contracts with clinical research organizations (CROs) and with manufactures of the drug in order to terminate the contracts and close the trials. This restructuring plan included a reduction in the workforce of seven employees. In January 2020 the Board of Directors approved management’s recommendation to close the Company’s office and laboratories located in Israel. See also Note 10 "Subsequent Events" below. The following table represents a roll forward of the restructuring and other activities noted above: CRO, manufacturing and other Severance- related related Total Expenses 2,979 371 3,350 Paid or utilized (407) (35) (442) December 31, 2019 2,572 336 2,908 C. Acquisition In September 2019, the Company announced that its fully-owned subsidiary, Anchiano Therapeutics, Inc. entered into an option to license agreement with ADT Pharmaceuticals, LLC (“ADT”). Pursuant to the terms and conditions set forth in the agreement, the parties agreed to conduct research and development activities of novel small-molecule inhibitors (RAS and PDE10/β-catenin). As part of the arrangement, the Group is primarily responsible for the research, development, manufacturing and regulatory activities and ADT assists with the research activities as necessary in exchange for a quarterly fee from Anchiano. In connection with the agreement, ADT also granted Anchiano exclusive rights to research, develop, manufacture and commercialize the aforementioned compounds relating to patents owned by ADT and any products containing such compounds worldwide. In consideration for the rights granted under the agreement, Anchiano committed to pay ADT (i) a $3 million upfront fee; (ii) a fee upon transfer of the know-how and intellectual property rights to the Company; and then (iii) additional payments, including milestone and royalty payments. Anchiano may terminate the agreement at any time in its entirety or on a compound-by-compound basis after providing 90 days written notice to ADT. The Company accounted for the upfront fee as a research and development expense. |
SHARE CAPITAL_
SHARE CAPITAL: | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shareholders' Equity | ||
SHARE CAPITAL: | 8. Shareholders’ Equity a. 2018 Private Placement In June 2018, the Company completed a $22.9 million fundraising round from investors in the United States and Israel. In consideration for the investment, the Company issued 5,960,787 ordinary shares at a price per share of approximately $3.842, as well as 2,713,159 warrants to acquire additional shares equal to 80% of the shares issued, at an exercise price per share of NIS 16.20 (approximately $4.32). The warrants are exercisable for five years from December 31, 2018, the closing date of the transaction, and may be exercised on a cashless basis. In addition, the investors were granted price protection rights (to shares and warrants) in the event of a future share issuance by the Company wherein the price does not increase by at least approximately 42.86% over the price per share in the fundraising (or is less than the adjusted price per share, if the price has already been adjusted). For details of an allocation that took place in 2019 pursuant to these rights, see Note 7b below. The warrants and shares were recorded within equity on the issuance date. Effective January 1, 2019, the Company changed its functional currency from NIS to USD. Due to this change, the exercise price of the warrants was no longer denominated in the Company’s functional currency and therefore not considered indexed to the Company’s own shares according to ASC 815‑40. Accordingly, the Company recorded the fair value of the warrants as a liability at January 1, 2019. Subsequently, upon the Company’s Nasdaq initial public offering on February 14, 2019, the warrants’ term was modified such that the exercise price currency was changed to USD. As a result, the warrants were once again considered indexed to the Company’s own shares according to ASC 815‑40. Accordingly, the fair value of the warrants at February 14, 2019 was reclassified from a liability to equity on that date. The following table summarizes the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs: 2019 Fair value on January 1, 2019 $ 3,628 Adjustments-finance expenses 4,570 Fair value on February 14, 2019 $ 8,198 The Company has determined the fair value of the warrants (a Level 3 valuation) as of January 1, 2019 and February 14, 2019. The fair value of these warrants was estimated by implementing the Probability-Weighted Expected Return Method or the Black-Scholes Method. The following parameters were used: Derivative Financial Instrument February 14, 2019 January 1, 2019 Share price $ 1.84 $ 2.50 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % b. Public Offering On February 14, 2019, the Company raised gross proceeds of $30.5 million in its Nasdaq initial public offering (“IPO”), allocating 2,652,174 ADSs, each representing five ordinary shares of the Company. The ADSs are listed under the symbol “ANCN.” In accordance with price protection rights granted in 2018 and activated in the offering (see Note 7a above for details and accounting treatment), the Company issued an additional 8,262,800 ordinary shares (equivalent to 1,652,560 ADSs) to rights holders and adjusted their warrants to be exercisable for an additional 6,207,330 ordinary shares (equivalent to 1,241,466 ADSs). c. Share-based compensation The Company has two share-based compensation plans under which share options or other share-based awards have been granted: the 2011 Share Option Plan and the 2017 Share Option Plan (the “2017 Plan”). The 2017 Plan replaced the 2011 Share Option Plan with respect to future grants; and, therefore, no further awards may be made under 2011 Share Option Plan. The Compensation Committee of the Board of Directors and the Board of Directors administer these plans. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on the Company’s historical volatility. The risk-free interest rate assumption is based on observed Treasury yields over the expected term of the options granted with USD-denominated exercise prices (options granted in the past with NIS-denominated exercise prices used the equivalent Israeli government bond yields). The Company’s management uses the mid-point between the vesting date and the contractual term for each vesting tranche or its expectations, as applicable, of each option as its expected term. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding The fair value of each option granted in the nine months ended September 30, 2019 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2019 Value of ordinary share $1.03 - $1.54 Dividend yield 0% Expected volatility 51.5% - 68.6% Risk-free interest rate 2.2% - 2.5% Expected term (years) 5.5 - 6.9 The fair value of each option granted in the nine months ended September 30, 2020 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2020 Value of ordinary share $0.15 - $0.17 Dividend yield 0% Expected volatility 64.9% - 67.4% Risk-free interest rate 0.30% to 0.39% Expected term (years) 5.5 - 6.5 The following table summarizes the number of options outstanding and exercisable as of September 30, 2020: Weighted Average Weighted Remaining Number of Average Contractual Life in Shares Exercise Price Years Options outstanding - January 1, 2020 3,822,374 $ 2.50 8.5 Granted 885,000 Forfeited/expired/cancelled (1,578,031) Options outstanding - September 30, 2020 3,129,343 $ 2.44 7.9 Options exercisable - September 30, 2020 2,389,840 $ 3.01 7.5 The aggregate intrinsic value of both outstanding and exercisable options at September 30, 2020 is $0. The following table illustrates the effect of share-based compensation on the statements of operations (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Research and development $ (290) $ 154 $ (166) $ 438 General and administrative (67) 168 70 632 $ (357) $ 322 $ (96) $ 1,070 The negative amounts for both Research and development and General and administrative reflect the forfeiture of vested stock options and the reversal of accrued compensation on account of future vesting on stock options that were granted to employees who were terminated as part of the Company's restructuring activities as mentioned above. | NOTE 6 - SHARE CAPITAL: a. Rights of the Company’s ordinary shares Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends if declared by the Board of Directors, whenever funds are legally available. Since its inception, the Company has not declared any dividends. b. 2018 Private Placement In June 2018, the Company completed a $22.9 million fundraising round from investors in the United States and Israel, led by Shavit Capital Funds. In consideration for the investment, the Company issued 5,960,787 ordinary shares (constituting approximately 38% of the Company’s issued and outstanding share capital after completion of the transaction) at a price per share of approximately $3.842, as well as warrants to acquire additional shares equal to 80% of the shares issued, at an exercise price per share of NIS 16.20 (approximately $4.32). The warrants are exercisable for five years from the closing date of the transaction, as of December 31, 2018, and may be exercised on a cashless basis. In addition, the investors were granted price protection rights (to shares and warrants) in the event of a future share issuance by the Company wherein the price does not increase by at least approximately 42.86% over the price per share in the fundraising (or is less than the adjusted price per share, if the price has already been adjusted). For details of an allocation that took place in 2019 pursuant to these rights, see Note 6c below. The warrants and shares were recorded within equity on the issuance date (see note 2s on the adoption of ASU2017). As detailed in Note 2c, the Company changed its functional currency from NIS to USD as of January 1, 2019. Due to this change from this date, the exercise price of the warrants were no longer denominated in the Company’s functional currency and therefore not considered indexed to the Company’s own stock according to ASC 815‑40. Additionally, upon the Company’s Nasdaq IPO of February 14, 2019, the warrants’ term modified such that the exercise price currency was changed to USD. As a result, the warrants were reclassified within equity on that date. Consequently, the warrants were measured at fair value from January 1, 2019 until February 14, 2019, with resulting finance expenses of $4.6 million, until they were reclassified within equity. The following table summarizes the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs: 2019 Fair value on January 1, 2019 3,628 Adjustments- finance expenses 4,570 Fair value on February 14, 2019 8,198 The Company has determined the fair value of the warrants (a Level 3 valuation) as of January 1, 2019 and February 14, 2019. The fair value of these warrants was estimated by implementing the Probability-Weighted Expected Return Method or the Black-Scholes Method. The following parameters were used: Derivative Financial Instrument February 14, 2019 January 1, 2019 Stock price (USD) $ 1.84 $ 2.5 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % c. 2019 Public offering On February 14, 2019, the Company raised $30.5 million in its Nasdaq initial public offering (“IPO”), allocating 2,652,174 ADSs, each representing five ordinary shares of the Company. The ADSs are listed under the symbol “ANCN”. In accordance with price protection rights granted in 2018 and activated in the offering (see Note 6b above for details and accounting treatment), the Company allocated an additional 8,262,800 ordinary shares (equivalent to 1,652,560 ADSs) to rights holders and adjusted their warrants to be exercisable for an additional 6,207,330 ordinary shares (equivalent to 1,241,466 ADSs). d. 2018 Reverse Split and Capitalization In June 2018, the Company completed a 10:1 reverse share split, canceled the par value of its ordinary shares and increased its authorized capital to 30 million ordinary shares. In December 2018, the Company increased its authorized capital to 100 million ordinary shares. All amounts of shares, underlying shares, share prices and exercise prices in these financial statements reflect such adjustments. e. Share-based compensation Until 2016, the Company issued options to purchase shares to its employees, directors and other service providers/consultants pursuant to its 2011 Share Option Plan. From 2017, the Company has issued options pursuant to its 2017 Equity-Based Incentive Plan (the “2017 Plan”). As of December 31, 2019 and 2018, 3,501,486 shares and 586,580 shares respectively remain available for grant under the 2017 Plan. In accordance with the terms of the 2017 Plan, on January 1 of each calendar year during the term of the 2017 Plan, the number of shares available for issuance under the 2017 Plan shall be increased by 4% of the total number of company shares outstanding on December 31 of the immediately preceding calendar year, or such lesser number as shall be determined by the administrator of the 2017 Plan, subject to adjustments required for recapitalization events. The Plan is designed to enable the Company to grant options to purchase ordinary shares under various and different tax regimes including, without limitation, as ISOs or non-qualified stock options for U.S. residents, and pursuant and subject to Sections 102 or 3(i) of the Israeli Tax Ordinance. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on the Company’s historical volatility. The risk-free interest rate assumption is based on observed Treasury yields over the expected term of the options granted with USD-denominated exercise prices (options granted in the past with NIS-denominated exercise prices used the equivalent Israeli government bond yields). The Company’s management uses the mid-point between the vesting date and the contractual term for each vesting tranche or its expectations, as applicable, of each option as its expected term. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding. Anti-Dilution Rights As part of the terms of his employment, the CEO was granted options to purchase ordinary shares totaling 7% of the Company’s fully-diluted share capital, and anti-dilution protections that were activated upon the closing of subsequent fundraising rounds. As part of the 2018 private placement described in Note 6B above, the CEO waived his entitlement to additional future grants. Options granted to employees and directors: In the years ended December 31, 2019 and December 31, 2018, the Company granted options to purchase ordinary shares as follows: Year ended December 31, 2019 Award Exercise Vesting amount price range period Expiration Employees $ 0.60 - $ 1.55 4 years Directors 495,000 $ 0.47 - $ 1.03 3 years Year ended December 31, 2018 Award amount Exercise price range Vesting period Expiration Employees 1,379,203 $ 2.94 - $ 4.00 2-4 years Directors 353 NIS 14.73 4 years The fair value of options granted during 2019 and 2018 was $0.8 million and $2.6 million, respectively. The fair value of options granted to employees and directors is based on the share price on grant date and was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: Year ended December 31 2019 2018 Value of ordinary share $ - $ $ - $ 4.00 Dividend yield — — Expected volatility 51.5%-68.8 % 54.0%-71.8 % Risk-free interest rate 1.7%-2.5 % 1.41%-3.10 % Expected term 4.95-7 years 5.38-7 years The total unrecognized share-based compensation cost at December 31, 2019 is $0.7 million, which is expected to be recognized over a weighted-average period of 2.6 years. Summary of outstanding and exercisable options: The following table summarizes the number of options outstanding for the years ended December 31, 2019 and December 31, 2018, and related information: Employees, directors and consultants Number of options USD (1) Outstanding at December 31, 2017 $ Granted $ Forfeited (90,282) $ 2.69 Expired (54,519) $ 5.22 Exercised (1,750) $ 3.13 Outstanding at December 31, 2018 2,453,767 $ 3.32 Granted 1,593,590 $ 1.03 Forfeited (221,611) $ 1.30 Expired (3,372) $ 13.32 Exercised — — Outstanding at December 31, 2019 3,822,374 $ 2.50 (1) Weighted-average exercise price per ordinary share. NIS-denominated exercise prices were converted to USD using the year-end Bank of Israel representative rate. The following tables summarizes information concerning outstanding and exercisable options as of December 31, 2019, in terms of ordinary shares: December 31, 2019 Options outstanding Options exercisable Number of Weighted Number of Weighted options Average options Average Exercise outstanding Remaining exercisable Remaining prices per at end of Contractual at end of contractual share (USD) year Life year Life $25-72 6,948 1.98 6,948 1.98 $6-7 14,189 3.90 14,189 3.90 $3-5 1,079,056 8.42 786,513 8.39 $2-3 1,330,452 7.60 824,326 7.30 $1-2 1,336,729 9.48 180,188 9.39 $0-1 55,000 9.87 — — 3,822,374 1,812,164 The aggregate intrinsic value of the total of both the outstanding and exercisable options as of December 31, 2019, is $0. The following table illustrates the effect of share-based compensation on the statements of operations: Year ended December 31 2019 2018 Research and development $ 470 $ 275 General and administrative $ 688 $ 1,651 $ 1,158 $ 1,926 |
INCOMETAX_
INCOMETAX: | 12 Months Ended |
Dec. 31, 2019 | |
INCOMETAX: | |
INCOMETAX: | NOTE 7 - INCOMETAX: a. Corporate tax rates 1) Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. 2) The Company’s subsidiary Anchiano Therapeutics, Inc. taxed separately under the U.S. tax laws. The Tax Act reduces the U.S. federal corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. In addition, the Tax Act makes certain changes to the depreciation rules and implements new limits on the deductibility of certain expenses and deduction. b. As of December 31, 2019, the Company had $ 7.7 million in net operating loss carryforwards in Israel that can be carried forward indefinitely and carryforward capital losses of approximately $13.3 million. As of December 31, 2019, the Company’s subsidiary had $70 million in net operating loss carryforwards in Israel that can be carried forward indefinitely and carryforward capital losses of approximately $1.5 million. The U.S. subsidiary had $12 thousand of federal and $12 thousand of state net operating loss carryforwards available to offset future taxable income. c . As of December 31, 2019, the Company's and the Company's subsidiary's tax years until December 31, 2014 are closed to audit inspections by the taxing authority due to statute of limitation rules effective in Israel. The U.S. subsidiary's tax years until December 31, 2016 are closed to audit inspections by the taxing authority due to statute of limitation rules effective in the U.S. d. The components of the net loss before the provision for income taxes were as follows: Year ended December 31 2019 2018 Israel 22,678 13,917 U.S. 4,446 (425) 27,124 13,492 e. The provision for income taxes was as follows: Year ended December 31 2019 2018 Current: Israel — — U.S. — 306 Total current income tax — 306 f. A reconciliation of the Company’s theoretical income tax expense to actual income tax expense is as follows: Year ended December 31 2019 2018 Loss before income tax (27,124) (13,492) Tax rate 23 % 23 % Computed “expected” tax benefit (6,238) (3,103) Decrease (increase) in tax refund resulting from: Change in temporary differences for which deferred taxes were not recognized 2,133 730 Taxes in respect of previous years — (11) Different tax rate in subsidiaries operating outside of Israel (1) 132 Non-deductible items 1,195 165 Tax credit — (315) Losses and benefits for tax purposes for the year, for which deferred taxes were not recorded 2,911 2,708 Actual tax expense — 306 g. The following table presents the significant components of the Company’s deferred tax asset: December 31, 2019 2018 Deferred tax assets: Net operating loss carry forward 17,811 14,031 Capital loss carry forward 3,421 3,155 Research and development 4,297 1,625 Share based compensation 890 717 Other 67 41 Less - valuation allowance (26,486) (19,569) Net deferred tax assets — — A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a valuation allowance to offset deferred tax assets at December 31, 2019 and 2018 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. The net change in the total valuation allowance for the year ended at December 31, 2019 was an increase of $6.9 million. |
SUPPLEMENTARY FINANCIAL STATEME
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: | 12 Months Ended |
