Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | RedHill Biopharma Ltd. |
Entity Central Index Key | 1,553,846 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 283,686,908 |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
NET REVENUES | $ 8,360 | $ 4,007 | $ 101 |
COST OF REVENUES | 2,837 | 2,126 | |
GROSS PROFIT | 5,523 | 1,881 | 101 |
RESEARCH AND DEVELOPMENT EXPENSES, net | 24,862 | 32,969 | 25,241 |
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES | 12,486 | 12,014 | 1,555 |
GENERAL AND ADMINISTRATIVE EXPENSES | 7,506 | 8,025 | 3,848 |
OTHER EXPENSES | 845 | ||
OPERATING LOSS | 39,331 | 51,972 | 30,543 |
FINANCIAL INCOME | 678 | 6,505 | 1,548 |
FINANCIAL EXPENSES | 167 | 77 | 375 |
FINANCIAL INCOME, net | 511 | 6,428 | 1,173 |
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD | $ 38,820 | $ 45,544 | $ 29,370 |
LOSS PER ORDINARY SHARE (U.S. dollars): | |||
Basic (in dollars per share) | $ 0.17 | $ 0.26 | $ 0.23 |
Diluted (U.S. dollars) | $ 0.17 | $ 0.26 | $ 0.24 |
WEIGHTED AVERAGE OF ORDINARY SHARES (in thousands) | 231,204 | 176,579 | 128,514 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 29,005 | $ 16,455 |
Bank deposits | 8,271 | 13,163 |
Financial assets at fair value through profit or loss | 15,909 | 16,587 |
Trade receivables | 958 | 1,528 |
Prepaid expenses and other receivables | 1,876 | 3,290 |
Inventory | 769 | 653 |
Total current assets | 56,788 | 51,676 |
NON-CURRENT ASSETS: | ||
Bank deposits | 140 | 152 |
Fixed assets | 163 | 230 |
Intangible assets | 5,320 | 5,285 |
Total non-current assets | 5,623 | 5,667 |
TOTAL ASSETS | 62,411 | 57,343 |
CURRENT LIABILITIES: | ||
Accounts payable | 3,324 | 4,805 |
Accrued expenses and other current liabilities | 7,057 | 6,025 |
Payable in respect of intangible asset purchase | 1,000 | |
Total current liabilities | 10,381 | 11,830 |
NON-CURRENT LIABILITIES: | ||
Derivative financial instruments | 344 | 448 |
Royalty obligation | 500 | |
Total non-current liabilities | 844 | 448 |
TOTAL LIABILITIES | 11,225 | 12,278 |
EQUITY: | ||
Ordinary shares | 767 | 575 |
Additional paid-in capital | 219,505 | 177,434 |
Accumulated deficit | (169,086) | (132,944) |
TOTAL EQUITY | 51,186 | 45,065 |
TOTAL LIABILITIES AND EQUITY | $ 62,411 | $ 57,343 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Ordinary shares | Additional paid-in capital | Warrants | Accumulated deficit | Total |
Balance at beginning of period at Dec. 31, 2015 | $ 343 | $ 120,621 | $ 1,057 | $ (61,944) | $ 60,077 |
Share-based compensation to employees and service providers | 1,679 | 1,679 | |||
Issuance of ordinary shares, net of expenses | 96 | 29,956 | 30,052 | ||
Exercise of warrants and options into ordinary shares | 2 | 261 | 263 | ||
Comprehensive loss | (29,370) | (29,370) | |||
Balance at end of period at Dec. 31, 2016 | 441 | 150,838 | 1,057 | (89,635) | 62,701 |
Share-based compensation to employees and service providers | 2,235 | 2,235 | |||
Issuance of ordinary shares, net of expenses | 119 | 22,097 | 22,216 | ||
Exercise of warrants and options into ordinary shares | 15 | 3,442 | 3,457 | ||
Warrants expiration | 1,057 | $ (1,057) | |||
Comprehensive loss | (45,544) | (45,544) | |||
Balance at end of period at Dec. 31, 2017 | 575 | 177,434 | (132,944) | 45,065 | |
Share-based compensation to employees and service providers | 2,678 | 2,678 | |||
Issuance of ordinary shares, net of expenses | 190 | 41,712 | 41,902 | ||
Exercise of warrants and options into ordinary shares | 2 | 359 | 361 | ||
Comprehensive loss | (38,820) | (38,820) | |||
Balance at end of period at Dec. 31, 2018 | $ 767 | $ 219,505 | $ (169,086) | $ 51,186 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||
Comprehensive loss | $ (38,820) | $ (45,544) | $ (29,370) |
Adjustments in respect of income and expenses not involving cash flow: | |||
Share-based compensation to employees and service providers | 2,678 | 2,235 | 1,679 |
Depreciation | 90 | 81 | 44 |
Write-off of intangible assets | 845 | ||
Fair value adjustment on derivative financial instruments | (104) | (5,687) | (1,152) |
Fair value losses (gains) on financial assets at fair value through profit or loss | 137 | 127 | (67) |
Revaluation of bank deposits | 35 | (123) | (274) |
Issuance cost in respect of warrants | 368 | ||
Exchange differences in respect of cash and cash equivalents | 103 | (367) | (39) |
Total adjustments in respect of income and expenses not involving cash flow | 2,939 | (2,889) | 559 |
Changes in assets and liability items: | |||
Decrease (increase) in trade receivables | 570 | (1,429) | 99 |
Decrease (increase) in prepaid expenses and other receivables | 1,414 | (1,728) | 612 |
Decrease (increase) in inventory | (116) | (653) | |
Increase (decrease) in accounts payable | (1,481) | 4,745 | (60) |
Increase (decrease) in accrued expenses and other current liabilities | 1,032 | 2,729 | (98) |
Total changes in assets and liability items | 1,419 | 3,664 | 553 |
Net cash used in operating activities | (34,462) | (44,769) | (28,258) |
INVESTING ACTIVITIES: | |||
Purchase of fixed assets | (23) | (146) | (85) |
Purchase of intangible assets | (35) | (1,035) | (35) |
Change in investment in current bank deposits | 4,869 | (13,000) | 36,838 |
Purchase of financial assets at fair value through profit or loss | (6,976) | (21,923) | (12,246) |
Proceeds from sale of financial assets at fair value through profit or loss | 7,517 | 17,522 | |
Net cash provided by (used in) investing activities | 5,352 | (18,582) | 24,472 |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of ordinary shares, net of expenses | 41,902 | 22,216 | 35,754 |
Exercise of warrants and options into ordinary shares, net of expenses | 361 | 3,437 | 263 |
Repayment of payable in respect of intangible asset purchase | (500) | ||
Net cash provided by financing activities | 41,763 | 25,653 | 36,017 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 12,653 | (37,698) | 32,231 |
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | (103) | 367 | 39 |
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 16,455 | 53,786 | 21,516 |
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | 29,005 | 16,455 | 53,786 |
SUPPLEMENTARY INFORMATION ON INTEREST RECEIVED IN CASH | $ 728 | $ 469 | $ 408 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2018 | |
GENERAL | |
GENERAL | NOTE 1 - GENERAL: a. General 1) RedHill Biopharma Ltd. (the “Company”), incorporated in Israel on August 3, 2009, together with its wholly-owned subsidiary RedHill Biopharma Inc. (the “Company’s subsidiary”), incorporated in Delaware, U.S. on January 19, 2017, is a specialty biopharmaceutical company, primarily focused on late-stage clinical development and commercialization of proprietary drugs for gastrointestinal (“GI”) diseases. The Company is primarily engaged in the research and development of its therapeutic candidates and, since January 2017, has pursued its commercial activities in the U.S. through the Company’s subsidiary. In February 2011, the Company listed its securities on the Tel-Aviv Stock Exchange (“TASE”) and from December 2012 through July 2018, the Company’s American Depositary Shares (“ADSs”) were listed on the NASDAQ Capital Market. Since July 2018, the Company’s ADSs have been listed on the NASDAQ Global Market (“NASDAQ”). The Company’s registered address is 21 Ha’arba’a St, Tel-Aviv, Israel. 2) U.S. rights to commercialize and co-promote In April 2017, the Company signed an exclusive license agreement with a privately held U.S. company, granting the Company certain commercialization rights to commercialize EnteraGam®. Under the license agreement, the Company is required to pay royalties based on net sales, as provided in the agreement. The initial term of the agreement is four years. See also note 2o(2). In December 2016, the Company entered into an agreement with an international specialty pharmaceutical company, granting the Company certain rights to promote Donnatal ® in certain U.S. territories. In addition, in August 2017 and June 2018, the Company entered into agreements with U.S. companies, granting the Company certain rights to promote Esomeprazole Strontium Delayed-Release Capsules 49.3 mg and Mytesi ® , respectively, in certain U.S. territories . According to these agreements, fees are paid to the Company based on units sold of the products during each period. The initial terms of the agreements are between a year and a half and four years. See also note 2o(1). 3) To date the Company has out-licensed on an exclusive worldwide basis only one of its therapeutic candidates and has generated limited revenues from its commercial activities. Accordingly, there is no assurance that the Company’s business will generate sustainable positive cash flows. Through December 31, 2018, the Company has an accumulated deficit, and its activities have been funded primarily through public and private offerings of the Company’s securities. The Company plans to further fund its future operations through commercialization and out-licensing of its therapeutic candidates, commercialization of in-licensed or acquired products and raising additional capital through equity or debt financing or through non-dilutive financing. The Company’s current cash resources are not sufficient to complete the research and development of all of the Company’s therapeutic candidates and to fully support its commercial operations until generation of sustainable positive cash flows. Management expects that the Company will incur additional losses as it continues to focus its resources on advancing the development of its therapeutic candidates, as well as advancing its commercial operations, based on a prioritized plan that will result in negative cash flows from operating activities. The Company believes its existing capital resources should be sufficient to fund its current and planned operations for at least the next 12 months. If the Company is unable to out-license, sell or commercialize its therapeutic candidates, generate sufficient and sustainable revenues from its commercial operations, or obtain future financing, the Company may be forced to delay, reduce the scope of, or eliminate one or more of its research and development or commercialization programs, any of which may have a material adverse effect on the Company’s business, financial condition or results of operations. b. Approval of financial statements These financial statements were approved by the Board of Directors on February 25, 2019. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES : a. Basis for presentation of the financial statements The consolidated financial statements of the Company as of December 31, 2018 and 2017 and for each of the three years for the period ended on December 31, 2018 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The significant accounting policies described below have been applied consistently in relation to all the periods presented, unless otherwise stated. The consolidated financial statements have been prepared under the historical cost convention, subject to adjustments in respect of revaluation of financial assets and financial liabilities at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Actual results could differ significantly from those estimates and assumptions. b. Translation of foreign currency transactions and balances 1) Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Company and its subsidiary operate (the “Functional Currency”). The consolidated financial statements are presented in U.S. dollars (“$”), which is the Company’s functional and presentation currency. 2) Transactions and balances Foreign currency transactions in currencies different from the Functional Currency (hereafter foreign currency, mostly New Israeli Shekel (“NIS”)) are translated into the Functional Currency using the exchange rates at the dates of the transactions. Foreign exchange differences resulting from the settlement of such transactions and from the translation of period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recorded in the Statements of Comprehensive Loss under Financing Income or Financial Expenses. c. Principles of consolidation Commencing 2017, the Company’s consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions have been eliminated upon consolidation. d. Cash and cash equivalents Cash and cash equivalents include cash on hand and unrestricted short-term bank deposits with maturities of three months or less. e. Trade receivables Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components. Subsequent to the initial recognition, they are measured at amortized cost using the effective interest rate method, less any impairment loss. f. Inventory The Company’s inventory represents items held for sale in the ordinary course of business, in the process of production for a sale in the ordinary course of business or materials or supplies to be used in the production process, to the extent they are recoverable. The inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company continually evaluates inventory for potential loss due to excess quantity or obsolete or slow-moving inventory by comparing sales history and sales projections to the inventory on hand. When evidence indicates that the carrying value of a product may not be recoverable, a charge is recorded to reduce the inventory to its current net realizable value. g. Fixed assets Fixed asset items are initially recognized at acquisition cost. Fixed assets items are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method, to reduce the cost of fixed assets to their residual value over their estimated useful lives as follows: % Computer equipment 33 Office furniture and equipment 8-15 Leasehold improvements are depreciated by the straight-line method over the shorter of the term of the lease or the estimated useful life of the improvements. h. Research and development 1) Research and development assets acquired by the Company, the development of which has not yet been completed, are stated at cost and are not amortized. These assets are tested for impairment once a year. At the time these assets will be available for use, they will be amortized by the straight-line method over their useful lives. 