Dec. 31, 2019 | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: | NOTE 8 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: a. Balance sheets: Other payables: December 31 2019 2018 Accrued expenses Payroll and related institutions 97 87 2,296 1,706 b. Statements of operations : Finance expenses, net: Year ended December 31 2019 2018 Finance expenses: Foreign exchange rates, net 40 474 Interest expenses, bank fees and other 9 25 Changes in fair value of warrants (see note 6b) 4,570 — Total finance expenses 4,619 499 Finance income: Interest on bank deposits 393 42 Total finance expenses, net 4,226 457 |
RELATED PARTY TRANSACTIONS_
RELATED PARTY TRANSACTIONS: | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS: | |
RELATED PARTY TRANSACTIONS: | NOTE 9 - RELATED PARTY TRANSACTIONS: A. Clal Biotechnology Industries Ltd. (“CBI”), which beneficially owned 35.0% of the Company’s ordinary shares prior to the Company’s Nasdaq IPO, purchased 326,085 ordinary shares, represented by 65,217 ADSs, in the offering and owned 23.6% of the Company’s ordinary shares after the offering. As a result of triggering of price protection rights in connection with the offering, CBI became entitled to be issued ordinary shares and warrants – for further details, see C below. Access Industries, which indirectly owns the majority of CBI’s shares, purchased 6,521,735 ordinary shares, represented by 1,304,347 ADSs, in the initial public offering. Following the offering, Access Industries beneficially owned 17.6% of the Company’s ordinary shares. Access Industries did not execute a lock-up agreement restricting its ability to transfer the ADSs or the underlying ordinary shares. B. In connection with its Nasdaq IPO and pursuant to price protection rights granted to private investors in 2018 and activated as a result of the IPO, the Company allocated an additional 4,726,764 ordinary shares (currently equivalent to 945,350 ADSs) to holders that are related parties of the Company, and adjusted their warrants to be exercisable for an additional 3,550,917 ordinary shares (currently equivalent to 710,182 ADSs). For details of the accounting treatment of this allocation, see Note 6C above. C. In July 2019, an annual general meeting of the Company’s shareholders approved annual fees for each director, as well as allocations of options to each director to purchase 55,000 ordinary shares (currently equivalent to 11,000 ADSs).The total expense expected in connection with these allocations is approximately $0.2 million as of December 31, 2019, of which the Company recorded expenses of approximately $0.1 million in 2019.At their discretion, directors can request for payment for their services to be made directly to their employer, whether cash, equity or both. For this reason, and following receipt of the approvals required by applicable Israeli regulations, the Company pays Ofer Gonen’s employer (CBI, the Company’s largest shareholder) directly for his services as a director, including an allocation of options to purchase 55,000 ordinary shares (currently equivalent to 11,000 ADSs) in November 2019. D. In July 2019, pursuant to approval at an annual general meeting of the Company’s shareholders, the Company amended the annual salary of the Company’s CEO, Dr. Frank Haluska, to $480,000 commencing May 1, 2019, and granted an allocation of options to him to purchase 422,090 ordinary shares (equivalent to 84,418 ADSs). The Company further allocated options exercisable into 494,000 ordinary shares of the Company (equivalent to 98,800 ADSs) to directors and officers of the Company (other than the CEO). The total expense expected in connection with these allocations is $0.3 million as of December 31, 2019, of which the Company recorded expenses of $0.2 million in 2019. |
SUBSEQUENT EVENTS_
SUBSEQUENT EVENTS: | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events | |
Subsequent events | NOTE 10 - SUBSEQUENT EVENTS: A. In January 2020 the Board of Directors approved management’s recommendation to close the Company’s office and laboratories located in Israel. The decision to close the office and laboratories in Israel was made primarily due to the discontinuation of the Company’s Phase 2 Codex study as previously announced and is consistent with management’s stated intention of focusing the Company’s resources on its pan-RAS and PDE10/ß-catenin programs. Following the closure of the Israeli facilities, the Company’s sole remaining office will be located in Cambridge, Massachusetts. The Company expects to substantially complete the restructuring efforts and record an expense of approximately $0.8 million in the first and second quarters of 2020. B. In light of the outbreak of COVID-19 in December 2019 and the spread of the virus during 2020, the Company's management is analyzing the implications on the Company's activities, while working to maintain and continue its activities in the best fashion that circumstances allow. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES: (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Basis of presentation | a. Basis of presentation The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company previously prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as permitted in the United States (“U.S.”) based on the Company’s status as a foreign private issuer as defined by the U.S. Securities and Exchange Commission (the “SEC”). During 2019, the Company determined that it is no longer qualified as a foreign private issuer under the SEC rules. As a result, as of January 1, 2020, the Company is required to comply with all of the disclosure and reporting requirements applicable to U.S. domestic issuers. | |
Use of Estimates | a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. | b. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. |
Reclassification | b. Reclassifications Certain prior year amounts shown in the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to the 2020 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total shareholders’ equity, net loss, or loss per share. | |
Functional currency | c. Functional currency Items included in the financial statements of the Company's entities are measured using the currency of the primary economic environment in which the Company operates. The Company's functional currency from inception through December 31, 2018 was the New Israeli Shekel (“NIS”), as this was the functional currency of its significant operations. Effective January 1, 2019, the Company, as well as its Israeli subsidiary, reassessed its functional currency and determined to change its functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the NIS. The change in functional currency was accounted for prospectively from January 1, 2019, and the financial statements prior to and including the period ended December 31, 2018 were not restated for the change in functional currency. In late 2018 and the beginning of 2019, the Company went through significant business developments and changes in its economic circumstances, that clearly indicate that the functional currency has changed, beginning January 2019, include the following: · There has been a significant increase in the Company’s activities in the USA, resulting from the Company’s management’s strategic decision to shift its development, financing and ongoing operations from Israel to the USA, as evidenced, inter alia, by the transfer of its operations and development activities, including the Company’s management, to the USA; · The initiation of a pivotal clinical trial in the USA, which was substantially larger than any previous clinical trial performed by the Group, all of which result in a significant increase in expenses and financing dominated in USD relative to other currencies; · The Company’s recent initial public offering on the Nasdaq Capital Market in USD, with additional funding going forward also expected to be denominated in USD. The Nasdaq listing has involved a significant increase in related USD expenses; and · The U.S. subsidiary entering into a license agreement with ADT Pharmaceuticals, LLC (“ADT”), which will be managed solely in dollars (see Note 5c for further details). Moreover, the discontinuation of the Codex study in November 2019 led to the closure of the Group’s Israeli operations (see Note 10 for further details) and the focus of the Company’s resources on programs related to the ADT agreement. In effecting the change in functional currency to the U.S. dollar, as of January 1, 2019, monetary assets and liabilities denominated in foreign currencies have been translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities were based on prior period translated amounts, and non-monetary assets acquired and non-monetary liabilities incurred after January 1, 2019 were translated at the approximate exchange rate prevailing at the date of the transaction. Expenses were translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses were included in the consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The exchange rate on the date of the change became the historical rate for subsequent re-measurement of non-monetary assets and liabilities into USD, the Company’s new functional currency. For periods prior to January 1, 2019, the effects of exchange-rate fluctuations on translating foreign currency monetary assets and liabilities into NIS were included in the statement of operations and comprehensive loss as foreign exchange gain/loss. Expense were translated into USD reporting currency at the balance sheet date at average exchange rates during the period, and assets and liabilities were translated at period-end exchange rates, except for equity transactions, which were translated at historical exchange rates. Translation gains and losses from the application of USD as the Company’s reporting currency, while NIS was the functional currency, are included as part of the cumulative foreign currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. | |
Principles of consolidation | d. Principles of consolidation The consolidated financial statements include the financial statements of Anchiano Therapeutics Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. | |
Cash and cash equivalents | e. Cash and cash equivalents Cash equivalents are short-term, highly-liquid deposits that are not restricted as to withdrawal and are readily convertible to cash with original maturities of three months or less, at the date acquired. | |
Restricted cash | f. Restricted cash Restricted cash deposited in an interest-bearing saving accounts which is used as a security for the Company’s office rent and car leasing. Cash expected to be restricted for more than one year from the balance sheet date is classified as long-term restricted cash in the consolidated balance sheets. | |
Property and equipment | g. Property and equipment: 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. | |
Impairment of long-lived assets | h. Impairment of long-lived assets The Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair-value measure. | |
Derivatives | i. Derivatives Measurement of derivative financial instruments Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for by recognizing them in profit or loss, as financing income or expense. Reassessment of derivatives The classification of a contract shall be reassessed at each balance sheet date. If the classification required changes as a result of events during the period, the contract shall be reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. If a contract is reclassified from permanent or temporary equity to an asset or a liability, the change in fair value of the contract during the period the contract was classified as equity shall be accounted for as an adjustment to shareholders' equity. The contract subsequently shall be marked to fair value through earnings. Issuance of parcel of securities The consideration received from the issuance of a parcel of equity securities is allocated according to the relative fair value of the instruments. | |
Severance pay | j. Severance pay The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment (and pro rata for a portion thereof). Under Section 14 of the Severance Pay Law, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with investment firms or insurance companies. Payments in accordance with Section 14 release the Group from any future severance payments in respect of those employees. As a result, the Group does not recognize any liability for severance pay from the time Section 14 has been adopted with respect to an employee, and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet. For the period during which the Group’s employees in Israel were not subject to Section 14 are accounted for under the Shut Down method of accounting. Accordingly, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees, multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits is recorded as an asset on the Company's balance sheet under Funds in respect of employee rights upon retirement and other short-term assets. | |
Contingencies | k. Contingencies Certain conditions may exist, as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450‑20‑25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. | |
Share-based compensation | l. Share-based compensation Share-based compensation expense related to share awards is recognized based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, including the expected term of the option, the expected volatility of the price of the Company’s ordinary shares and the expected dividend yield of ordinary shares. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forfeitures are accounted for by estimating the number of awards expected to be forfeited instead of as they occur. m | |
Research and development costs | m. Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including clinical trial and materials, management development of production processes, salaries, wages and incidentals, laboratory rent and maintenance. All costs associated with research and developments are expensed as incurred. Intangible assets that are purchased from others for use in R&D activities in a transaction other than a business combination are capitalized only if they have alternative future use. Otherwise, such assets are expensed. For the two years ended December 31, 2019, the Company did not capitalize any intangible asset purchased at an asset acquisition. n | |
Patent Costs | n. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses as incurred, since the recoverability of such expenditures is uncertain. | |
Clinical trial accruals | o | |
Income taxes | o. Income taxes: 1) Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently-enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. 2) Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. p | |
Loss per share | p. Loss per share Basic loss per share is computed on the basis of the net loss for the period divided by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted-average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following ordinary shares underlying stock options and warrants were excluded from the calculation of diluted net loss per ordinary share, because their effect would have been anti-dilutive for the years presented: Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 | |
Fair value measurement | q. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: 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 or active market data of similar or identical assets or liabilities. 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. See Note 6c. r | |
Concentration of credit risks | r. Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, and pledged deposits. The Company deposits cash and cash equivalents with highly-rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. s | |
Recent Accounting Pronouncement | s. Newly issued and recently adopted accounting pronouncements: Accounting pronouncements recently adopted 1) In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). ASU 2016‑02 requires lessees to recognize most leases on their balance sheet as a right-of-use (ROU) asset and a lease liability. Leases are classified as either operating or finance based on criteria similar to existing lease accounting, with the classification affecting the pattern and classification of expense recognition in the statement of operations. This standard became effective on January 1, 2019. A modified retrospective transition approach is allowed, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. Operating-lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate, based on the information available at the commencement date, to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option, if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. The most significant effects of adoption relate to : (i) the recognition of approximately $1,199 thousand for ROU assets and $1,116 thousand for lease liabilities on the Company’s balance sheet for its operating leases of real estate, vehicles and equipment (the difference between the additional lease assets and lease liabilities did not impact the retained earnings), and (ii) the requirement to provide significant new disclosures regarding the Company’s leasing activities and to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. However, the adoption of this standard does not have a material impact on the Company’s consolidated statements of income and consolidated statements of cash flows. Effects of the initial application of the new standard on the Company’s consolidated balance sheet as of January 1, 2019: Balance at Balance at January 1, 2019 January 1, 2019 as reported based on ASC based on 842 ASC 840 Effect of change ROU assets 1,809 — 1,809 Prepaid expense — 83 Lease liabilities 1,726 — 1,726 Recently Issued Accounting Pronouncements 2) In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to non-employees for goods and services and aligns most of the guidance on such payments to the non-employees with the requirements for share-based payments granted to employees. The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein, using a modified retrospective approach. Early adoption is permitted. The Company adopted the guidance as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements. 3) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820. After the adoption of ASU 2018-13, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements; The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein. The amendments on changes in unrealized gains and losses should be applied prospectively for only the most recent period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented on their effective date. Early adoption is permitted, and an entity also is permitted to early adopt any removed or modified disclosures on issuance of ASU 2018-13, and delay adoption of the additional disclosures until their effective date. After adopting ASU 2018-13, the Company’s financial statements will include fewer disclosures about fair value measurements; however, the Company does not expect the adoption of ASU 2018-13 to otherwise have a material effect on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features. The amendments of this ASU update the classification analysis of certain equity-linked financial instruments, or embedded features, with down round features, as well as clarify existing disclosure requirements for equity-classified instruments. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has early adopted ASU 2017-11 retrospectively. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES: (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Schedule of share options and warrants were excluded from the calculation of diluted net loss per ordinary share because their effect would have been anti-dilutive for the years presented | September 30 2020 2019 Stock Options 3,129,343 3,985,858 Warrants 10,975,959 10,975,959 | Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 |
Schedule of effects of the initial application of IFRS 16 on the Company's consolidated balance sheet | Balance at Balance at January 1, 2019 January 1, 2019 as reported based on ASC based on 842 ASC 840 Effect of change ROU assets 1,809 — 1,809 Prepaid expense — 83 Lease liabilities 1,726 — 1,726 |
CASH AND CASH EQUIVALENTS_ (Tab
CASH AND CASH EQUIVALENTS: (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND CASH EQUIVALENTS: | |
Schedule of Cash and Cash Equivalents [Table Text Block] | Year ended December 31 2019 2018 In US dollars: Cash 9,349 1,315 Cash equivalents 7,451 6,000 In New Israeli Shekels: Cash 775 202 17,575 7,517 |
LEASES_ (Tables)
LEASES: (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of lease term and the discount rate related to Company's operating lease right-of-use assets and related lease liabilities | December 31, 2019 Weighted-average remaining lease term (in years) 3.2 Weighted-average discount rate 3.5 |
Schedule of components of lease expense and cash flows | December 31, 2019 Fixed payment and variable payments that depend on an index or rate |