2) Research and development expenses are charged to profit or loss as incurred. An intangible asset arising from the development of the Company’s therapeutic candidates is recognized if all of the following conditions are met: · it is technically feasible to complete the intangible asset so that it will be available for use; · management intends to complete the intangible asset and use it or sell it; · there is an ability to use or sell the intangible asset; · it can be demonstrated how the intangible asset will generate probable future economic benefits; and · adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available and costs associated with the intangible asset during development can be measured reliably. Other development costs that do not meet the above criteria are recognized as expenses as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. As of December 31, 2018, the Company had not yet capitalized any development costs. 3) Amounts paid to purchase intellectual property of therapeutic candidates are capitalized and recorded as intangible assets. Amounts due for future payment based on contractual agreements are accrued upon reaching the relevant milestones. 4) Research and development costs for the performance of pre-clinical trials, clinical trials and manufacturing by subcontractors are recognized as expenses when incurred. i. Impairment of non-financial assets Depreciable assets are tested for impairment if any events have occurred or changes in circumstances have taken place which might indicate that their carrying amounts may not be recoverable. Research and development assets, the development of which has not yet been completed, are not amortized and are tested for impairment on an annual basis. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Nonfinancial assets that were subject to impairment are reviewed for possible reversal of the impairment recognized in respect thereof at each date of Statements of Financial Position. j. Financial assets As of January 1, 2018, the Company adopted IFRS 9 “Financial Instruments” . 1) Classification The financial assets of the Company are classified into the following categories: financial assets at fair value through profit or loss, and financial assets at amortized cost. The classification is done on the basis of the Company’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. a) Financial assets at amortized cost Financial assets at amortized cost are assets held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are included in current assets, except for those with maturities greater than 12 months after the statements of financial position date (for which they are classified as noncurrent assets). Financial assets at amortized cost of the Company are included in trade receivables, other receivables and bank deposits in the Statements of Financial Position. b) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss of the Company are assets not measured at amortized cost in accordance with (1)(a) above. Assets in this category are classified as current assets if they are expected to be settled within 12 months; otherwise, they are classified as noncurrent. 2) Recognition and measurement Regular purchases and sales of financial assets are recognized on the settlement date, which is the date on which the asset is delivered to the Company or delivered by the Company. Investments are initially recognized at fair value plus transaction costs for all financial assets not recorded at fair value through profit or loss, except for trade receivables, that are recognized initially at the amount of consideration that is unconditional unless they contain significant financing components. Financial assets measured at fair value through profit or loss are initially recognized at fair value, related transaction costs are expensed to profit or loss. Financial assets are derecognized when the rights to receive cash flow from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently recorded at fair value. Financial assets at amortized cost are measured in subsequent periods at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Statement of Comprehensive Loss under “Financial Expenses (Income), net”. 3) Impairment The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost. At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. If the financial instrument is determined to have low credit risk at the reporting date, the Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition. The Company measures the loss allowance for expected credit losses on trade receivables that are within the scope of IFRS 15 and on financial instruments for which the credit risk has increased significantly since initial recognition based on lifetime expected credit losses. Otherwise, the Company measures the loss allowance at an amount equal to 12-month expected credit losses at the current reporting date. Prior to the effective date and adoption of IFRS 9, the financial assets of the Company were classified into the following categories: financial assets at fair value through profit or loss, and loans and receivables. The classification depended on the purpose for which the financial assets were acquired, also, prior to the adoption of IFRS 9, the Company assessed at December 31, 2017 whether there is any objective evidence that a financial asset or group of financial assets was impaired. k. Financial liabilities Financial liabilities are initially recognized at their fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Financial liabilities are subsequently measured at amortized cost, except for derivative financial instruments, which are subsequently measured at fair value through profit or loss. Financial liabilities are classified as current liabilities if payment is due within one year or less, otherwise they are classified as non-current liabilities. The Company’s financial liabilities at amortized cost are included in accounts payable, accrued expenses and other current liabilities and payable in respect of intangible asset. The derivative financial instruments represent warrants that confer the right to net share settlement. The Company removes a financial liability (or a part of a financial liability) from its Statement of Financial Position when, and only when, it is extinguished (when the obligation specified in the contract is discharged, canceled or expired). The Company accounts for a substantial modification of the terms of an existing financial liability or a part of it as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss. l. Share capital The Company’s ordinary shares are classified as the Company’s share capital. Incremental costs directly attributed to the issuance of new shares or warrants are presented under equity as a deduction from the proceeds of issuance. m. Employee benefits 1) Pension and retirement benefit obligations In any matter related to payment of pension and severance pay to employees in Israel to be dismissed or to retire from the Company, the Company operates in accordance with labor laws. Labor laws and agreements in Israel as well as the Company’s practice, require the Company to pay severance pay and/or pensions to employees dismissed or retired, in certain circumstances. The Company has a severance pay plan in accordance with Section 14 of the Israeli Severance Pay Law which is treated as a defined contribution plan. According to the plan, the Company regularly makes payments to severance pay or pension funds without having a legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay the related payments to employees’ service in current and prior periods. Contributions for severance pay or pension are recognized as employee benefit expenses when they are due commensurate with receipt of work services from the employee, and no further provision is required in the financial statements. The Company’s subsidiary provides, at will, benefit contributions for its employees. 2) Vacation and recreation pay Under Israeli law, each employee in Israel is entitled to vacation days and recreation pay, both computed on an annual basis. This entitlement is based on the period of employment. The Company records expenses and liability for vacation and recreation pay based on the benefit accumulated by each employee. n. Share-based payments The Company operates several equity-settled, share-based compensation plans to employees (as defined in IFRS 2 “Share-Based Payments”) and service providers. As part of the plans, the Company grants employees and service providers, from time to time and at its discretion, options to purchase Company shares. The fair value of the employee and service provider services received in exchange for the grant of the options is recognized as an expense in profit or loss and is recorded as accumulated deficit within equity. The total amount recognized as an expense over the vesting period of the options (the period during which all vesting conditions are expected to be met) is determined by reference to the fair value of the options granted at the date of grant. Vesting conditions are included in the assumptions about the number of options that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to accumulated deficit. When exercising options, the Company issues new shares. The proceeds, less direct attributable transaction costs, are recognized as share capital (par value) and share premium. o. Revenue from contracts with customers As of January 1, 2017, the Company early adopted IFRS 15, with full retrospective application. The adoption of IFRS 15 did not have an effect on either revenue recognized in prior periods, nor to accumulated deficit as of January 1, 2015. IFRS 15 introduces a five-step model for recognizing revenue from contracts with customers, as follows: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to the performance obligations in the contract; and · recognize revenue when (or as) the entity satisfies a performance obligation. 1) Revenues from promotional services The Company recognizes revenue from promotional services as it satisfies its performance obligation over time, in an amount equal to the consideration to which it expects to be entitled to, taking into consideration the constraint on variable considerations stipulated in IFRS 15. 2) Revenues from the sale of products Principal versus agent considerations: When a third party is involved in providing goods or services to a customer, the Company analyzes whether the Company acts as a principal or an agent in the transaction, based on whether the Company obtains control of the product before it is transferred to the customer, using the indicators provided in IFRS 15. In connection with the commercialization of EnteraGam ® , the Company is determined to be the principal in the arrangement, rather than an agent of Entera Health Inc. (“Entera Health”), since the Company controls the product before transferring it to a customer. Therefore, revenue in the amount the Company is entitled to receive from its customers is recognized on a gross basis, from which royalties payable to Entera Health are accounted for in cost of revenues. The Company recognizes revenues from the sale of EnteraGam ® at a point in time when control over the product is transferred to customers (upon delivery). The transaction price in these arrangements is the consideration to which the Company expects to be entitled from the customer, reduced by estimates of rebates, discounts, allowances and provision for product returns, given or expected to be given, which vary by product arrangement and buying groups. The Company estimates its variable consideration using the most likely amount method using actual in-market data received pre- and post- end of the accounting period and are applied to inventory held at wholesalers and pharmacies. The Company will continue to refine these estimates and methodologies over time as the breadth of in-market data increases. 3) Revenues from out-licensing of the Company's therapeutic candidates Revenue incurred in connection with the out-licensing of a right to use the Company’s intellectual property is recognized at a point in time when control over the license is transferred to the licensee. The transaction price contains variable considerations contingent upon the licensee achieving certain milestones, as well as sales-based royalties, in accordance with the relevant agreement. Variable payments, contingent on achieving additional milestones, are included in the transaction price based on most likely amount method. Amounts included in the transaction price are recognized only when it is highly probable that a significant reversal of cumulative revenues will not occur, usually upon achievement of a specific milestone, in accordance with the relevant agreement. Sales-based royalties are not included in the transaction price; rather they are recognized as the related sale occurs, due to the specific exception for sales-based royalties in licensing of intellectual property. 4) Practical expedients and exemptions The Company expenses sales commissions when incurred since the amortization period of the asset that the Company otherwise would have recognized would have been for less than one year. These costs are recorded as selling and marketing expenses. p. Advertising and promotional expenses Advertising and promotional costs include, among others, distribution of free samples of the commercialized products. These costs are recognized as an expense when incurred. q. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statements of Comprehensive Loss on a straight-line basis over the period of the lease. r. Loss per ordinary share The computation of basic loss per share is based on the Company’s loss divided by the weighted average number of ordinary shares outstanding during the period. In calculating the diluted loss per share, the Company adds the weighted average of the number of shares to be issued to the average number of shares outstanding used to calculate the basic loss per share, assuming all shares that have a potentially dilutive effect have been exercised into shares. s. Deferred taxes Deferred income tax is recognized using the liability method for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in these financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the date of the Statements of Financial Position and are expected to apply when the related deferred income tax asset will be realized, or the deferred income tax liability will be settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Since the Company is unable to assess whether it will have taxable income in the foreseeable future, no deferred tax assets were recorded in these financial statements. t. Standards and interpretations to existing standards that are not yet in effect and have not been early adopted by the Company International Financial Reporting Standard No. 16 “Leases” (hereafter - IFRS 16) IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet by lessees, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases. The Company has reviewed all of the Company’s and its subsidiary’s leasing arrangements over the last year in light of the new lease accounting rules in IFRS 16. The standard will affect primarily the accounting for the Company’s operating leases. As at the reporting date, the Company has non-cancellable operating lease commitments of $1.8 million, see note 13b. The Company expects to recognize right-of-use assets and lease liabilities of approximately $1.7 million on January 1, 2019. The Company will apply the standard from its mandatory adoption date of January 1, 2019. The Company intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption. The Company expects that net loss will increase by an immaterial amount for 2019 as a result of adopting the new rules. Operating cash flows for 2019 will increase, and financing cash flows will decrease by approximately $0.9 million as repayment of the principal portion of the lease liabilities will be classified as cash flows from financing activities. |
CRITICAL ACCOUNTING ESTIMATES A
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | 12 Months Ended |
Dec. 31, 2018 | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS: Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes judgments, estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The material judgments, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the following financial year, are with respect to impairment of intangible assets. The Company reviews once a year or when indications of impairment are present, whether research and development related assets are to be impaired. See note 2i. The Company makes judgments to determine whether indications are present that require reviewing impairment of these intangible assets. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amounts of each asset are based on the Company’s estimates as to the development of the therapeutic candidates, changes in the potential market, market competition and timetables for regulatory approvals. |
FINANCIAL INSTRUMENTS AND FINAN
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT: Financial risk management: 1) Financial risk factors The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and price risks), credit and interest risks, and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s results of operations and financial position. Risk management is performed by the Chief Financial Officer of the Company who identifies and evaluates financial risks in close cooperation with the Company’s Chief Executive Officer. The Company’s finance department is responsible for carrying out financial risk management activities in accordance with policies approved by its board of directors (the “Board of Directors”). The Board of Directors provides general guidelines for overall financial risk management as well as policies dealing with specific areas, such as exchange rate risk, interest rate risk, credit risk, use of financial instruments and investment of excess cash. In order to minimize market risk and credit risk, the Company has invested the majority of its cash balances in low-risk investments, such as (i) highly-rated bank deposits with terms of up to one-year term with exit points and (ii) a managed portfolio of selected corporate bonds comprised of a diversified mix of highly-rated bonds. No more than 10% of the total value of the Company’s corporate bonds portfolio is invested in a single bond issuer. (a) Market risks The Company might be exposed to foreign exchange risk as a result of its payments to employees and service providers and investment of some liquidity in currencies other than the U.S. dollar (i.e., the Functional Currency). The Company manages the foreign exchange risk by aligning the currencies for holding liquidity with the currencies of expected expenses, based on the expected cash flows of the Company. Had the Functional Currency of the Company been stronger by 5% against the NIS, assuming all other variables remained constant, the Company would have recognized an additional expense of $58,,000 $56,000 and $78,000 in profit or loss for the years ended, December 31, 2018, 2017 and 2016, respectively. The foreign exchange risks associated with these balances are immaterial. (b) Credit and interest risks Credit and interest risks arise from cash and cash equivalents, deposits with banks, financial assets at fair value through profit or loss, as well as receivables. A substantial portion of liquid instruments of the Company is invested in short-term deposits or corporate bonds in highly-rated banks. The Company estimates that since the liquid instruments are mainly invested for the short term and with highly-rated institutions, the credit and interest risks associated with these balances are low. Credit risk is the risk that customers may fail to pay their debts. The Company manages credit risk by setting credit limits, performing controls and monitoring qualitative and quantitative indicators of trade receivable balances such as the period of credit taken and overdue payments. Customer credit risk also arises as a result of the concentration of the Company’s revenues with its largest customers. See also note 23b. (c) Liquidity risk Prudent liquidity risk management requires maintaining sufficient cash or the availability of