Schedule of Supplemental cash flow information related to operating leases | Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 571 Right-of-use assets obtained in exchange for new operating lease liabilities 73 |
Schedule of maturity of lease liabilities under our non-cancelable operating leases | 2020 409 2021 371 2022 363 2023 57 Total future minimum lease payments 1,200 Less: interest (84) Present value of operating lease liabilities 1,116 |
Schedule of future minimum lease payments of the operating lease liabilities under ASC 840 as of January 1, 2019 | 2019 537 2020 440 2021 410 2022 288 2023 51 Total future minimum lease payments 1,726 |
COMMITMENTS_ (Tables)
COMMITMENTS: (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS: | ||
Schedule of roll forward of the restructuring and other activities | CRO, Facility Manufacturing Severance- and and other related related Leases Total Balance, January 1, 2020 $ 2,572 $ 336 $ — $ 2,908 Expenses 502 — 247 749 Paid or consumed (2,835) (336) (247) (3,138) Balance, September 30, 2020 $ 238 $ — $ — $ 238 | CRO, manufacturing and other Severance- related related Total Expenses 2,979 371 3,350 Paid or utilized (407) (35) (442) December 31, 2019 2,572 336 2,908 |
SHARE CAPITAL_ (Tables)
SHARE CAPITAL: (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shareholders' Equity | ||
Summary of the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs | 2019 Fair value on January 1, 2019 $ 3,628 Adjustments-finance expenses 4,570 Fair value on February 14, 2019 $ 8,198 | 2019 Fair value on January 1, 2019 3,628 Adjustments- finance expenses 4,570 Fair value on February 14, 2019 8,198 |
Summary of assumptions used in valuation of the fair value of the warrants | Derivative Financial Instrument February 14, 2019 January 1, 2019 Share price $ 1.84 $ 2.50 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % | Derivative Financial Instrument February 14, 2019 January 1, 2019 Stock price (USD) $ 1.84 $ 2.5 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % |
Summary of Options granted to employees and directors | Year ended December 31, 2019 Award Exercise Vesting amount price range period Expiration Employees $ 0.60 - $ 1.55 4 years Directors 495,000 $ 0.47 - $ 1.03 3 years Year ended December 31, 2018 Award amount Exercise price range Vesting period Expiration Employees 1,379,203 $ 2.94 - $ 4.00 2-4 years Directors 353 NIS 14.73 4 years | |
Summary of assumptions used in valuation of the fair value of the options granted | The fair value of each option granted in the nine months ended September 30, 2019 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2019 Value of ordinary share $1.03 - $1.54 Dividend yield 0% Expected volatility 51.5% - 68.6% Risk-free interest rate 2.2% - 2.5% Expected term (years) 5.5 - 6.9 The fair value of each option granted in the nine months ended September 30, 2020 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2020 Value of ordinary share $0.15 - $0.17 Dividend yield 0% Expected volatility 64.9% - 67.4% Risk-free interest rate 0.30% to 0.39% Expected term (years) 5.5 - 6.5 | Year ended December 31 2019 2018 Value of ordinary share $ - $ $ - $ 4.00 Dividend yield — — Expected volatility 51.5%-68.8 % 54.0%-71.8 % Risk-free interest rate 1.7%-2.5 % 1.41%-3.10 % Expected term 4.95-7 years 5.38-7 years |
Summary of outstanding and exercisable options | Weighted Average Weighted Remaining Number of Average Contractual Life in Shares Exercise Price Years Options outstanding - January 1, 2020 3,822,374 $ 2.50 8.5 Granted 885,000 Forfeited/expired/cancelled (1,578,031) Options outstanding - September 30, 2020 3,129,343 $ 2.44 7.9 Options exercisable - September 30, 2020 2,389,840 $ 3.01 7.5 | Employees, directors and consultants Number of options USD (1) Outstanding at December 31, 2017 $ Granted $ Forfeited (90,282) $ 2.69 Expired (54,519) $ 5.22 Exercised (1,750) $ 3.13 Outstanding at December 31, 2018 2,453,767 $ 3.32 Granted 1,593,590 $ 1.03 Forfeited (221,611) $ 1.30 Expired (3,372) $ 13.32 Exercised — — Outstanding at December 31, 2019 3,822,374 $ 2.50 (1) Weighted-average exercise price per ordinary share. NIS-denominated exercise prices were converted to USD using the year-end Bank of Israel representative rate. |
Summary of information concerning outstanding and exercisable options as of December 31, 2019, in terms of ordinary shares | December 31, 2019 Options outstanding Options exercisable Number of Weighted Number of Weighted options Average options Average Exercise outstanding Remaining exercisable Remaining prices per at end of Contractual at end of contractual share (USD) year Life year Life $25-72 6,948 1.98 6,948 1.98 $6-7 14,189 3.90 14,189 3.90 $3-5 1,079,056 8.42 786,513 8.39 $2-3 1,330,452 7.60 824,326 7.30 $1-2 1,336,729 9.48 180,188 9.39 $0-1 55,000 9.87 — — 3,822,374 1,812,164 | |
Summary of the effect of share-based compensation on the statements of operations | Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Research and development $ (290) $ 154 $ (166) $ 438 General and administrative (67) 168 70 632 $ (357) $ 322 $ (96) $ 1,070 | Year ended December 31 2019 2018 Research and development $ 470 $ 275 General and administrative $ 688 $ 1,651 $ 1,158 $ 1,926 |
INCOMETAX_ (Tables)
INCOMETAX: (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOMETAX: | |
Schedule of components of the net loss before the provision for income taxes | Year ended December 31 2019 2018 Israel 22,678 13,917 U.S. 4,446 (425) 27,124 13,492 |
Schedule of components of the provision for income taxes | Year ended December 31 2019 2018 Current: Israel — — U.S. — 306 Total current income tax — 306 |
Schedule of reconciliation of the Company's theoretical income tax expense to actual income tax expense | Year ended December 31 2019 2018 Loss before income tax (27,124) (13,492) Tax rate 23 % 23 % Computed “expected” tax benefit (6,238) (3,103) Decrease (increase) in tax refund resulting from: Change in temporary differences for which deferred taxes were not recognized 2,133 730 Taxes in respect of previous years — (11) Different tax rate in subsidiaries operating outside of Israel (1) 132 Non-deductible items 1,195 165 Tax credit — (315) Losses and benefits for tax purposes for the year, for which deferred taxes were not recorded 2,911 2,708 Actual tax expense — 306 |
Schedule of significant components of the Company's deferred tax asset | December 31, 2019 2018 Deferred tax assets: Net operating loss carry forward 17,811 14,031 Capital loss carry forward 3,421 3,155 Research and development 4,297 1,625 Share based compensation 890 717 Other 67 41 Less - valuation allowance (26,486) (19,569) Net deferred tax assets — — |
SUPPLEMENTARY FINANCIAL STATE_2
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | a. Balance sheets: Other payables: December 31 2019 2018 Accrued expenses Payroll and related institutions 97 87 2,296 1,706 b. Statements of operations : Finance expenses, net: Year ended December 31 2019 2018 Finance expenses: Foreign exchange rates, net 40 474 Interest expenses, bank fees and other 9 25 Changes in fair value of warrants (see note 6b) 4,570 — Total finance expenses 4,619 499 Finance income: Interest on bank deposits 393 42 Total finance expenses, net 4,226 457 |
NATURE OF OPERATIONS_ (Details)
NATURE OF OPERATIONS: (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 20, 2020 | Feb. 28, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Restructuring Cost and Reserve [Line Items] | ||||||
Severance expense | $ (3,138) | $ (442) | ||||
Number of ordinary shares represented by each ADS (in shares) | 5 | 5 | ||||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Accumulated deficit | $ 114,900 | $ 114,900 | ||||
Discontinuation of external clinical development | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Discontinuation costs | $ 1,030 | 1,030 | ||||
Severance-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance expense | $ 500 | $ (336) | $ (35) |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES: - Severance pay and Antidilutive securities (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities | 3,129,343 | 3,985,858 | 3,822,374 | 2,453,767 |
Derivative Financial Instruments - Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities | 10,975,959 | 10,975,959 | 10,975,959 | 4,768,629 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES: - Accounting pronouncements recently adopted (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use | $ 234 | $ 1,199 | $ 1,809 |
Lease liabilities | 1,116 | ||
Lease liabilities short-term | 173 | 391 | 1,726 |
Lease liabilities long-term | $ 63 | 725 | |
As reported based on previous GAAP | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaid expense | 83 | ||
Effect of change | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use | 1,809 | ||
Prepaid expense | 83 | ||
Lease liabilities short-term | $ 1,726 | ||
ASU 2016-02 | Effect of change | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use | 1,199 | ||
Lease liabilities | $ 1,116 |
CASH AND CASH EQUIVALENTS_ (Det
CASH AND CASH EQUIVALENTS: (Details) ₪ in Thousands, $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019ILS (₪) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018ILS (₪) | Dec. 31, 2018USD ($) |
CASH AND CASH EQUIVALENTS: | ||||||
Cash | ₪ 775 | $ 9,349 | ₪ 202 | $ 1,315 | ||
Cash equivalents | 7,451 | 6,000 | ||||
Total | $ 6,768 | $ 17,575 | $ 23,241 | $ 7,517 |
LEASES_ - Operating lease infor
LEASES: - Operating lease information (Details) $ in Thousands | May 31, 2018USD ($) | May 31, 2018USD ($) | Jan. 31, 2018USD ($) | Nov. 30, 2013USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 01, 2020ft² |
Leases | ||||||||
Option for extend agreement | 5 years | |||||||
Annual rent including management fees | $ 200 | $ 140 | $ 382 | $ 65 | ||||
Bank guarantees provided to property owner | 113 | $ 18 | ||||||
Restructuring expenses | $ 247 | $ 79 | $ 749 | $ 3,350 | ||||
Area of land | ft² | 2,400 | |||||||
Options to extend the lease | false | true | ||||||
Weighted-average remaining lease term (in years) | 3 years 2 months 12 days | |||||||
Weighted-average discount rate | 3.50% |
LEASES_ - Components of lease e
LEASES: - Components of lease expense and cash flows (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Fixed payment and variable payments that depend on an index or rate | $ 571 |
LEASES_ - Supplemental cash flo
LEASES: - Supplemental cash flow information related to operating leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases | |
Operating cash flows from operating leases | $ 571 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 73 |
LEASES_ - Maturity of lease lia
LEASES: - Maturity of lease liabilities under our non-cancelable operating leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
2020 | $ 409 |
2021 | 371 |
2022 | 363 |
2023 | 57 |
Total future minimum lease payments | 1,200 |
Less: interest | (84) |
Present value of operating lease liabilities | $ 1,116 |
LEASES_ - Future minimum lease
LEASES: - Future minimum lease payments of the operating lease liabilities under ASC 840 (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases | |
2019 | $ 537 |
2020 | 440 |
2021 | 410 |
2022 | 288 |
2023 | 51 |
Total future minimum lease payments | $ 1,726 |
COMMITMENTS_ - Liability For Ro
COMMITMENTS: - Liability For Royalties (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Liability for royalty payments to the Israel Innovation Authority | |
Maximum percentage of payments of royalties (as a percent) | 300.00% |
Cumulative amounts of grants received | $ 4,000,000 |
Recognized liability for royalties | $ 0 |
Maximum | |
Liability for royalty payments to the Israel Innovation Authority | |
Royalty payments on sale of product (as a percent) | 25.00% |
Minimum | |
Liability for royalty payments to the Israel Innovation Authority | |
Royalty payments on sale of product (as a percent) | 3.50% |
COMMITMENTS_ - Restructuring an
COMMITMENTS: - Restructuring and Acquisition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Jan. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring expense | $ 247 | $ 79 | $ 749 | $ 3,350 | |
Expenses Paid or utilized | 2,908 | ||||
Paid or consumed | (3,138) | (442) | |||
Closing balance | 2,908 | ||||
Acquisition - Collaboration and license agreement with ADT Pharmaceuticals, LLC ("ADT") | |||||
Upfront fee for license arrangements | $ 3,000 | $ 3,000 | |||
Written notice period for termination of the agreement | 90 days | 90 days | |||
CRO, manufacturing and other related | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring expense | $ 2,979 | ||||
Expenses Paid or utilized | 2,572 | ||||
Paid or consumed | (2,835) | (407) | |||
Closing balance | 2,572 | ||||
Severance-Related | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring expense | 371 | ||||
Expenses Paid or utilized | 336 | ||||
Paid or consumed | $ 500 | $ (336) | (35) | ||
Closing balance | $ 336 |
SHARE CAPITAL_ - 2019 Public of
SHARE CAPITAL: - 2019 Public offering and 2018 Private Placement (Details) $ / shares in Units, $ in Thousands | Feb. 14, 2019USD ($)shares | Feb. 28, 2019shares | Jun. 30, 2018USD ($)$ / sharesshares | Feb. 14, 2019USD ($)shares | Sep. 30, 2020shares | Dec. 31, 2019USD ($)Vote | Dec. 31, 2018USD ($) | Jun. 30, 2018₪ / shares | Jun. 30, 2018$ / shares |
Sale Of Stock [Line Items] | |||||||||
Number of votes per ordinary share | Vote | 1 | ||||||||
Number of ordinary shares represented by each ADS (in shares) | 5 | 5 | |||||||
Threshold percentage for future share issuance price | 42.86% | ||||||||
Finance expenses | $ | $ 4,600 | $ 4,619 | $ 499 | ||||||
2019 Public offering | |||||||||
Sale Of Stock [Line Items] | |||||||||
Initial public offering cost | $ | $ 30,500 | ||||||||
Number of ADSs issued | 2,652,174 | ||||||||
Number of ordinary shares represented by each ADS (in shares) | 5 | ||||||||
Number of ordinary shares issued | 8,262,800 | ||||||||
Number of equivalent ADS for ordinary shares | 1,652,560 | ||||||||
Additional warrants exercisable | 6,207,330 | 6,207,330 | |||||||
Number of equivalent ADS for warrants | 1,241,466 | ||||||||
2018 Private Placement | |||||||||
Sale Of Stock [Line Items] | |||||||||
Number of warrants issued | 2,713,159 | ||||||||
Number of ordinary shares issued | 5,960,787 | ||||||||
Proceeds from issuance of shares | $ | $ 22,900 | ||||||||
Percentage of ordinary shares issued and outstanding after completion of transaction | 38.00% | ||||||||
Share price per share | $ / shares | $ 3.842 | ||||||||
Percentage of additional share issued, to be acquired by warrants. | 80.00% | ||||||||
Warrant exercise price | (per share) | ₪ 16.20 | $ 4.32 | |||||||
Warrants exercisable period | 5 years | ||||||||
Threshold percentage for future share issuance price | 42.86% |
SHARE CAPITAL_ - Warrants activ
SHARE CAPITAL: - Warrants activity (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended |
Feb. 14, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the year | $ 3,628 | $ 3,628 |
Adjustments- finance expenses | 4,570 | 4,570 |
Fair value at the end of the year | 8,198 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the year, Adjusted balance | 3,628 | $ 3,628 |
Adjustments- finance expenses | 4,570 | |
Fair value at the end of the year | $ 8,198 |
SHARE CAPITAL_ - Fair Value ass
SHARE CAPITAL: - Fair Value assumptions of warrants and 2018 Reverse Split (Details) | 1 Months Ended | |||||
Jun. 30, 2018shares | Sep. 30, 2020shares | Dec. 31, 2019shares | Feb. 14, 2019$ / shares | Jan. 01, 2019$ / shares | Dec. 31, 2018shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Reverse stock split conversion ratio | 10 | |||||
Ordinary shares, shares authorized | shares | 30,000,000 | 500,000,000 | 100,000,000 | 100,000,000 | ||
Stock price (USD) | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 1.84 | 2.50 | ||||
Risk free rate | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 2.49 | 1.37 | ||||
Volatility | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 52 | 48 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Stock price (USD) | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 1.84 | 2.5 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Risk free rate | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 2.49 | 1.37 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Volatility | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 52 | 48 |
SHARE CAPITAL_ - Share-based co
SHARE CAPITAL: - Share-based compensation (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018₪ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of options granted | $ | $ 0.8 | $ 2.6 | |
Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award amount | shares | 1,098,590 | 1,379,203 | |
Vesting period | 4 years | ||
Employees | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price | $ 0.60 | $ 2.94 | |
Vesting period | 2 years | ||
Employees | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price | $ 1.55 | $ 4 | |
Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award amount | shares | 495,000 | 353 | |
Exercise price | ₪ / shares | ₪ 14.73 | ||
Vesting period | 3 years | 4 years | |
Directors | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price | $ 0.47 | ||
Directors | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise price | $ 1.03 | ||
2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares remaining available for grant | shares | 3,501,486 | 586,580 | 586,580 |
Increase in shares available for grant (as a percent) | 4.00% |
SHARE CAPITAL_ - Fair value of
SHARE CAPITAL: - Fair value of stock options (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020plan$ / shares | Sep. 30, 2019$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized share-based compensation cost | $ | $ 0.7 | |||
Total unrecognized share-based compensation cost, recognition period | 2 years 7 months 6 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term | 4 years 11 months 12 days | 5 years 4 months 17 days | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility, maximum | 68.80% | 71.80% | ||
Risk-free interest rate, maximum | 2.50% | 3.10% | ||
Expected term | 7 years | 7 years | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility, minimum | 51.50% | 54.00% | ||
Risk-free interest rate, minimum | 1.70% | 1.41% | ||
Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.47 | $ 2.93 | ||
Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 1.54 | $ 4 | ||
2011 share option plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 0.00% | 0.00% | ||
Expected volatility, minimum | 64.90% | 51.50% | ||
Expected volatility, maximum | 67.40% | 68.60% | ||
Risk-free interest rate, minimum | 0.30% | 2.20% | ||
Risk-free interest rate, maximum | 0.39% | 2.50% | ||
2011 share option plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.15 | $ 1.03 | ||
Expected term | 5 years 6 months | 5 years 6 months | ||
2011 share option plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.17 | $ 1.54 | ||
Expected term | 6 years 6 months | 6 years 10 months 24 days | ||
2011 share option plan | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of share based compensation plans | plan | 2 |
SHARE CAPITAL_ - Summary of out
SHARE CAPITAL: - Summary of outstanding and exercisable options (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based compensation | |||
Aggregate intrinsic value | $ 0 | ||
Number of options | |||
Outstanding at the beginning | 3,822,374 | ||
Outstanding at the end | 3,822,374 | ||
Options exercisable | 1,812,164 | ||
Consultant | |||
Number of options | |||
Outstanding at the beginning | 3,822,374 | 2,453,767 | 1,220,762 |
Granted | 1,593,590 | 1,379,556 | |
Forfeited | (221,611) | (90,282) | |
Expired | (3,372) | (54,519) | |
Exercised | (1,750) | ||
Outstanding at the end | 3,822,374 | 2,453,767 | |
Weighted Average Exercise Price | |||
Outstanding at the beginning | $ 2.50 | $ 3.32 | $ 3.21 |
Granted | 1.03 | 3.52 | |
Forfeited | 1.30 | 2.69 | |
Expired | 13.32 | 5.22 | |
Exercised | 3.13 | ||
Outstanding at the end | $ 2.50 | $ 3.32 | |
Stock Options | 2011 share option plan | |||
Share-based compensation | |||
Aggregate intrinsic value | $ 0 | ||
Number of options | |||
Outstanding at the beginning | 3,822,374 | ||
Granted | 885,000 | ||
Forfeited | (1,578,031) | ||
Outstanding at the end | 3,129,343 | 3,822,374 | |
Options exercisable | 2,389,840 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning | $ 2.50 | ||
Outstanding at the end | 2.44 | $ 2.50 | |
Options exercisable | $ 3.01 | ||
Weighted Average Remaining Contractual Life in Years | |||
Weighted Average Remaining Contractual Life in Years | 7 years 10 months 24 days | 8 years 6 months | |
Options exercisable | 7 years 6 months |
SHARE CAPITAL_ - Information co
SHARE CAPITAL: - Information concerning outstanding and exercisable options, in terms of ordinary shares (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Options outstanding | |