funding through an adequate amount of committed credit facilities. Management monitors rolling forecasts of the Company’s liquidity reserve (comprising of cash and cash equivalents, deposits and financial assets through profit or loss). This is generally carried out based on the expected cash flow in accordance with practice and limits set by the management of the Company. As of December 31, 2018, the Company has generated revenues from commercialization and promotional activities; however, and as no sufficient revenue from the commercial operations was generated to compensate for operating expenses and as sales, royalties or commercialization revenues from the therapeutic candidates have not yet been generated, the Company is exposed to liquidity risk. As of December 31, 2018, the Company’s non-derivative financial liabilities, include accounts payable, accrued expenses, and other current liabilities for a period of less than 1 year. 2) Capital risk management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders, maintain optimal capital structure, and to reduce the cost of capital. 3) Fair value estimation The following is an analysis of financial instruments measured at fair value using valuation methods. The different levels have been defined as follows: · quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1); · inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and · inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3) The fair value of financial instruments traded in active markets is based on quoted market prices at dates of the Statements of Financial Position. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. These instruments are included in level 1. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to determine the fair value of an instrument are observable, then the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. The following table presents Company assets and liabilities measured at fair value: Level 1 Level 3 Total U.S. dollars in thousands December 31, 2018: Assets - Financial assets at fair value through profit or loss 15,909 — 15,909 Liabilities - Derivative financial instruments — 344 344 December 31, 2017: Assets - Financial assets at fair value through profit or loss 16,587 — 16,587 Liabilities - Derivative financial instruments — 448 448 The following table presents the change in derivative liabilities measured at level 3 for the years ended December 31, 2018 and 2017: Derivative financial instruments Year Ended December 31, 2018 2017 U.S. dollars in thousands Balance at beginning of the year 448 6,155 Exercise of derivative into shares — (20) Fair value adjustments recognized in profit or loss (104) (5,687) Balance at end of the year 344 448 The fair value of the above-mentioned derivative financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. For more information regarding the derivative financial instruments, see note 16. |
CASH, CASH EQUIVALENTS AND BANK
CASH, CASH EQUIVALENTS AND BANK DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
CASH, CASH EQUIVALENTS AND BANK DEPOSITS | |
CASH, CASH EQUIVALENTS AND BANK DEPOSITS | NOTE 5 – CASH, CASH EQUIVALENTS AND BANK DEPOSITS: a. Cash and cash equivalents December 31, 2018 2017 U.S. dollars in thousands Cash in bank 7,736 8,305 Short-term bank deposits 21,269 8,150 29,005 16,455 The carrying amounts of the cash and cash equivalents approximate their fair values. b. Bank deposits The bank deposits include deposits invested for terms of three months to one year and bear interest at an average annual rate of 2.03%. |
FINANCIAL ASSETS AT FAIR VALUE
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS. | |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS | NOTE 6 - FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS: These financial assets as of December 31, 2018 represent a portfolio of marketable debt securities. The Company’s business model regarding this portfolio is to realize cash flows through the sale of its assets, rather than hold these assets to collect their contractual cash flows or both to collect contractual cash flows and to sell these financial assets. The Company is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. Therefore, this portfolio is classified as financial assets at fair value through profit or loss. The fair value of the securities is based on their exchange market price at the end of each trading day and reporting period. |
PREPAID EXPENSES AND OTHER RECE
PREPAID EXPENSES AND OTHER RECEIVABLES | 12 Months Ended |
Dec. 31, 2018 | |
PREPAID EXPENSES AND OTHER RECEIVABLES | |
PREPAID EXPENSES AND OTHER RECEIVABLES | NOTE 7 - PREPAID EXPENSES AND OTHER RECEIVABLES: December 31, 2018 2017 U.S. dollars in thousands Advance to suppliers 1,319 2,426 Discount from service provider 241 537 Prepaid expenses 120 130 Government institutions 196 197 1,876 3,290 The fair value of other receivables, which constitute of financial assets, approximates their carrying amount. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORY | |
INVENTORY | NOTE 8 - INVENTORY: December 31, 2018 2017 U.S. dollars in thousands Raw materials 507 — Finished goods 262 653 769 653 During the years ended December 31, 2018 and 2017, the Company recognized amounts of $1 million and $0.8 million, respectively, in inventory cost as part of cost of revenues. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
FIXED ASSETS | |
FIXED ASSETS | NOTE 9- FIXED ASSETS: The composition of assets and accumulated depreciation grouped by major classifications: Cost Accumulated depreciation Depreciated balance December 31 December 31 December 31 2018 2017 2018 2017 2018 2017 U.S. dollars in thousands Office furniture and equipment (including computers) 372 349 235 163 137 186 Leasehold improvements 132 132 106 88 26 44 504 481 341 251 163 230 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 10 - INTANGIBLE ASSETS: The intangible assets represent R&D assets with respect to intellectual property rights of the therapeutic candidates purchased by the Company under licensing agreements or under asset acquisition agreements. The changes in those assets are as follows: Year Ended December 31, 2018 2017 U.S. dollars in thousands Cost: Balance at beginning of year 5,285 6,195 Additions during the year 35 35 Deductions during the year — (945) Balance at end of year 5,320 5,285 In February 2017, the Company deducted from the intangible assets cost an amount of $100,000, written off in prior years, due to final termination notice provided to a Danish company for the exclusive rights to a non-core therapeutic candidate that was intended to treat congestive heart failure, left atrium dysfunction and high blood pressure. In February 2017, the Company recognized a loss in the amount of $45,000 paid to a private German company for the exclusive option to acquire rights to an oncology therapeutic candidate. As the Company did not exercise or extend its option to acquire these rights, the entire amount was deducted from the intangible assets’ cost and recorded as a loss in the Consolidated Statement of Comprehensive Loss under Other Expenses. In December 2017, the Company recognized a loss in the amount of $800,000, paid to a Canadian company for the exclusive rights to a non-core migraine therapeutic candidate. Given the Company’s increasing focus on GI diseases, in particular its two key Phase 3 GI programs, a termination notice was issued to the Canadian company and the entire amount was deducted from the intangible assets cost and recorded as a loss in the Consolidated Statement of Comprehensive Loss under Other Expenses. For further details regarding the intangible assets, see note 13. |
LIABILITY FOR EMPLOYEE RIGHTS U
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | 12 Months Ended |
Dec. 31, 2018 | |
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | |
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | NOTE 11 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT: a. Labor laws and agreements in Israel require the Company to pay severance pay and/or pensions to an employee dismissed or retiring from their employment in certain circumstances. b. The Company’s pension liability and the Company’s liability for payment of severance pay for employees in Israel for whom the liability is within the scope of Section 14 of the Severance Pay Law, is covered by ongoing deposits with defined contribution plans. The amounts deposited are not included in the Statements of Financial Position. The amounts charged as an expense with respect to defined contribution plans in 2018, 2017 and 2016 were $182,000, $155,000 and $121,000, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 12 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES: December 31, 2018 2017 U.S. dollars in thousands Accrued expenses 5,599 4,969 Employees and related liabilities 1,380 1,045 Government institutions 78 11 7,057 6,025 The fair value of the accounts payable and accrued expense balances approximates their carrying amounts. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS | |
COMMITMENTS | NOTE 13 - COMMITMENTS: a. Agreements to purchase intellectual property 1) On August 11, 2010, the Company entered into an agreement with private Australian company in an asset purchase agreement to acquire intellectual property relating to three therapeutic candidates for the treatment of gastrointestinal conditions. Pursuant to the asset purchase agreement, as amended, the Company paid the Australian company an initial amount of $500,000 and undertook to pay future payments in the range of 7% - 20% from the Company’s revenues that may be generated from the sale and sublicense of the therapeutic candidates, less certain deductible amounts, as detailed in the agreement. Such potential payments are due until termination or expiration of the last of the patents transferred to the Company pursuant to the agreement (each on a product-by-product basis). In 2014, the Company entered into a licensing agreement with Salix Pharmaceuticals, Ltd., which was later acquired by Valeant Pharmaceuticals International, Inc. and subsequently renamed to Bausch Health Companies Inc. (“Bausch Health”) , pursuant to which Bausch Health licensed from the Company the exclusive worldwide rights to one of the above-mentioned therapeutic candidates. Under the license agreement, Bausch Health paid an upfront payment of $7 million with subsequent potential milestone payments up to a total of $5 million. In March 2018, the 2014 license agreement was amended, among other things, to increase the lower end of the range of potential royalty payments to be paid to the Company on net sales from low single digits to high single digits, such that the total potential royalties payments will range from high single digits up to low double digits. Following the execution of the 2014 license agreement, the Company recognized revenues in 2014 in the amount of the upfront payment and subsequently paid the Australian company an additional amount of $1 million. The additional amount paid was recognized as cost of revenues in the Statement of Comprehensive Loss. Through December 31, 2018, the Company has paid the Australian company in total $1.5 million, as mentioned above. 2) On June 30, 2014, the Company entered into an agreement with a German publicly-traded company that granted the Company the exclusive worldwide (excluding China, Hong Kong, Taiwan and Macao) development and commercialization rights to all indications to a therapeutic candidate. Under the terms of the agreement, the Company paid the German company an upfront payment of $1 million and agreed to pay the German company potential tiered royalties, less certain deductible amounts as detailed in the agreement, ranging from mid-teens and up to 30%. Such potential royalties are due until the later of (i) the expiration of the last to expire licensed patent that covers the product in the relevant country and (ii) the expiration of regulatory exclusivity in the relevant country. Through December 31, 2018, the Company has paid the German company only the initial amount mentioned above. 3) Following an amendment to the agreement from February 2018, during December 2018 the Company elected to convert the current payment of the remaining $0.5 million into increased future potential royalty payments. As of December 31, 2018, the Company recognized an amount of $0.5 million as a non-current liability with respect to the increase in potential royalty payments. b. Operating lease agreements The Company and its subsidiary lease offices and vehicles under non-cancellable operating leases expiring within two to five years. The office and vehicle obligations are payable as follows: December 31, 2018 U.S. dollars in thousands Less than 1 year 994 2-5 years 853 1,847 As of December 31, 2018, an amount of $140,000 was deposited with a bank to secure the lease obligations. In January 2019, the Company signed an amendment to its Israeli office lease agreement. According to the amendment, the Company obliged to lease the offices through January 31, 2026 for an annual lease amount of approximately $0.4 million. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2018 | |
INCOME TAX | |