Number of options outstanding at end of year | 3,822,374 |
Options exercisable | |
Number of options exercisable at end of year | 1,812,164 |
Aggregate intrinsic value | $ | $ 0 |
Exercise price range of $25-$72 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 25 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 72 |
Options outstanding | |
Number of options outstanding at end of year | 6,948 |
Weighted Average Remaining Contractual Life | 1 year 11 months 23 days |
Options exercisable | |
Number of options exercisable at end of year | 6,948 |
Weighted Average Remaining Contractual Life | 1 year 11 months 23 days |
Exercise price range of $6-$7 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 6 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 7 |
Options outstanding | |
Number of options outstanding at end of year | 14,189 |
Weighted Average Remaining Contractual Life | 3 years 10 months 24 days |
Options exercisable | |
Number of options exercisable at end of year | 14,189 |
Weighted Average Remaining Contractual Life | 3 years 10 months 24 days |
Exercise price range of $3-$5 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 3 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 5 |
Options outstanding | |
Number of options outstanding at end of year | 1,079,056 |
Weighted Average Remaining Contractual Life | 8 years 5 months 1 day |
Options exercisable | |
Number of options exercisable at end of year | 786,513 |
Weighted Average Remaining Contractual Life | 8 years 4 months 21 days |
Exercise price range of $2-$3 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 2 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 3 |
Options outstanding | |
Number of options outstanding at end of year | 1,330,452 |
Weighted Average Remaining Contractual Life | 7 years 7 months 6 days |
Options exercisable | |
Number of options exercisable at end of year | 824,326 |
Weighted Average Remaining Contractual Life | 7 years 3 months 18 days |
Exercise price range of $1-$2 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 1 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 2 |
Options outstanding | |
Number of options outstanding at end of year | 1,336,729 |
Weighted Average Remaining Contractual Life | 9 years 5 months 23 days |
Options exercisable | |
Number of options exercisable at end of year | 180,188 |
Weighted Average Remaining Contractual Life | 9 years 4 months 21 days |
Exercise price range of $0-$1 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise prices per share (USD), Lower range limit | $ / shares | $ 0 |
Exercise prices per share (USD), Upper range limit | $ / shares | $ 1 |
Options outstanding | |
Number of options outstanding at end of year | 55,000 |
Weighted Average Remaining Contractual Life | 9 years 10 months 13 days |
Options exercisable | |
Weighted Average Remaining Contractual Life | 0 years |
SHARE CAPITAL_ - Share-based _2
SHARE CAPITAL: - Share-based compensation expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ 1,158 | $ 1,926 | ||||
Research and development expenses | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | 470 | 275 | ||||
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ 688 | $ 1,651 | ||||
2011 share option plan | Stock Options | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ (357) | $ 322 | $ (96) | $ 1,070 | ||
2011 share option plan | Stock Options | Research and development expenses | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | (290) | 154 | (166) | 438 | ||
2011 share option plan | Stock Options | General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ (67) | $ 168 | $ 70 | $ 632 |
INCOMETAX_ (Details)
INCOMETAX: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | |||
Net loss before the provision for income taxes | $ 27,124 | $ 13,492 | |
Total current income tax | 306 | ||
Israel | |||
Income Tax Disclosure [Line Items] | |||
Corporate tax rate (as a percent) | 23.00% | ||
Net operating loss carryforwards | $ 7,700 | ||
Capital losses carryforwards | 13,300 | ||
Net loss before the provision for income taxes | 22,678 | 13,917 | |
U.S. | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | 70,000 | ||
Capital losses carryforwards | 1,500 | ||
Net loss before the provision for income taxes | 4,446 | (425) | |
Total current income tax | $ 306 | ||
U.S. | Federal | |||
Income Tax Disclosure [Line Items] | |||
Corporate tax rate (as a percent) | 21.00% | 35.00% | |
Net operating loss carryforwards | 12 | ||
U.S. | State | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | $ 12 |
INCOMETAX_ - Reconciliation of
INCOMETAX: - Reconciliation of the Company's theoretical income tax expense to actual income tax expense (Details) New - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Theoretical tax benefit on the above amount Decrease (increase) in tax refund resulting from: | ||
Loss before income tax | $ 27,124 | $ 13,492 |
Tax rate | 23.00% | 23.00% |
Computed "expected" tax benefit | $ (6,238) | $ (3,103) |
Change in temporary differences for which deferred taxes were not recognized | 2,133 | 730 |
Taxes in respect of previous years | (11) | |
Different tax rate in subsidiaries operating outside of Israel | (1) | 132 |
Non-deductible items | 1,195 | 165 |
Tax credit | (315) | |
Losses and benefits for tax purposes for the year, for which deferred taxes were not recorded | $ 2,911 | 2,708 |
Actual tax expense | $ 306 |
INCOMETAX_ - Significant compon
INCOMETAX: - Significant components of the Company's deferred tax asset (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets: | ||
Net operating loss carry forward | $ 17,811 | $ 14,031 |
Capital loss carry forward | 3,421 | 3,155 |
Research and development | 4,297 | 1,625 |
Share based compensation | 890 | 717 |
Other | 67 | 41 |
Less - valuation allowance | (26,486) | $ (19,569) |
Net change in the total valuation allowance | $ 6,900 |
SUPPLEMENTARY FINANCIAL STATE_3
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: - Balance sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other payable: | ||
Accrued expenses | $ 2,199 | $ 1,619 |
Payroll and related | 97 | 87 |
Total | $ 2,296 | $ 1,706 |
SUPPLEMENTARY FINANCIAL STATE_4
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION - Statements of operations (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Feb. 14, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: | |||
Foreign exchange rates, net | $ (40) | $ (474) | |
Interest expenses, bank fees and other | 9 | 25 | |
Changes in fair value of warrants (see note 6b) | $ 4,570 | 4,570 | |
Total finance expenses | $ 4,600 | 4,619 | 499 |
Finance income: | |||
Interest on bank deposits | 393 | 42 | |
Total finance expenses, net | $ 4,226 | $ 457 |
RELATED PARTY TRANSACTIONS_ (De
RELATED PARTY TRANSACTIONS: (Details) - USD ($) | Feb. 14, 2019 | Nov. 30, 2019 | Jul. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
RELATED PARTY TRANSACTIONS | |||||
Expense recorded for allocation of options | $ 1,158,000 | $ 1,926,000 | |||
2019 Public offering | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of ordinary shares issued | 8,262,800 | ||||
Number of equivalent ADS for ordinary shares | 1,652,560 | ||||
Number of warrants issued | 6,207,330 | ||||
Number of equivalent ADS for warrants | 1,241,466 | ||||
Clal Biotechnology Industries Ltd | |||||
RELATED PARTY TRANSACTIONS | |||||
Beneficial ownership (as a percent) | 35.00% | ||||
Beneficial ownership after the offering (as a percent) | 23.60% | ||||
Number of options granted | 55,000 | ||||
Number of equivalent ADS for options | 11,000 | ||||
Clal Biotechnology Industries Ltd | 2019 Public offering | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of ordinary shares issued | 326,085 | ||||
Number of equivalent ADS for ordinary shares | 65,217 | ||||
Access Industries | |||||
RELATED PARTY TRANSACTIONS | |||||
Beneficial ownership after the offering (as a percent) | 17.60% | ||||
Access Industries | 2019 Public offering | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of ordinary shares issued | 6,521,735 | ||||
Number of equivalent ADS for ordinary shares | 1,304,347 | ||||
Holders that are related parties | 2019 Public offering | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of ordinary shares issued | 4,726,764 | ||||
Number of equivalent ADS for ordinary shares | 945,350 | ||||
Number of warrants issued | 3,550,917 | ||||
Number of equivalent ADS for warrants | 710,182 | ||||
Director | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of options granted | 55,000 | ||||
Number of equivalent ADS for options | 11,000 | ||||
Director | Allocation of Stock options | |||||
RELATED PARTY TRANSACTIONS | |||||
Total expense expected for allocation of options | $ 200,000 | ||||
Expense recorded for allocation of options | 100,000 | ||||
CEO, directors and officers | Allocation of Stock options | |||||
RELATED PARTY TRANSACTIONS | |||||
Total expense expected for allocation of options | 300,000 | ||||
Expense recorded for allocation of options | $ 200,000 | ||||
CEO, Dr. Frank Haluska | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of options granted | 422,090 | ||||
Number of equivalent ADS for options | 84,418 | ||||
Annual Salary Payable | $ 480,000 | ||||
Directors and officers (Other than the CEO) | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of options granted | 494,000 | ||||
Number of equivalent ADS for options | 98,800 |
SUBSEQUENT EVENTS_ (Details)
SUBSEQUENT EVENTS: (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Subsequent Event [Line Items] | |||||
Common share authorized | 500,000,000 | 100,000,000 | 100,000,000 | 30,000,000 | |
SUBSEQUENT EVENTS | |||||
Subsequent Event [Line Items] | |||||
Expected restructuring charges | $ 0.8 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||||||||
Cash and cash equivalents | $ 6,768 | $ 17,575 | $ 23,241 | $ 7,517 | ||||
Prepaid expenses and other | 620 | 636 | ||||||
Total current assets | 7,388 | 18,211 | 10,920 | |||||
Funds in respect of employee rights upon retirement | 228 | |||||||
Receivables | 408 | 3,403 | ||||||
Property and equipment, net | 15 | 158 | 385 | |||||
Operating lease right-of-use | 234 | 1,199 | $ 1,809 | |||||
Other non-current assets | 52 | 187 | ||||||
Total assets | 7,689 | 19,755 | 12,761 | |||||
NON-CURRENT ASSETS: | ||||||||
Long-term prepaid expenses | 57 | 1,115 | ||||||
Long-term pledged deposits | 130 | 120 | ||||||
Funds in respect of employee rights upon retirement | 221 | |||||||
TOTAL NON-CURRENT ASSETS | 1,544 | 1,841 | ||||||
Current liabilities: | ||||||||
Trade payables | 482 | 875 | 396 | |||||
Accrued expenses and other | 1,620 | 2,855 | ||||||
Short-term employee benefits | 297 | 644 | ||||||
Liability for employee rights upon retirement | 262 | |||||||
Operating lease liability | 173 | 391 | $ 1,726 | |||||
Other payables | 2,296 | 1,706 | ||||||
Total current liabilities | 2,275 | 4,121 | 2,746 | |||||
Non-current operating lease liability | 63 | 725 | ||||||
Total liabilities | 2,338 | 4,846 | 2,956 | |||||
Commitments and contingencies | ||||||||
TOTAL LONG-TERM LIABILITIES | 725 | 210 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Liability for employee rights upon retirement | 210 | |||||||
Shareholders' equity: | ||||||||
Ordinary shares, no par value - authorized 500,000,000 shares as of September 30, 2020 and 100,000,000 shares as of December 31,2019; issued and outstanding 37,099,352 shares at September 30, 2020 and December 31,2019 | 0 | 0 | 0 | |||||
Paid-in capital | 119,375 | 119,468 | 87,240 | |||||
Currency translation differences reserve | 872 | 872 | 872 | |||||
Accumulated deficit | (114,896) | (105,431) | (78,307) | |||||
Total shareholders' equity | 5,351 | $ 8,157 | 14,909 | $ 20,402 | $ 27,249 | 9,805 | $ (609) | |
Total liabilities and shareholders' equity | $ 7,689 | $ 19,755 | $ 12,761 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 | $ 0 | |
Common Stock, Shares Authorized | 500,000,000 | 100,000,000 | 100,000,000 | 30,000,000 |
Common Stock, Shares, Issued | 37,099,352 | 37,099,352 | 15,575,682 | |
Common Stock, Shares, Outstanding | 37,099,352 | 37,099,352 | 15,575,682 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | |||||||
Research and development | $ 1,252 | $ 5,565 | $ 3,609 | $ 12,276 | $ 13,303 | $ 7,514 | |
General and administrative | 1,125 | 1,705 | 5,126 | 4,958 | 6,245 | 5,521 | |
Restructuring expense | $ 247 | 79 | 749 | 3,350 | |||
Total operating expenses | 2,456 | 7,270 | 9,484 | 17,234 | 22,898 | 13,035 | |
Finance (income) expense, net | (7) | (102) | (19) | 4,286 | (4,226) | (457) | |
LOSS BEFORE INCOME TAX | 27,124 | 13,492 | |||||
INCOME TAXES, NET | 306 | ||||||
Net loss and comprehensive loss | $ (2,449) | $ (7,168) | $ (9,465) | $ (21,520) | $ (27,124) | $ (13,798) | |
Basic and diluted loss per share | $ (0.07) | $ (0.19) | $ (0.26) | $ (0.64) | $ 0.79 | $ 1.09 | |
Weighted average number of shares outstanding - basic and diluted | 37,099,352 | 37,099,352 | 37,099,352 | 33,551,494 | 34,446,000 | 12,634,000 | |
OTHER COMPREHENSIVE INCOME: | |||||||
Foreign currency translation adjustments | $ (415) | ||||||
TOTAL COMPREHENSIVE LOSS | $ 27,124 | $ 13,383 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Ordinary shares | Paid-in capital | Currency translation differences reserve | Accumulated deficit | Total |
Beginning balance at Dec. 31, 2017 | $ 63,443,000 | $ 457,000 | $ (64,509,000) | $ (609,000) | |
Beginning balance (in shares) at Dec. 31, 2017 | 9,613,145 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | 1,926,000 | 1,926,000 | |||
Net loss | (13,798,000) | (13,798,000) | |||
Ending balance at Dec. 31, 2018 | $ 0 | 87,240,000 | 872,000 | (78,307,000) | 9,805,000 |
Ending balance (in shares) at Dec. 31, 2018 | 15,575,682 | ||||
CHANGES DURING THE YEAR: | |||||
Issuance of shares and warrants, net | 21,865,000 | 21,865,000 | |||
Issuance of shares and warrants, net (In shares) | 5,960,787 | ||||
Exercise of share options | 6,000 | 6,000 | |||
Exercise of share options (in shares) | 1,750 | ||||
Other comprehensive income | 415,000 | 415,000 | |||
Issuance of shares, net | $ 0 | 26,500,000 | 0 | 0 | 26,500,000 |
Issuance of shares, net (in shares) | 21,523,670 | ||||
Reclassification of warrants due to reassessment | $ 0 | (3,628,000) | 0 | 0 | (3,628,000) |
Reclassification of warrants due to modification | 0 | 8,198,000 | 0 | 0 | 8,198,000 |
Share-based compensation | 0 | 748,000 | 0 | 0 | 748,000 |
Net loss | (14,374,000) | (14,374,000) | |||
Ending balance at Jun. 30, 2019 | $ 0 | 119,058,000 | 872,000 | (92,681,000) | 27,249,000 |
Ending balance (in shares) at Jun. 30, 2019 | 37,099,352 | ||||
Beginning balance at Dec. 31, 2018 | $ 0 | 87,240,000 | 872,000 | (78,307,000) | 9,805,000 |
Beginning balance (in shares) at Dec. 31, 2018 | 15,575,682 | ||||
CHANGES DURING THE YEAR: | |||||
Issuance of shares, net | 26,500,000 | 26,500,000 | |||
Issuance of shares, net (in shares) | 21,523,670 | ||||
Reclassification of warrants due to reassessment | (3,628,000) | (3,628,000) | |||
Reclassification of warrants due to modification | 8,198,000 | 8,198,000 | |||
Share-based compensation | 1,158,000 | 1,158,000 | |||
Net loss | (27,124,000) | (27,124,000) | |||
Ending balance at Dec. 31, 2019 | $ 0 | 119,468,000 | 872,000 | (105,431,000) | 14,909,000 |
Ending balance (in shares) at Dec. 31, 2019 | 37,099,352 | ||||
Beginning balance at Jun. 30, 2019 | $ 0 | 119,058,000 | 872,000 | (92,681,000) | 27,249,000 |
Beginning balance (in shares) at Jun. 30, 2019 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | 321,000 | 0 | 0 | 321,000 |
Net loss | (7,168,000) | (7,168,000) | |||
Ending balance at Sep. 30, 2019 | $ 0 | 119,379,000 | 872,000 | (99,849,000) | 20,402,000 |
Ending balance (in shares) at Sep. 30, 2019 | 37,099,352 | ||||
Beginning balance at Dec. 31, 2019 | $ 0 | 119,468,000 | 872,000 | (105,431,000) | 14,909,000 |
Beginning balance (in shares) at Dec. 31, 2019 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | 264,000 | 0 | 0 | 264,000 |
Net loss | (7,016,000) | (7,016,000) | |||
Ending balance at Jun. 30, 2020 | $ 0 | 119,732,000 | 872,000 | (112,447,000) | 8,157,000 |
Ending balance (in shares) at Jun. 30, 2020 | 37,099,352 | ||||
CHANGES DURING THE YEAR: | |||||
Share-based compensation | $ 0 | (357,000) | 0 | 0 | (357,000) |
Net loss | (2,449,000) | (2,449,000) | |||
Ending balance at Sep. 30, 2020 | $ 0 | $ 119,375,000 | $ 872,000 | $ (114,896,000) | $ 5,351,000 |
Ending balance (in shares) at Sep. 30, 2020 | 37,099,352 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Feb. 28, 2019 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||||
Common Stock, No Par Value | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | ||||
Net loss | $ (9,465) | $ (21,520) | $ (27,124) | $ (13,798) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||
Financing costs, net | 0 | 4,652 | 4,570 | 709 |
Depreciation | 77 | 70 | 281 | 66 |
Gain on sale of property and equipment | (19) | 0 | 45 | (8) |
Share-based payments | (93) | 1,069 | 1,158 | 1,926 |
Write-off of right-of-use related to restructuring | 85 | 0 | ||
Changes in operating asset and liabilities: | ||||
Prepaid and other current | 16 | 4,823 | ||
Other non-current assets | 5 | 70 | ||
Decrease (increase) in receivable | 2,305 | (3,496) | ||
Trade payables | (393) | 913 | 1,076 | 287 |
Accrued expenses and other | (1,235) | (621) | ||
Decrease (increase) in employee benefits | (347) | 528 | ||
Increase (decrease) in other payables | 603 | (587) | ||
Decrease (increase) in long-term prepaid expenses | 975 | (156) | ||
Net cash used in operating activities | (11,022) | (10,544) | (16,458) | (14,223) |
Investing activities: | ||||
Purchase of property and equipment | (34) | (346) | (95) | (213) |
Proceeds from sale of property and equipment | 119 | 0 | ||
Net cash provided by (used in) investing activities | 85 | (346) | (95) | (213) |
Financing activities: | ||||
Proceeds from issuance of ordinary shares and warrants | 0 | 30,500 | 30,500 | 22,900 |
Issuance costs | 0 | (3,879) | (3,879) | (2,298) |
Receipt of loan | 4,050 | |||
Repayment of loan | (4,033) | |||
Net cash provided by financing activities | 0 | 26,621 | 26,621 | 20,619 |
Increase (decrease) in cash, cash equivalents and restricted cash | (10,937) | 15,731 | 10,068 | 6,183 |
Cash, cash equivalents and restricted cash at, beginning of period | 17,705 | 7,637 | 7,637 | 1,454 |
Cash, cash equivalents and restricted cash at, end of period | $ 6,768 | $ 23,371 | $ 17,705 | $ 7,637 |
CONSOLIDATED STATEMENTS OF CA_3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Reconciliation in amounts on consolidated balance sheets: | |||||
Cash and cash equivalents | $ 6,768 | $ 23,241 | $ 7,517 | $ 17,575 | |
Restricted cash | 0 | 130 | 120 | 130 | |
Total cash, cash equivalents and restricted cash | 6,768 | 23,371 | 7,637 | 17,705 | $ 1,454 |
Supplemental disclosure of cash flow information: | |||||
Reclassification of warrants due to reassessment | 0 | 3,628 | |||
Reclassification of warrants due to modification | 0 | 8,198 | |||
Taxes paid in cash | 0 | 605 | |||
Interest paid in cash | $ 0 | $ 4 | $ 11 | ||
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||||
Reclassification of warrants from equity to liability | 3,628 | ||||
Reclassification of warrants from liability to equity | $ 8,198 |
The Company and Basis of Presen
The Company and Basis of Presentation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
The Company and Basis of Presentation | ||
The Company and Basis of Presentation | 1. The Company and Basis of Presentation Anchiano Therapeutics Ltd. is an early-stage preclinical biopharmaceutical company committed to discovering and developing new cancer therapies designed to target the products of mutated genes that are drivers of human malignancies. The Company is developing small-molecule pan-mutant RAS inhibitors and inhibitors of PDE10 and the β-catenin pathway. In November 2019, the Company discontinued clinical development of inodiftagene vixteplasmid. After a thorough evaluation of the available data, the Company determined there was a low probability of surpassing the pre-defined futility threshold at the planned interim analysis of its Phase 2 Codex study, which was evaluating inodiftagene vixteplasmid in patients with BCG-unresponsive non-muscle-invasive bladder cancer (“NMIBC”), and announced the discontinuation of the study. In January 2020, the Board of Directors of the Company approved management’s recommendation to close the Company’s office and laboratories located in Israel. Following the closure of the Israeli facilities at the end of May 2020, the Company’s sole remaining office is located in Cambridge, Massachusetts (for details, see Note 4 below). The Company currently maintains the lease on this facility in good standing and is also assessing the ability of the staff to continue working remotely under the restrictions of COVID-19. In March 2020 the World Health Organization declared the global novel coronavirus (COVID-19) outbreak a pandemic. As of October 14, 2020, the Company’s operations have not been significantly impacted by the COVID-19 outbreak. However, the Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its financial condition and operations, including ongoing and planned pre-clinical development activities. On July 2, 2020, the Company’s Chief Executive Officer Dr. Frank Haluska sent a letter to the Company’s Chairman outlining Dr. Haluska’s belief that events had occurred that were sufficient to trigger his ability to resign for “Good Reason” under his employment agreement. The Board informed Dr. Haluska that it disagreed with the letter’s assertions regarding “Good Reason” and treated the letter as a constructive resignation effective as of July 2, 2020. On July 12, 2020, Dr. Frank Haluska tendered his written resignation from the Company’s Board of Directors, effective immediately. Dr. Haluska referenced the matters articulated in his letter of July 2, 2020, and the Company’s response and actions following receipt of the letter as the basis for his resignation from the Board. It is the Company’s position, based on its legal counsel, that the CEO resigned without Good Reason, is not entitled to severance, and the Company will contest any and all claims for severance. Prior to the appointment of Mr. Neil Cohen as CEO in October 2020 (see below) the Board handled all matters related to CEO duties. On October 20, 2020, the Company appointed Mr. Neil Cohen as Chief Executive Officer of the Company, effective immediately. Mr. Cohen will continue to serve as a member of the Company’s board of directors. The Company also appointed Andrew Fine to serve as the Chief Financial Officer of the Company, effective immediately. Mr. Fine previously served as the Company’s Interim Chief Financial Officer pursuant to a subcontracting agreement. In light of business circumstances, and in order to conserve cash and preserve optionality while alternatives are being identified and assessed, the Company made a decision during July 2020 to undertake reductions in headcount and other cost saving measures. These include plans to temporarily reduce its internal and external research and development work on the Company's pan-RAS-inhibitor program until there is greater clarity regarding Anchiano's ability to fund the program. The Company continues to undertake actions for the promotion of the program and its assets and towards strengthening the protection of all related intellectual property. As a result of the above the Company took charges associated with severance and, discontinuation of external clinical development activities,. These charges amounted to $1.03 million for discontinuation of external clinical development activities and $0.5 million for severance (see Notes 6 and 7 below). The Company is incorporated and registered in Israel. The Company’s American Depositary Shares ("ADSs"), each representing five ordinary shares of the Company with no par value (the "ordinary shares"), began trading on the Nasdaq Capital Market (“Nasdaq”) in February 2019 under the symbol "ANCN". The Company’s ordinary shares traded on the Tel Aviv Stock Exchange (“TASE”) between August 2006 and June 2019, at which time the Company voluntarily delisted from the TASE. The Company wholly owns a subsidiary, Anchiano Therapeutics Israel Ltd., which itself wholly owns a Delaware-incorporated subsidiary, Anchiano Therapeutics, Inc. Liquidity The condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying condensed consolidated financial statements, the Company has incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at September 30, 2020 of $114.9 million. The Company has financed operations to date primarily through public and private placements of equity securities. The Company anticipates that it will continue to incur net losses for the foreseeable future. The Company believes that its existing cash and cash equivalents will only be sufficient to fund its projected cash needs into the first quarter of 2021. Accordingly, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. To meet future capital needs, the Company would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or may not be available to the Company on any terms. The failure of the Company to obtain sufficient funds on commercially-acceptable terms when needed, would have a material adverse effect on the Company’s business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of the Company’s expenses could vary materially and adversely as a result of a number of factors. The Company has based its estimates on assumptions that may prove to be wrong, and the Company’s expenses could prove to be significantly higher than it currently anticipates. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Unaudited Interim Financial Information The interim condensed consolidated financial statements included in this quarterly report are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of September 30, 2020, and its results of operations for the three and nine months ended September 30, 2020 and 2019, changes in shareholders’ equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other future annual or interim period. The December 31, 2019 balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Form 10‑K for the year ended December 31, 2019 as filed with the SEC. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2019 included in the Company’s Form 10‑K. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies. | NOTE 1 - NATURE OF OPERATIONS Anchiano Therapeutics Ltd. (the "Company") is a biopharmaceutical company dedicated to the discovery, development, and commercialization of novel,targeted therapies to treat cancer in areas of significant clinical need. Anchiano is developing small-molecule pan-RAS inhibitors and inhibitors of PDE10 and the β-catenin pathway, having discontinued active clinical development of inodiftagene vixteplasmid in November 2019. After a thorough evaluation of the data, the Company determined there was a low probability of surpassing the pre-defined futility threshold at the planned interim analysis of its Phase 2 Codex study, evaluating the gene therapy inodiftagene vixteplasmid in patients with BCG-unresponsive non-muscle-invasive bladder cancer (NMIBC), and announced the discontinuation of the study. The Group took steps to notify study investigators that enrollment and further treatment of patients on trial should stop immediately and is working to close the study (see also Note 5b below). In January 2020, the Board of Directors of the Company approved management’s recommendation to close the Company’s office and laboratories located in Israel. Following the closure of the Israeli facilities, the Company’s sole remaining office will be located in Cambridge, Massachusetts (for details, see Note 10 below). During the last two years, there has been a significant increase in the Company's activities in the USA, resulting from the Company's management's strategic decision to shift its development, financing and ongoing operations from Israel to the USA. The Company is incorporated and registered in Israel. In August 2018, the Company changed its name to Anchiano Therapeutics Ltd. from BioCancell Ltd. The Company’s American Depositary Shares ("ADSs"), each representing five ordinary shares of the Company with no par value (the "ordinary shares"), began trading on the Nasdaq Capital Market (“Nasdaq”) in February 2019 under the symbol "ANCN". Its ordinary shares were traded on the Tel Aviv Stock Exchange (“TASE”) between August 2006 and June 2019, at which time the Company voluntarily delisted from the TASE. The Company wholly owns a subsidiary, Anchiano Therapeutics Israel Ltd. (formerly BioCanCell Therapeutics Israel Ltd.), which itself wholly owns a Delaware-incorporated subsidiary, Anchiano Therapeutics, Inc. (formerly BioCanCell USA, Inc.) for the purposes of operating in the United States. This subsidiary is subject to the tax laws of the State of Delaware. The Company is subject to a number of risks including with regard to the successful development of therapeutics, the ability to obtain adequate financing, the ability to obtain FDA approval and reimbursement for any products the Company may develop, protection of intellectual property, fluctuations in operating results, dependence on key personnel and collaborative partners, rapid technological changes inherent in the target markets of any products the Company may develop, product liability , the introduction of substitute products and competition from larger companies. Liquidity The consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company has incurred losses and cash flow deficits from operations since inception, resulting in an accumulated deficit at December 31, 2019 of $105 million. The Company has financed operations to date primarily through public and private placements of equity securities. The Company anticipates that it will continue to incur net losses for the foreseeable future. The Company believes that its existing cash and cash equivalents will only be sufficient to fund its projected cash needs until the end of 2020. Accordingly, these factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. To meet future capital needs, the Company would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or even available to the Company. The failure of the Company to obtain sufficient funds on commercially-acceptable terms when needed, would have a material adverse effect on the Company’s business, results of operations and financial condition. The forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of the Company’s expenses could vary materially and adversely as a result of a number of factors. The Company has based its estimates on assumptions that may prove to be wrong, and the Company’s expenses could prove to be significantly higher than it currently anticipates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. b. Reclassifications Certain prior year amounts shown in the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to the 2020 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total shareholders’ equity, net loss, or loss per share. | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company previously prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as permitted in the United States (“U.S.”) based on the Company’s status as a foreign private issuer as defined by the U.S. Securities and Exchange Commission (the “SEC”). During 2019, the Company determined that it is no longer qualified as a foreign private issuer under the SEC rules. As a result, as of January 1, 2020, the Company is required to comply with all of the disclosure and reporting requirements applicable to U.S. domestic issuers. b. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. c. Functional currency Items included in the financial statements of the Company's entities are measured using the currency of the primary economic environment in which the Company operates. The Company's functional currency from inception through December 31, 2018 was the New Israeli Shekel (“NIS”), as this was the functional currency of its significant operations. Effective January 1, 2019, the Company, as well as its Israeli subsidiary, reassessed its functional currency and determined to change its functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the NIS. The change in functional currency was accounted for prospectively from January 1, 2019, and the financial statements prior to and including the period ended December 31, 2018 were not restated for the change in functional currency. In late 2018 and the beginning of 2019, the Company went through significant business developments and changes in its economic circumstances, that clearly indicate that the functional currency has changed, beginning January 2019, include the following: · There has been a significant increase in the Company’s activities in the USA, resulting from the Company’s management’s strategic decision to shift its development, financing and ongoing operations from Israel to the USA, as evidenced, inter alia, by the transfer of its operations and development activities, including the Company’s management, to the USA; · The initiation of a pivotal clinical trial in the USA, which was substantially larger than any previous clinical trial performed by the Group, all of which result in a significant increase in expenses and financing dominated in USD relative to other currencies; · The Company’s recent initial public offering on the Nasdaq Capital Market in USD, with additional funding going forward also expected to be denominated in USD. The Nasdaq listing has involved a significant increase in related USD expenses; and · The U.S. subsidiary entering into a license agreement with ADT Pharmaceuticals, LLC (“ADT”), which will be managed solely in dollars (see Note 5c for further details). Moreover, the discontinuation of the Codex study in November 2019 led to the closure of the Group’s Israeli operations (see Note 10 for further details) and the focus of the Company’s resources on programs related to the ADT agreement. In effecting the change in functional currency to the U.S. dollar, as of January 1, 2019, monetary assets and liabilities denominated in foreign currencies have been translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities were based on prior period translated amounts, and non-monetary assets acquired and non-monetary liabilities incurred after January 1, 2019 were translated at the approximate exchange rate prevailing at the date of the transaction. Expenses were translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses were included in the consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The exchange rate on the date of the change became the historical rate for subsequent re-measurement of non-monetary assets and liabilities into USD, the Company’s new functional currency. For periods prior to January 1, 2019, the effects of exchange-rate fluctuations on translating foreign currency monetary assets and liabilities into NIS were included in the statement of operations and comprehensive loss as foreign exchange gain/loss. Expense were translated into USD reporting currency at the balance sheet date at average exchange rates during the period, and assets and liabilities were translated at period-end exchange rates, except for equity transactions, which were translated at historical exchange rates. Translation gains and losses from the application of USD as the Company’s reporting currency, while NIS was the functional currency, are included as part of the cumulative foreign currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. d. Principles of consolidation The consolidated financial statements include the financial statements of Anchiano Therapeutics Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. e. Cash and cash equivalents Cash equivalents are short-term, highly-liquid deposits that are not restricted as to withdrawal and are readily convertible to cash with original maturities of three months or less, at the date acquired. f. Restricted cash Restricted cash deposited in an interest-bearing saving accounts which is used as a security for the Company’s office rent and car leasing. Cash expected to be restricted for more than one year from the balance sheet date is classified as long-term restricted cash in the consolidated balance sheets. g. Property and equipment: 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. h. Impairment of long-lived assets The Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair-value measure. i. Derivatives Measurement of derivative financial instruments Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for by recognizing them in profit or loss, as financing income or expense. Reassessment of derivatives The classification of a contract shall be reassessed at each balance sheet date. If the classification required changes as a result of events during the period, the contract shall be reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. If a contract is reclassified from permanent or temporary equity to an asset or a liability, the change in fair value of the contract during the period the contract was classified as equity shall be accounted for as an adjustment to shareholders' equity. The contract subsequently shall be marked to fair value through earnings. Issuance of parcel of securities The consideration received from the issuance of a parcel of equity securities is allocated according to the relative fair value of the instruments. j. Severance pay The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment (and pro rata for a portion thereof). Under Section 14 of the Severance Pay Law, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with investment firms or insurance companies. Payments in accordance with Section 14 release the Group from any future severance payments in respect of those employees. As a result, the Group does not recognize any liability for severance pay from the time Section 14 has been adopted with respect to an employee, and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet. For the period during which the Group’s employees in Israel were not subject to Section 14 are accounted for under the Shut Down method of accounting. Accordingly, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees, multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits is recorded as an asset on the Company's balance sheet under Funds in respect of employee rights upon retirement and other short-term assets. k. Contingencies Certain conditions may exist, as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450‑20‑25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. l. Share-based compensation Share-based compensation expense related to share awards is recognized based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, including the expected term of the option, the expected volatility of the price of the Company’s ordinary shares and the expected dividend yield of ordinary shares. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forfeitures are accounted for by estimating the number of awards expected to be forfeited instead of as they occur. m. Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including clinical trial and materials, management development of production processes, salaries, wages and incidentals, laboratory rent and maintenance. All costs associated with research and developments are expensed as incurred. Intangible assets that are purchased from others for use in R&D activities in a transaction other than a business combination are capitalized only if they have alternative future use. Otherwise, such assets are expensed. For the two years ended December 31, 2019, the Company did not capitalize any intangible asset purchased at an asset acquisition. n. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses as incurred, since the recoverability of such expenditures is uncertain. o. Income taxes: 1) Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently-enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. 2) Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. p. Loss per share Basic loss per share is computed on the basis of the net loss for the period divided by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted-average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following ordinary shares underlying stock options and warrants were excluded from the calculation of diluted net loss per ordinary share, because their effect would have been anti-dilutive for the years presented: Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 q. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: 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 or active market data of similar or identical assets or liabilities. 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. See Note 6c. r. Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, and pledged deposits. The Company deposits cash and cash equivalents with highly-rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. s. Newly issued and recently adopted accounting pronouncements: Accounting pronouncements recently adopted 1) In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). ASU 2016‑02 requires lessees to recognize most leases on their balance sheet as a right-of-use (ROU) asset and a lease liability. Leases are classified as either operating or finance based on criteria similar to existing lease accounting, with the classification affecting the pattern and classification of expense recognition in the statement of operations. This standard became effective on January 1, 2019. A modified retrospective transition approach is allowed, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. Operating-lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate, based on the information available at the commencement date, to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option, if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. The most significant effects of adoption relate to : (i) the recognition of approximately $1,199 thousand for ROU assets and $1,116 thousand for lease liabilities on the Company’s balance sheet for its operating leases of real estate, vehicles and equipment (the difference between the additional lease assets and lease liabilities did not impact the retained earnings), and (ii) the requirement to provide significant new disclosures regarding the Company’s leasing activities and to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. However, the adoption of this standard does not have a material impact on the Company’s consolidated statements of income and consolidated statements of cash flows. Effects of the initial application of the new standard on the Company’s consolidated balance sheet as of January 1, 2019: Balance at Balance at January 1, 2019 January 1, 2019 as reported based on ASC based on 842 ASC 840 Effect of change ROU assets 1,809 — 1,809 Prepaid expense — 83 Lease liabilities 1,726 — 1,726 Recently Issued Accounting Pronouncements 2) In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to non-employees for goods and services and aligns most of the guidance on such payments to the non-employees with the requirements for share-based payments granted to employees. The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein, using a modified retrospective approach. Early adoption is permitted. The Company adopted the guidance as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements. 3) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820. After the adoption of ASU 2018-13, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements; The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein. The amendments on changes in unrealized gains and losses should be applied prospectively for only the most recent period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented on their effective date. Early adoption is permitted, and an entity also is permitted to early adopt any removed or modified disclosures on issuance of ASU 2018-13, and delay adoption of the additional disclosures until their effective date. After adopting ASU 2018-13, the Company’s financial statements will include fewer disclosures about fair value measurements; however, the Company does not expect the adoption of ASU 2018-13 to otherwise have a material effect on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features. The amendments of this ASU update the classification analysis of certain equity-linked financial instruments, or embedded features, with down round features, as well as clarify existing disclosure requirements for equity-classified instruments. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has early adopted ASU 2017-11 retrospectively. |
Accrued expenses and other
Accrued expenses and other | 9 Months Ended |
Sep. 30, 2020 | |
Accrued expenses and other | |
Accrued expenses and other | 3. Accrued expenses and other Accrued and other current liabilities consist of the following for the periods indicated (in thousands): September 30, December 31, 2020 2019 Accrued expenses $ 1,361 $ 372 Restructuring accrual 238 2,161 Payroll and related 21 60 Liability for employee rights upon retirement — 262 $ 1,620 $ 2,855 |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Leases | ||
Leases | 4. Leases In January 2018, the Company signed an agreement to rent a laboratory and offices in Jerusalem through May 2023. The Company had an option to extend the agreement by another five years. The annual rent (including management fees) is approximately $0.4 million and is linked to the Israeli Consumer Price Index. Pursuant to the agreement, bank guarantees of $0.1 million were provided to the property owner. In January 2020, pursuant to the Company’s decision to close its Israeli operations, the agreement was modified such that the Company vacated the facilities on May 30, 2020 but will continue to make scheduled lease payments through October 31, 2020. The Company recorded restructuring expense of $247,000 related to the modification of the Israeli lease agreement and settled all obligations associated with the lease. In May 2018, the Company signed an agreement to rent space for its headquarter offices in Cambridge, Massachusetts. This agreement was amended in October 2019 to reflect relocating to a new 2,400 square foot suite within the same facility effective February 1, 2020. The annual rent is approximately $0.2 million. The amended lease term ends January 31, 2022 and there are no options to extend the lease. The Company currently maintains the lease in good standing and is assessing the ability of the staff to continue working remotely under the restrictions of COVID-19. | NOTE 4 - LEASES : The Group leases facilities, labs offices and cars for use in its operations, which are classified as operating leases. In addition to rent, the leases may require the Group to pay directly for fees, insurance, maintenance and other operating expenses. In January 2018, the Group signed an agreement to rent a laboratory and offices in Jerusalem’s Har Hotzvim industrial zone through May 2023. The Group has an option to extend the agreement by another five years. The annual rent (including management fees) is approximately $382 thousand and is linked to the Israeli CPI. Pursuant to the agreement, bank guarantees of $113 thousand were provided to the property owner. In January 2020, the agreement was modified such that it will terminate on October 31, 2020 and the Company will pay rent until that date. In November 2013, the Group signed a rental agreement with the Development & Management of Jerusalem Industrial Zones Administration Ltd. in the Edmund J. Safra High-Tech Village in Givat Ram, Jerusalem, which was extended until December 2019. The total annual rent was approximately $65 thousand. Under the agreement, a bank guarantee of $18 thousand was provided to the property owner. In May 2018, Anchiano Therapeutics, Inc. signed a new agreement to rent space for offices in Cambridge, Massachusetts, until December 2021. The annual rent is approximately $140 thousand. The lease term and the discount rate related to Company’s operating lease right-of-use assets and related lease liabilities are as follows: December 31, 2019 Weighted-average remaining lease term (in years) 3.2 Weighted-average discount rate 3.5 The components of lease expense and cash flows were as follows (in thousands): December 31, 2019 Fixed payment and variable payments that depend on an index or rate Supplemental cash flow information related to operating leases was as follows: Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 571 Right-of-use assets obtained in exchange for new operating lease liabilities 73 As of December 31, 2019, the maturity of lease liabilities under our non-cancelable operating leases were as follows: 2020 409 2021 371 2022 363 2023 57 Total future minimum lease payments 1,200 Less: interest (84) Present value of operating lease liabilities 1,116 Future minimum lease payments of the operating lease liabilities under ASC 840 as of January 1, 2019 were as follows: 2019 537 2020 440 2021 410 2022 288 2023 51 Total future minimum lease payments 1,726 |
License Agreement
License Agreement | 9 Months Ended |
Sep. 30, 2020 | |
License Agreement | |
License Agreement | 5. License Agreement In September 2019, the Company announced that it entered into an option to license agreement with ADT Pharmaceuticals, LLC (“ADT”). Pursuant to the terms and conditions set forth in the agreement, the parties agreed to conduct research and development activities of novel small-molecule inhibitors (RAS and PDE10/β-catenin). As part of the arrangement, the Company is primarily responsible for the research, development, manufacturing and regulatory activities and ADT assists with the research activities as necessary in exchange for a quarterly fee from the Company. In connection with the agreement, ADT also granted the Company exclusive rights to research, develop, manufacture and commercialize the aforementioned compounds relating to patents owned by ADT and any products containing such compounds worldwide. In consideration for the rights granted under the agreement, the Company committed to pay ADT (i) a $3 million upfront fee; (ii) a fee upon transfer of the know-how and intellectual property rights to the Company; and then (iii) additional payments, including milestone and royalty payments. The Company has the ability to terminate the agreement at any time in its entirety or on a compound-by-compound basis after providing 90 days written notice to ADT. The upfront fee was paid in the third quarter of 2019. The Company accounted for the upfront fee and additional payments as a research and development expenses and continues to make ongoing payments to ADT in support of its maintenance of the Company's assets. In April 2020, the Company notified Yissum Technology Transfer Company of the Hebrew University Ltd. (“Yissum”) that as a result of the Company’s previous decision to discontinue clinical development of inodiftagene, it will cease payments to maintain intellectual property (“IP”) it licensed from Yissum that supported the development and as related to a licensing and development agreement between the parties (“License Agreement”). In August 2020 the Company agreed with Yissum on termination of the License Agreement, the Company destroyed or returned all IP documentation to Yissum and Yissum and the Company mutually waived, released and discharged the other from all claims of any type. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring | |
Restructuring | 6. Restructuring Restructuring provisions are recognized for the direct expenditures arising from restructuring initiatives, where the plans are sufficiently detailed and where appropriate communication has been made to those affected. The Company has recorded restructuring expenses related principally to contract termination costs due to the discontinuation of the clinical trials to CROs and manufacturers and contractual involuntary termination benefits to employees which have been accounted for as ongoing benefit arrangements and associated termination costs related to the reduction of its workforce. One-time termination benefits are expensed at the date the employees are notified, unless the employees must provide future services beyond a minimum retention period, in which case the benefits are expensed ratably over the future service periods. A provision for contract termination costs, in which a contract is terminated or the entity will continue to incur costs pursuant to contract for its remaining term without economic benefit, is recognized only when the contract is terminated or when the entity permanently ceases using the rights granted under the contract. In November 2019, the Company decided to discontinue its Phase 2 Codex study in patients with BCG-unresponsive NMIBC. In connection with this decision, the Company is required to make certain payments under contracts with CROs and with manufactures of the drug in order to terminate the contracts and close the trials. This restructuring plan included a reduction in the workforce of seven employees. In January 2020, the Board of Directors approved management’s recommendation to close the Company’s office and laboratories located in Israel. In connection with this restructuring, the employment of the remaining five Israeli employees was terminated in the second quarter of 2020. As noted above, in conjunction with this decision the Company renegotiated its lease for Israeli laboratory and office space. In connection with this decision, the Company vacated the facilities on May 31, 2020 but will continue to make scheduled lease payments through October 31, 2020. In the first quarter of 2020, the Company recorded a restructuring charge to adjust its operating lease right of use asset and operating lease liability to reflect the loss on the early termination of the Israeli lease obligation. The following table represents a roll forward of the restructuring and other activities noted above (in thousands): CRO, Facility Manufacturing Severance- and and other related related Leases Total Balance, January 1, 2020 $ 2,572 $ 336 $ — $ 2,908 Expenses 502 — 247 749 Paid or consumed (2,835) (336) (247) (3,138) Balance, September 30, 2020 $ 238 $ — $ — $ 238 |
Research and development
Research and development | 9 Months Ended |
Sep. 30, 2020 | |
Research and development | |
Research and development | 7. Research and development As noted above, and in conjunction with the Company’s decision to reassess its strategy around research and development efforts of its scientific and assets, in the third quarter the Company took charges associated with severance and, discontinuation of clinical development activities,. These charges amounted to $1.03 million for discontinuation of clinical development activities and $0.5 million for severance of research and development personnel. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shareholders' Equity | ||
Shareholders' Equity | 8. Shareholders’ Equity a. 2018 Private Placement In June 2018, the Company completed a $22.9 million fundraising round from investors in the United States and Israel. In consideration for the investment, the Company issued 5,960,787 ordinary shares at a price per share of approximately $3.842, as well as 2,713,159 warrants to acquire additional shares equal to 80% of the shares issued, at an exercise price per share of NIS 16.20 (approximately $4.32). The warrants are exercisable for five years from December 31, 2018, the closing date of the transaction, and may be exercised on a cashless basis. In addition, the investors were granted price protection rights (to shares and warrants) in the event of a future share issuance by the Company wherein the price does not increase by at least approximately 42.86% over the price per share in the fundraising (or is less than the adjusted price per share, if the price has already been adjusted). For details of an allocation that took place in 2019 pursuant to these rights, see Note 7b below. The warrants and shares were recorded within equity on the issuance date. Effective January 1, 2019, the Company changed its functional currency from NIS to USD. Due to this change, the exercise price of the warrants was no longer denominated in the Company’s functional currency and therefore not considered indexed to the Company’s own shares according to ASC 815‑40. Accordingly, the Company recorded the fair value of the warrants as a liability at January 1, 2019. Subsequently, upon the Company’s Nasdaq initial public offering on February 14, 2019, the warrants’ term was modified such that the exercise price currency was changed to USD. As a result, the warrants were once again considered indexed to the Company’s own shares according to ASC 815‑40. Accordingly, the fair value of the warrants at February 14, 2019 was reclassified from a liability to equity on that date. The following table summarizes the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs: 2019 Fair value on January 1, 2019 $ 3,628 Adjustments-finance expenses 4,570 Fair value on February 14, 2019 $ 8,198 The Company has determined the fair value of the warrants (a Level 3 valuation) as of January 1, 2019 and February 14, 2019. The fair value of these warrants was estimated by implementing the Probability-Weighted Expected Return Method or the Black-Scholes Method. The following parameters were used: Derivative Financial Instrument February 14, 2019 January 1, 2019 Share price $ 1.84 $ 2.50 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % b. Public Offering On February 14, 2019, the Company raised gross proceeds of $30.5 million in its Nasdaq initial public offering (“IPO”), allocating 2,652,174 ADSs, each representing five ordinary shares of the Company. The ADSs are listed under the symbol “ANCN.” In accordance with price protection rights granted in 2018 and activated in the offering (see Note 7a above for details and accounting treatment), the Company issued an additional 8,262,800 ordinary shares (equivalent to 1,652,560 ADSs) to rights holders and adjusted their warrants to be exercisable for an additional 6,207,330 ordinary shares (equivalent to 1,241,466 ADSs). c. Share-based compensation The Company has two share-based compensation plans under which share options or other share-based awards have been granted: the 2011 Share Option Plan and the 2017 Share Option Plan (the “2017 Plan”). The 2017 Plan replaced the 2011 Share Option Plan with respect to future grants; and, therefore, no further awards may be made under 2011 Share Option Plan. The Compensation Committee of the Board of Directors and the Board of Directors administer these plans. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on the Company’s historical volatility. The risk-free interest rate assumption is based on observed Treasury yields over the expected term of the options granted with USD-denominated exercise prices (options granted in the past with NIS-denominated exercise prices used the equivalent Israeli government bond yields). The Company’s management uses the mid-point between the vesting date and the contractual term for each vesting tranche or its expectations, as applicable, of each option as its expected term. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding The fair value of each option granted in the nine months ended September 30, 2019 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2019 Value of ordinary share $1.03 - $1.54 Dividend yield 0% Expected volatility 51.5% - 68.6% Risk-free interest rate 2.2% - 2.5% Expected term (years) 5.5 - 6.9 The fair value of each option granted in the nine months ended September 30, 2020 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2020 Value of ordinary share $0.15 - $0.17 Dividend yield 0% Expected volatility 64.9% - 67.4% Risk-free interest rate 0.30% to 0.39% Expected term (years) 5.5 - 6.5 The following table summarizes the number of options outstanding and exercisable as of September 30, 2020: Weighted Average Weighted Remaining Number of Average Contractual Life in Shares Exercise Price Years Options outstanding - January 1, 2020 3,822,374 $ 2.50 8.5 Granted 885,000 Forfeited/expired/cancelled (1,578,031) Options outstanding - September 30, 2020 3,129,343 $ 2.44 7.9 Options exercisable - September 30, 2020 2,389,840 $ 3.01 7.5 The aggregate intrinsic value of both outstanding and exercisable options at September 30, 2020 is $0. The following table illustrates the effect of share-based compensation on the statements of operations (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Research and development $ (290) $ 154 $ (166) $ 438 General and administrative (67) 168 70 632 $ (357) $ 322 $ (96) $ 1,070 The negative amounts for both Research and development and General and administrative reflect the forfeiture of vested stock options and the reversal of accrued compensation on account of future vesting on stock options that were granted to employees who were terminated as part of the Company's restructuring activities as mentioned above. | NOTE 6 - SHARE CAPITAL: a. Rights of the Company’s ordinary shares Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends if declared by the Board of Directors, whenever funds are legally available. Since its inception, the Company has not declared any dividends. b. 2018 Private Placement In June 2018, the Company completed a $22.9 million fundraising round from investors in the United States and Israel, led by Shavit Capital Funds. In consideration for the investment, the Company issued 5,960,787 ordinary shares (constituting approximately 38% of the Company’s issued and outstanding share capital after completion of the transaction) at a price per share of approximately $3.842, as well as warrants to acquire additional shares equal to 80% of the shares issued, at an exercise price per share of NIS 16.20 (approximately $4.32). The warrants are exercisable for five years from the closing date of the transaction, as of December 31, 2018, and may be exercised on a cashless basis. In addition, the investors were granted price protection rights (to shares and warrants) in the event of a future share issuance by the Company wherein the price does not increase by at least approximately 42.86% over the price per share in the fundraising (or is less than the adjusted price per share, if the price has already been adjusted). For details of an allocation that took place in 2019 pursuant to these rights, see Note 6c below. The warrants and shares were recorded within equity on the issuance date (see note 2s on the adoption of ASU2017). As detailed in Note 2c, the Company changed its functional currency from NIS to USD as of January 1, 2019. Due to this change from this date, the exercise price of the warrants were no longer denominated in the Company’s functional currency and therefore not considered indexed to the Company’s own stock according to ASC 815‑40. Additionally, upon the Company’s Nasdaq IPO of February 14, 2019, the warrants’ term modified such that the exercise price currency was changed to USD. As a result, the warrants were reclassified within equity on that date. Consequently, the warrants were measured at fair value from January 1, 2019 until February 14, 2019, with resulting finance expenses of $4.6 million, until they were reclassified within equity. The following table summarizes the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs: 2019 Fair value on January 1, 2019 3,628 Adjustments- finance expenses 4,570 Fair value on February 14, 2019 8,198 The Company has determined the fair value of the warrants (a Level 3 valuation) as of January 1, 2019 and February 14, 2019. The fair value of these warrants was estimated by implementing the Probability-Weighted Expected Return Method or the Black-Scholes Method. The following parameters were used: Derivative Financial Instrument February 14, 2019 January 1, 2019 Stock price (USD) $ 1.84 $ 2.5 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % c. 2019 Public offering On February 14, 2019, the Company raised $30.5 million in its Nasdaq initial public offering (“IPO”), allocating 2,652,174 ADSs, each representing five ordinary shares of the Company. The ADSs are listed under the symbol “ANCN”. In accordance with price protection rights granted in 2018 and activated in the offering (see Note 6b above for details and accounting treatment), the Company allocated an additional 8,262,800 ordinary shares (equivalent to 1,652,560 ADSs) to rights holders and adjusted their warrants to be exercisable for an additional 6,207,330 ordinary shares (equivalent to 1,241,466 ADSs). d. 2018 Reverse Split and Capitalization In June 2018, the Company completed a 10:1 reverse share split, canceled the par value of its ordinary shares and increased its authorized capital to 30 million ordinary shares. In December 2018, the Company increased its authorized capital to 100 million ordinary shares. All amounts of shares, underlying shares, share prices and exercise prices in these financial statements reflect such adjustments. e. Share-based compensation Until 2016, the Company issued options to purchase shares to its employees, directors and other service providers/consultants pursuant to its 2011 Share Option Plan. From 2017, the Company has issued options pursuant to its 2017 Equity-Based Incentive Plan (the “2017 Plan”). As of December 31, 2019 and 2018, 3,501,486 shares and 586,580 shares respectively remain available for grant under the 2017 Plan. In accordance with the terms of the 2017 Plan, on January 1 of each calendar year during the term of the 2017 Plan, the number of shares available for issuance under the 2017 Plan shall be increased by 4% of the total number of company shares outstanding on December 31 of the immediately preceding calendar year, or such lesser number as shall be determined by the administrator of the 2017 Plan, subject to adjustments required for recapitalization events. The Plan is designed to enable the Company to grant options to purchase ordinary shares under various and different tax regimes including, without limitation, as ISOs or non-qualified stock options for U.S. residents, and pursuant and subject to Sections 102 or 3(i) of the Israeli Tax Ordinance. The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on the Company’s historical volatility. The risk-free interest rate assumption is based on observed Treasury yields over the expected term of the options granted with USD-denominated exercise prices (options granted in the past with NIS-denominated exercise prices used the equivalent Israeli government bond yields). The Company’s management uses the mid-point between the vesting date and the contractual term for each vesting tranche or its expectations, as applicable, of each option as its expected term. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding. Anti-Dilution Rights As part of the terms of his employment, the CEO was granted options to purchase ordinary shares totaling 7% of the Company’s fully-diluted share capital, and anti-dilution protections that were activated upon the closing of subsequent fundraising rounds. As part of the 2018 private placement described in Note 6B above, the CEO waived his entitlement to additional future grants. Options granted to employees and directors: In the years ended December 31, 2019 and December 31, 2018, the Company granted options to purchase ordinary shares as follows: Year ended December 31, 2019 Award Exercise Vesting amount price range period Expiration Employees $ 0.60 - $ 1.55 4 years Directors 495,000 $ 0.47 - $ 1.03 3 years Year ended December 31, 2018 Award amount Exercise price range Vesting period Expiration Employees 1,379,203 $ 2.94 - $ 4.00 2-4 years Directors 353 NIS 14.73 4 years The fair value of options granted during 2019 and 2018 was $0.8 million and $2.6 million, respectively. The fair value of options granted to employees and directors is based on the share price on grant date and was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: Year ended December 31 2019 2018 Value of ordinary share $ - $ $ - $ 4.00 Dividend yield — — Expected volatility 51.5%-68.8 % 54.0%-71.8 % Risk-free interest rate 1.7%-2.5 % 1.41%-3.10 % Expected term 4.95-7 years 5.38-7 years The total unrecognized share-based compensation cost at December 31, 2019 is $0.7 million, which is expected to be recognized over a weighted-average period of 2.6 years. Summary of outstanding and exercisable options: The following table summarizes the number of options outstanding for the years ended December 31, 2019 and December 31, 2018, and related information: Employees, directors and consultants Number of options USD (1) Outstanding at December 31, 2017 $ Granted $ Forfeited (90,282) $ 2.69 Expired (54,519) $ 5.22 Exercised (1,750) $ 3.13 Outstanding at December 31, 2018 2,453,767 $ 3.32 Granted 1,593,590 $ 1.03 Forfeited (221,611) $ 1.30 Expired (3,372) $ 13.32 Exercised — — Outstanding at December 31, 2019 3,822,374 $ 2.50 (1) Weighted-average exercise price per ordinary share. NIS-denominated exercise prices were converted to USD using the year-end Bank of Israel representative rate. The following tables summarizes information concerning outstanding and exercisable options as of December 31, 2019, in terms of ordinary shares: December 31, 2019 Options outstanding Options exercisable Number of Weighted Number of Weighted options Average options Average Exercise outstanding Remaining exercisable Remaining prices per at end of Contractual at end of contractual share (USD) year Life year Life $25-72 6,948 1.98 6,948 1.98 $6-7 14,189 3.90 14,189 3.90 $3-5 1,079,056 8.42 786,513 8.39 $2-3 1,330,452 7.60 824,326 7.30 $1-2 1,336,729 9.48 180,188 9.39 $0-1 55,000 9.87 — — 3,822,374 1,812,164 The aggregate intrinsic value of the total of both the outstanding and exercisable options as of December 31, 2019, is $0. The following table illustrates the effect of share-based compensation on the statements of operations: Year ended December 31 2019 2018 Research and development $ 470 $ 275 General and administrative $ 688 $ 1,651 $ 1,158 $ 1,926 |
Net Loss per share
Net Loss per share | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss per share | |
Net Loss per share | 9. Net Loss per share Basic loss per share is computed on the basis of the net loss for the period divided by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted-average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following ordinary shares underlying stock options and warrants were excluded from the calculation of diluted net loss per ordinary share, because their effect would have been anti-dilutive for the three and nine month periods presented: September 30 2020 2019 Stock Options 3,129,343 3,985,858 Warrants 10,975,959 10,975,959 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Basis of presentation | a. Basis of presentation The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company previously prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), as permitted in the United States (“U.S.”) based on the Company’s status as a foreign private issuer as defined by the U.S. Securities and Exchange Commission (the “SEC”). During 2019, the Company determined that it is no longer qualified as a foreign private issuer under the SEC rules. As a result, as of January 1, 2020, the Company is required to comply with all of the disclosure and reporting requirements applicable to U.S. domestic issuers. | |
Use of Estimates | a. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. | b. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis, including those related to share-based compensation, leases and derivatives. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. |
Reclassification | b. Reclassifications Certain prior year amounts shown in the accompanying unaudited condensed consolidated financial statements have been reclassified to conform to the 2020 presentation. These reclassifications did not have any effect on total current assets, total assets, total current liabilities, total liabilities, total shareholders’ equity, net loss, or loss per share. | |
Functional currency | c. Functional currency Items included in the financial statements of the Company's entities are measured using the currency of the primary economic environment in which the Company operates. The Company's functional currency from inception through December 31, 2018 was the New Israeli Shekel (“NIS”), as this was the functional currency of its significant operations. Effective January 1, 2019, the Company, as well as its Israeli subsidiary, reassessed its functional currency and determined to change its functional currency to the U.S. dollar (“dollar”, “USD” or “$”) from the NIS. The change in functional currency was accounted for prospectively from January 1, 2019, and the financial statements prior to and including the period ended December 31, 2018 were not restated for the change in functional currency. In late 2018 and the beginning of 2019, the Company went through significant business developments and changes in its economic circumstances, that clearly indicate that the functional currency has changed, beginning January 2019, include the following: · There has been a significant increase in the Company’s activities in the USA, resulting from the Company’s management’s strategic decision to shift its development, financing and ongoing operations from Israel to the USA, as evidenced, inter alia, by the transfer of its operations and development activities, including the Company’s management, to the USA; · The initiation of a pivotal clinical trial in the USA, which was substantially larger than any previous clinical trial performed by the Group, all of which result in a significant increase in expenses and financing dominated in USD relative to other currencies; · The Company’s recent initial public offering on the Nasdaq Capital Market in USD, with additional funding going forward also expected to be denominated in USD. The Nasdaq listing has involved a significant increase in related USD expenses; and · The U.S. subsidiary entering into a license agreement with ADT Pharmaceuticals, LLC (“ADT”), which will be managed solely in dollars (see Note 5c for further details). Moreover, the discontinuation of the Codex study in November 2019 led to the closure of the Group’s Israeli operations (see Note 10 for further details) and the focus of the Company’s resources on programs related to the ADT agreement. In effecting the change in functional currency to the U.S. dollar, as of January 1, 2019, monetary assets and liabilities denominated in foreign currencies have been translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities were based on prior period translated amounts, and non-monetary assets acquired and non-monetary liabilities incurred after January 1, 2019 were translated at the approximate exchange rate prevailing at the date of the transaction. Expenses were translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses were included in the consolidated statement of operations and comprehensive loss as foreign exchange gain (loss). The exchange rate on the date of the change became the historical rate for subsequent re-measurement of non-monetary assets and liabilities into USD, the Company’s new functional currency. For periods prior to January 1, 2019, the effects of exchange-rate fluctuations on translating foreign currency monetary assets and liabilities into NIS were included in the statement of operations and comprehensive loss as foreign exchange gain/loss. Expense were translated into USD reporting currency at the balance sheet date at average exchange rates during the period, and assets and liabilities were translated at period-end exchange rates, except for equity transactions, which were translated at historical exchange rates. Translation gains and losses from the application of USD as the Company’s reporting currency, while NIS was the functional currency, are included as part of the cumulative foreign currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. | |
Principles of consolidation | d. Principles of consolidation The consolidated financial statements include the financial statements of Anchiano Therapeutics Ltd. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. | |
Cash and cash equivalents | e. Cash and cash equivalents Cash equivalents are short-term, highly-liquid deposits that are not restricted as to withdrawal and are readily convertible to cash with original maturities of three months or less, at the date acquired. | |
Restricted cash | f. Restricted cash Restricted cash deposited in an interest-bearing saving accounts which is used as a security for the Company’s office rent and car leasing. Cash expected to be restricted for more than one year from the balance sheet date is classified as long-term restricted cash in the consolidated balance sheets. | |
Property and equipment | g. Property and equipment: 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. | |
Impairment of long-lived assets | h. Impairment of long-lived assets The Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair-value measure. | |
Derivatives | i. Derivatives Measurement of derivative financial instruments Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for by recognizing them in profit or loss, as financing income or expense. Reassessment of derivatives The classification of a contract shall be reassessed at each balance sheet date. If the classification required changes as a result of events during the period, the contract shall be reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. If a contract is reclassified from permanent or temporary equity to an asset or a liability, the change in fair value of the contract during the period the contract was classified as equity shall be accounted for as an adjustment to shareholders' equity. The contract subsequently shall be marked to fair value through earnings. Issuance of parcel of securities The consideration received from the issuance of a parcel of equity securities is allocated according to the relative fair value of the instruments. | |
Severance pay | j. Severance pay The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment (and pro rata for a portion thereof). Under Section 14 of the Severance Pay Law, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made on behalf of the employee with investment firms or insurance companies. Payments in accordance with Section 14 release the Group from any future severance payments in respect of those employees. As a result, the Group does not recognize any liability for severance pay from the time Section 14 has been adopted with respect to an employee, and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet. For the period during which the Group’s employees in Israel were not subject to Section 14 are accounted for under the Shut Down method of accounting. Accordingly, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees, multiplied by the number of years of employment as of the balance sheet date. The Company's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and accruals. The value of these deposits is recorded as an asset on the Company's balance sheet under Funds in respect of employee rights upon retirement and other short-term assets. | |
Contingencies | k. Contingencies Certain conditions may exist, as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450‑20‑25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. | |
Share-based compensation | l. Share-based compensation Share-based compensation expense related to share awards is recognized based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes-Merton option pricing model. The Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, including the expected term of the option, the expected volatility of the price of the Company’s ordinary shares and the expected dividend yield of ordinary shares. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forfeitures are accounted for by estimating the number of awards expected to be forfeited instead of as they occur. m | |
Research and development costs | m. Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including clinical trial and materials, management development of production processes, salaries, wages and incidentals, laboratory rent and maintenance. All costs associated with research and developments are expensed as incurred. Intangible assets that are purchased from others for use in R&D activities in a transaction other than a business combination are capitalized only if they have alternative future use. Otherwise, such assets are expensed. For the two years ended December 31, 2019, the Company did not capitalize any intangible asset purchased at an asset acquisition. n | |
Patent Costs | n. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expenses as incurred, since the recoverability of such expenditures is uncertain. | |
Clinical trial accruals | o | |
Income taxes | o. Income taxes: 1) Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently-enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. 2) Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. p | |
Loss per share | p. Loss per share Basic loss per share is computed on the basis of the net loss for the period divided by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted-average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following ordinary shares underlying stock options and warrants were excluded from the calculation of diluted net loss per ordinary share, because their effect would have been anti-dilutive for the years presented: Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 | |
Fair value measurement | q. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: 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 or active market data of similar or identical assets or liabilities. 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. See Note 6c. r | |
Concentration of credit risks | r. Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, and pledged deposits. The Company deposits cash and cash equivalents with highly-rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. s | |
Recent Accounting Pronouncement | s. Newly issued and recently adopted accounting pronouncements: Accounting pronouncements recently adopted 1) In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”). ASU 2016‑02 requires lessees to recognize most leases on their balance sheet as a right-of-use (ROU) asset and a lease liability. Leases are classified as either operating or finance based on criteria similar to existing lease accounting, with the classification affecting the pattern and classification of expense recognition in the statement of operations. This standard became effective on January 1, 2019. A modified retrospective transition approach is allowed, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. Operating-lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, while the ROU assets are also adjusted for any prepaid or accrued lease payments. The Company uses its incremental borrowing rate, based on the information available at the commencement date, to determine the present value of the lease payments. The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option, if it reasonably certain that the Company will exercise the option. After lease commencement, the Company measures the lease liability at the present value of the remaining lease payments using the discount rate determined at lease commencement (as long as the discount rate hasn’t been updated as a result of a reassessment event). The Company subsequently measures the ROU asset at the present value of the remaining lease payments, adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if relevant and any unamortized initial direct costs. Lease expenses for lease payments are recognized on a straight-line basis over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise or not exercise the option to renew or terminate the lease. The most significant effects of adoption relate to : (i) the recognition of approximately $1,199 thousand for ROU assets and $1,116 thousand for lease liabilities on the Company’s balance sheet for its operating leases of real estate, vehicles and equipment (the difference between the additional lease assets and lease liabilities did not impact the retained earnings), and (ii) the requirement to provide significant new disclosures regarding the Company’s leasing activities and to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. However, the adoption of this standard does not have a material impact on the Company’s consolidated statements of income and consolidated statements of cash flows. Effects of the initial application of the new standard on the Company’s consolidated balance sheet as of January 1, 2019: Balance at Balance at January 1, 2019 January 1, 2019 as reported based on ASC based on 842 ASC 840 Effect of change ROU assets 1,809 — 1,809 Prepaid expense — 83 Lease liabilities 1,726 — 1,726 Recently Issued Accounting Pronouncements 2) In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to non-employees for goods and services and aligns most of the guidance on such payments to the non-employees with the requirements for share-based payments granted to employees. The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein, using a modified retrospective approach. Early adoption is permitted. The Company adopted the guidance as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements. 3) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820. After the adoption of ASU 2018-13, an entity will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; the valuation processes for Level 3 fair value measurements; The guidance will be effective for the Company beginning January 1, 2020, and interim periods therein. The amendments on changes in unrealized gains and losses should be applied prospectively for only the most recent period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented on their effective date. Early adoption is permitted, and an entity also is permitted to early adopt any removed or modified disclosures on issuance of ASU 2018-13, and delay adoption of the additional disclosures until their effective date. After adopting ASU 2018-13, the Company’s financial statements will include fewer disclosures about fair value measurements; however, the Company does not expect the adoption of ASU 2018-13 to otherwise have a material effect on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): Accounting for Certain Financial Instruments with Down Round Features. The amendments of this ASU update the classification analysis of certain equity-linked financial instruments, or embedded features, with down round features, as well as clarify existing disclosure requirements for equity-classified instruments. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. ASU 2017-11 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted, including adoption in an interim period. ASU 2017-11 provides that upon adoption, an entity may apply this standard retrospectively to outstanding financial instruments with a down round feature by means of a cumulative- effect adjustment to the opening balance of accumulated deficit in the fiscal year and interim period adoption. The Company has early adopted ASU 2017-11 retrospectively. |
Accrued expenses and other (Tab
Accrued expenses and other (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued expenses and other | |
Accrued and other current liabilities | Accrued and other current liabilities consist of the following for the periods indicated (in thousands): September 30, December 31, 2020 2019 Accrued expenses $ 1,361 $ 372 Restructuring accrual 238 2,161 Payroll and related 21 60 Liability for employee rights upon retirement — 262 $ 1,620 $ 2,855 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Restructuring | ||
Schedule of roll forward of the restructuring and other activities | CRO, Facility Manufacturing Severance- and and other related related Leases Total Balance, January 1, 2020 $ 2,572 $ 336 $ — $ 2,908 Expenses 502 — 247 749 Paid or consumed (2,835) (336) (247) (3,138) Balance, September 30, 2020 $ 238 $ — $ — $ 238 | CRO, manufacturing and other Severance- related related Total Expenses 2,979 371 3,350 Paid or utilized (407) (35) (442) December 31, 2019 2,572 336 2,908 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shareholders' Equity | ||
Summary of the activity for the warrants whose fair value measurements are estimated utilizing Level 3 inputs | 2019 Fair value on January 1, 2019 $ 3,628 Adjustments-finance expenses 4,570 Fair value on February 14, 2019 $ 8,198 | 2019 Fair value on January 1, 2019 3,628 Adjustments- finance expenses 4,570 Fair value on February 14, 2019 8,198 |
Summary of assumptions used in valuation of the fair value of the warrants | Derivative Financial Instrument February 14, 2019 January 1, 2019 Share price $ 1.84 $ 2.50 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % | Derivative Financial Instrument February 14, 2019 January 1, 2019 Stock price (USD) $ 1.84 $ 2.5 Expected term End of 2022 End of 2022 Risk free rate 2.49 % 1.37 % Volatility 52 % 48 % |
Summary of Options granted to employees and directors | Year ended December 31, 2019 Award Exercise Vesting amount price range period Expiration Employees $ 0.60 - $ 1.55 4 years Directors 495,000 $ 0.47 - $ 1.03 3 years Year ended December 31, 2018 Award amount Exercise price range Vesting period Expiration Employees 1,379,203 $ 2.94 - $ 4.00 2-4 years Directors 353 NIS 14.73 4 years | |
Summary of assumptions used in valuation of the fair value of the options granted | The fair value of each option granted in the nine months ended September 30, 2019 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2019 Value of ordinary share $1.03 - $1.54 Dividend yield 0% Expected volatility 51.5% - 68.6% Risk-free interest rate 2.2% - 2.5% Expected term (years) 5.5 - 6.9 The fair value of each option granted in the nine months ended September 30, 2020 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Nine months ended September 30, 2020 Value of ordinary share $0.15 - $0.17 Dividend yield 0% Expected volatility 64.9% - 67.4% Risk-free interest rate 0.30% to 0.39% Expected term (years) 5.5 - 6.5 | Year ended December 31 2019 2018 Value of ordinary share $ - $ $ - $ 4.00 Dividend yield — — Expected volatility 51.5%-68.8 % 54.0%-71.8 % Risk-free interest rate 1.7%-2.5 % 1.41%-3.10 % Expected term 4.95-7 years 5.38-7 years |
Summary of outstanding and exercisable options | Weighted Average Weighted Remaining Number of Average Contractual Life in Shares Exercise Price Years Options outstanding - January 1, 2020 3,822,374 $ 2.50 8.5 Granted 885,000 Forfeited/expired/cancelled (1,578,031) Options outstanding - September 30, 2020 3,129,343 $ 2.44 7.9 Options exercisable - September 30, 2020 2,389,840 $ 3.01 7.5 | Employees, directors and consultants Number of options USD (1) Outstanding at December 31, 2017 $ Granted $ Forfeited (90,282) $ 2.69 Expired (54,519) $ 5.22 Exercised (1,750) $ 3.13 Outstanding at December 31, 2018 2,453,767 $ 3.32 Granted 1,593,590 $ 1.03 Forfeited (221,611) $ 1.30 Expired (3,372) $ 13.32 Exercised — — Outstanding at December 31, 2019 3,822,374 $ 2.50 (1) Weighted-average exercise price per ordinary share. NIS-denominated exercise prices were converted to USD using the year-end Bank of Israel representative rate. |
Summary of information concerning outstanding and exercisable options as of December 31, 2019, in terms of ordinary shares | December 31, 2019 Options outstanding Options exercisable Number of Weighted Number of Weighted options Average options Average Exercise outstanding Remaining exercisable Remaining prices per at end of Contractual at end of contractual share (USD) year Life year Life $25-72 6,948 1.98 6,948 1.98 $6-7 14,189 3.90 14,189 3.90 $3-5 1,079,056 8.42 786,513 8.39 $2-3 1,330,452 7.60 824,326 7.30 $1-2 1,336,729 9.48 180,188 9.39 $0-1 55,000 9.87 — — 3,822,374 1,812,164 | |
Summary of the effect of share-based compensation on the statements of operations | Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Research and development $ (290) $ 154 $ (166) $ 438 General and administrative (67) 168 70 632 $ (357) $ 322 $ (96) $ 1,070 | Year ended December 31 2019 2018 Research and development $ 470 $ 275 General and administrative $ 688 $ 1,651 $ 1,158 $ 1,926 |
Net Loss per share (Tables)
Net Loss per share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Net Loss per share | ||
Schedule of share options and warrants were excluded from the calculation of diluted net loss per ordinary share because their effect would have been anti-dilutive for the years presented | September 30 2020 2019 Stock Options 3,129,343 3,985,858 Warrants 10,975,959 10,975,959 | Year ended December 31 2019 2018 Outstanding stock options 3,822,374 2,453,767 Warrants 10,975,959 4,768,629 |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 20, 2020 | Feb. 28, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Restructuring Cost and Reserve [Line Items] | ||||||
Severance expense | $ (3,138) | $ (442) | ||||
Number of ordinary shares represented by each ADS (in shares) | 5 | 5 | ||||
Ordinary shares, par value (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Accumulated deficit | $ 114,900 | $ 114,900 | ||||
Discontinuation of external clinical development | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Discontinuation costs | $ 1,030 | 1,030 | ||||
Severance-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance expense | $ 500 | $ (336) | $ (35) |
Accrued expenses and other (Det
Accrued expenses and other (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued expenses and other | ||
Accrued expenses | $ 1,361 | $ 372 |
Restructuring accrual | 238 | 2,161 |
Payroll and related | 21 | 60 |
Liability for employee rights upon retirement | 262 | |
Total | $ 1,620 | $ 2,855 |
Leases (Details)
Leases (Details) $ in Thousands | May 31, 2018USD ($) | May 31, 2018USD ($) | Jan. 31, 2018USD ($) | Nov. 30, 2013USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 01, 2020ft² |
Leases | ||||||||
Option for extend agreement | 5 years | |||||||
Annual rent including management fees | $ 200 | $ 140 | $ 382 | $ 65 | ||||
Bank guarantees provided to property owner | 113 | $ 18 | ||||||
Restructuring expenses | $ 247 | $ 79 | $ 749 | $ 3,350 | ||||
Area of land | ft² | 2,400 | |||||||
Options to extend the lease | false | true | ||||||
Weighted-average remaining lease term (in years) | 3 years 2 months 12 days | |||||||
Weighted-average discount rate | 3.50% |
License Agreement (Details)
License Agreement (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2019 | |
License Agreement | ||
Upfront fee for license arrangements | $ 3 | $ 3 |
Written notice period for termination of the agreement | 90 days | 90 days |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Restructuring | |||
Beginning balance | $ 2,908 | ||
Expenses | 749 | ||
Paid or consumed | (3,138) | $ (442) | |
Closing balance | $ 238 | 238 | 2,908 |
CRO, manufacturing and other related | |||
Restructuring | |||
Beginning balance | 2,572 | ||
Expenses | 502 | ||
Paid or consumed | (2,835) | (407) | |
Closing balance | 238 | 238 | 2,572 |
Severance-Related | |||
Restructuring | |||
Beginning balance | 336 | ||
Paid or consumed | $ 500 | (336) | (35) |
Closing balance | $ 336 | ||
Facilities and Leases | |||
Restructuring | |||
Expenses | 247 | ||
Paid or consumed | $ (247) |
Research and development (Detai
Research and development (Details) - USD ($) $ in Thousands | Oct. 20, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Restructuring Cost and Reserve [Line Items] | ||||
Severance expense | $ (3,138) | $ (442) | ||
Discontinuation of external clinical development | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Discontinuation costs | $ 1,030 | $ 1,030 | ||
Severance-Related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance expense | $ 500 | $ (336) | $ (35) |
Shareholders' Equity - 2019 Pub
Shareholders' Equity - 2019 Public offering and 2018 Private Placement (Details) $ / shares in Units, $ in Thousands | Feb. 14, 2019USD ($)shares | Feb. 28, 2019shares | Jun. 30, 2018USD ($)$ / sharesshares | Feb. 14, 2019USD ($)shares | Sep. 30, 2020shares | Dec. 31, 2019USD ($)Vote | Dec. 31, 2018USD ($) | Jun. 30, 2018₪ / shares | Jun. 30, 2018$ / shares |
Sale Of Stock [Line Items] | |||||||||
Number of votes per ordinary share | Vote | 1 | ||||||||
Number of ordinary shares represented by each ADS (in shares) | 5 | 5 | |||||||
Threshold percentage for future share issuance price | 42.86% | ||||||||
Finance expenses | $ | $ 4,600 | $ 4,619 | $ 499 | ||||||
2019 Public offering | |||||||||
Sale Of Stock [Line Items] | |||||||||
Initial public offering cost | $ | $ 30,500 | ||||||||
Number of ADSs issued | 2,652,174 | ||||||||
Number of ordinary shares represented by each ADS (in shares) | 5 | ||||||||
Number of ordinary shares issued | 8,262,800 | ||||||||
Number of equivalent ADS for ordinary shares | 1,652,560 | ||||||||
Additional warrants exercisable | 6,207,330 | 6,207,330 | |||||||
Number of equivalent ADS for warrants | 1,241,466 | ||||||||
2018 Private Placement | |||||||||
Sale Of Stock [Line Items] | |||||||||
Number of warrants issued | 2,713,159 | ||||||||
Number of ordinary shares issued | 5,960,787 | ||||||||
Proceeds from issuance of shares | $ | $ 22,900 | ||||||||
Percentage of ordinary shares issued and outstanding after completion of transaction | 38.00% | ||||||||
Share price per share | $ / shares | $ 3.842 | ||||||||
Percentage of additional share issued, to be acquired by warrants. | 80.00% | ||||||||
Warrant exercise price | (per share) | ₪ 16.20 | $ 4.32 | |||||||
Warrants exercisable period | 5 years | ||||||||
Threshold percentage for future share issuance price | 42.86% |
Shareholders' Equity - Warrants
Shareholders' Equity - Warrants activity (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended |
Feb. 14, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the year | $ 3,628 | $ 3,628 |
Adjustments- finance expenses | 4,570 | 4,570 |
Fair value at the end of the year | 8,198 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the year, Adjusted balance | 3,628 | $ 3,628 |
Adjustments- finance expenses | 4,570 | |
Fair value at the end of the year | $ 8,198 |
Shareholders' Equity - Fair Val
Shareholders' Equity - Fair Value assumptions of warrants and 2018 Reverse Split (Details) | 1 Months Ended | |||||
Jun. 30, 2018shares | Sep. 30, 2020shares | Dec. 31, 2019shares | Feb. 14, 2019$ / shares | Jan. 01, 2019$ / shares | Dec. 31, 2018shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Reverse stock split conversion ratio | 10 | |||||
Ordinary shares, shares authorized | shares | 30,000,000 | 500,000,000 | 100,000,000 | 100,000,000 | ||
Stock price (USD) | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 1.84 | 2.50 | ||||
Risk free rate | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 2.49 | 1.37 | ||||
Volatility | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 52 | 48 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Stock price (USD) | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 1.84 | 2.5 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Risk free rate | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 2.49 | 1.37 | ||||
Level 3 | Derivative Financial Instruments - Warrants | Volatility | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Derivative Liability, Measurement Input | 52 | 48 |
Shareholders' Equity - Fair v_2
Shareholders' Equity - Fair value of stock options (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020plan$ / shares | Sep. 30, 2019$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized share-based compensation cost | $ | $ 0.7 | |||
Total unrecognized share-based compensation cost, recognition period | 2 years 7 months 6 days | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term | 4 years 11 months 12 days | 5 years 4 months 17 days | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility, maximum | 68.80% | 71.80% | ||
Risk-free interest rate, maximum | 2.50% | 3.10% | ||
Expected term | 7 years | 7 years | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility, minimum | 51.50% | 54.00% | ||
Risk-free interest rate, minimum | 1.70% | 1.41% | ||
Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.47 | $ 2.93 | ||
Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 1.54 | $ 4 | ||
2011 share option plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 0.00% | 0.00% | ||
Expected volatility, minimum | 64.90% | 51.50% | ||
Expected volatility, maximum | 67.40% | 68.60% | ||
Risk-free interest rate, minimum | 0.30% | 2.20% | ||
Risk-free interest rate, maximum | 0.39% | 2.50% | ||
2011 share option plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.15 | $ 1.03 | ||
Expected term | 5 years 6 months | 5 years 6 months | ||
2011 share option plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of ordinary share | $ 0.17 | $ 1.54 | ||
Expected term | 6 years 6 months | 6 years 10 months 24 days | ||
2011 share option plan | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of share based compensation plans | plan | 2 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of outstanding and exercisable options (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based compensation | |||
Aggregate intrinsic value | $ 0 | ||
Number of options | |||
Outstanding at the beginning | 3,822,374 | ||
Outstanding at the end | 3,822,374 | ||
Options exercisable | 1,812,164 | ||
Consultant | |||
Number of options | |||
Outstanding at the beginning | 3,822,374 | 2,453,767 | 1,220,762 |
Granted | 1,593,590 | 1,379,556 | |
Forfeited | (221,611) | (90,282) | |
Expired | (3,372) | (54,519) | |
Exercised | (1,750) | ||
Outstanding at the end | 3,822,374 | 2,453,767 | |
Weighted Average Exercise Price | |||
Outstanding at the beginning | $ 2.50 | $ 3.32 | $ 3.21 |
Granted | 1.03 | 3.52 | |
Forfeited | 1.30 | 2.69 | |
Expired | 13.32 | 5.22 | |
Exercised | 3.13 | ||
Outstanding at the end | $ 2.50 | $ 3.32 | |
Stock Options | 2011 share option plan | |||
Share-based compensation | |||
Aggregate intrinsic value | $ 0 | ||
Number of options | |||
Outstanding at the beginning | 3,822,374 | ||
Granted | 885,000 | ||
Forfeited | (1,578,031) | ||
Outstanding at the end | 3,129,343 | 3,822,374 | |
Options exercisable | 2,389,840 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning | $ 2.50 | ||
Outstanding at the end | 2.44 | $ 2.50 | |
Options exercisable | $ 3.01 | ||
Weighted Average Remaining Contractual Life in Years | |||
Weighted Average Remaining Contractual Life in Years | 7 years 10 months 24 days | 8 years 6 months | |
Options exercisable | 7 years 6 months |
Shareholders' Equity - Share-ba
Shareholders' Equity - Share-based compensation expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ 1,158 | $ 1,926 | ||||
Research and development expenses | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | 470 | 275 | ||||
General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ 688 | $ 1,651 | ||||
2011 share option plan | Stock Options | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ (357) | $ 322 | $ (96) | $ 1,070 | ||
2011 share option plan | Stock Options | Research and development expenses | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | (290) | 154 | (166) | 438 | ||
2011 share option plan | Stock Options | General and administrative | ||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||||
Share-based compensation expenses | $ (67) | $ 168 | $ 70 | $ 632 |
Net Loss per share - Severance
Net Loss per share - Severance pay and Antidilutive securities (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities | 3,129,343 | 3,985,858 | 3,822,374 | 2,453,767 |
Derivative Financial Instruments - Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities | 10,975,959 | 10,975,959 | 10,975,959 | 4,768,629 |