INCOME TAX | NOTE 14 - INCOME TAX: a. Taxation of the Company in Israel 1) Measurement of results for tax purposes The Company elected to compute its taxable income in accordance with Income Tax Regulations (Rules for Accounting for Foreign Investors Companies and Certain Partnerships and Setting their Taxable Income), 1986. Accordingly, the Company’s taxable income or loss is calculated in U.S. dollars. The results of the Company are measured for tax purposes in accordance with Accounting Principles Generally Accepted in Israel (Israeli GAAP). These financial statements are prepared in accordance with IFRS. The differences between IFRS and Israeli GAAP, both on an annual and a cumulative basis cause differences between taxable results and the results reflected in these financial statements. 2) Tax rates The net income of the Company is subject to the Israeli corporate tax rate. Israeli corporate tax rates for 2018, 2017 and 2016 were 23%, 24% and 25%, respectively. b. U.S. subsidiary The Company’s subsidiary is incorporated in the U.S and is taxed under U.S. tax laws. The applicable corporate tax rate in 2017 was 34%. On December 22, 2017, the Tax Cuts and Jobs Act (the “2017 Act”) was enacted and the applicable tax rate was reduced to 21% from 2018 and thereafter. As a general rule, inter-company transactions between the Israel-resident Company and its U.S-resident subsidiary are subject to the reporting provisions of the Income Tax Regulations, section 85-A, 2006. c . Carry forward losses As of December 31, 2018, the Company had net operating losses carried forward (“NOLs”) of approximately $135 million. Under Israeli tax laws, carry forward tax losses have no expiration date. As of December 31, 2018, the U.S. subsidiary had net operating losses carried forward of approximately $18 million, of which approximately $10 million which expires in 2037, and approximately $8 million which does not expire, but is limited to offset 80% of the net income in the year it is utilized. Under U.S. tax laws, for NOLs arising after December 31, 2017, the 2017 Act limits a taxpayer’s ability to utilize NOL carryforwards to 80% of taxable income. In addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is generally prohibited. NOLs generated in tax years beginning before January 1, 2018 will not be subject to the foregoing taxable income limitation and will continue to have a two-year carryback and twenty-year carryforward period. Deferred tax assets on losses for tax purposes carried forward to subsequent years are recognized if utilization of the related tax benefit against a future taxable income is expected. The Company has not created deferred taxes on its carryforward losses since their utilization is not expected in the foreseeable future. d . Deductible temporary differences The amount of cumulative deductible temporary differences, other than carryforward losses (as mentioned in c. above), for which deferred tax assets have not been recognized in the Statements of Financial Position as of December 31, 2018 and 2017, were $27 million and $28 million, respectively. These temporary differences have no expiration dates. e . Tax assessments The Company has not been assessed for tax purposes since its incorporation. The Company’s tax assessments for 2013 are therefore considered final. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
EQUITY | |
EQUITY | NOTE 15 - EQUITY: a. Share capital 1) Composition Company share capital is composed of ordinary shares of NIS 0.01 par value, as follows: Number of shares December 31, 2018 2017 In thousands Authorized 600,000 300,000 Issued and paid 283,687 212,729 The Company’s ordinary shares are traded on the TASE, and the Company’s ADSs are traded on the NASDAQ under the symbol “RDHL”. Each ADS represents 10 ordinary shares. The last reported market price for the Company’s securities on December 31, 2018 was $5.55 per ADS on the NASDAQ and $0.54 per share on the TASE (based on the exchange rate reported by the Bank of Israel for that date). On May 2, 2018, a general meeting of the Company’s shareholders approved the increase of the authorized share capital of the Company to 600,000,000 ordinary shares. 2) Exercise of warrants and options During 2018 and 2017, the Company issued 719,374 and 2,988,750 ordinary shares for $0.4 million and $0.8 million, respectively, resulting from exercises of options that had been issued to employees, consultants and directors of the Company. In January 2017, the Company received notification of exercise with respect to non-tradable warrants that had been issued in 2014 to investors in the form of private placements. Accordingly, the Company issued 2,526,320 ordinary shares for approximately $2.63 million. 3) In January 2017, the underwriters for the Company’s December 2016 underwritten public offering partially exercised their option and purchased 133,103 ADSs for approximately $1.28 million. Following the partial exercise of the underwriters’ option, the underwritten public offering and the concurrent registered direct offering totaled 3,846,519 ADSs and warrants to purchase 2,025,458 ADSs, representing aggregate gross proceeds from both offerings of approximately $39.4 million before deducting underwriting discounts and commissions, placement agent fees and other offering expenses. 4) In November 2017, the Company completed an underwritten public offering in the U.S. of an aggregate of 4,090,909 ADSs for gross proceeds to the Company of approximately $22.5 million. Net proceeds to the Company from the offering, following underwriting discounts and other offering expenses of approximately $1.5 million, were approximately $21 million. 5) 6) In December 2018, the Company completed an underwritten offering in the U.S. of an aggregate 2,857,143 ADSs, each representing ten of its ordinary shares, for gross proceeds to the Company of approximately $20 million. Net proceeds to the Company from the offering, following underwriting commissions and other offering expenses, were approximately $18.4 million a. Warrants In January 2017, warrants issued under investment agreements from January 21, 2014, that were exercisable into 4,183,496 ordinary shares, expired along with any right or claim of the holders. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 16 - DERIVATIVE FINANCIAL INSTRUMENTS: a. Warrants issued in 2014 The warrants were classified as a financial liability due to a net settlement provision. In January 2017, the Company issued 2,526,320 ordinary shares for approximately $2.63 million resulting from exercises of these warrants. The remaining unexercised warrants to purchase 1,052,640 ordinary shares expired along with any right or claim whatsoever of the holders. b. Warrants issued in 2016 The warrants, issued under December 2016 offering, were classified as a financial liability due to a net settlement provision. These warrants are exercisable into 2,025,458 ADSs. The warrants have a three-year term and may be exercised either for cash or on a cashless basis at an exercise price of $13.33 per ADS. The fair value of the warrants is computed using the Black and Scholes option pricing model. The fair value of the warrants upon issuance was computed based on the price of an ADS and based on the following parameters: risk-free interest rate of 1.56% and an average standard deviation of 53.13%. The fair value of the warrants as of December 31, 2018, was computed based on the price of an ADS as of December 31, 2018 and based on the following parameters: risk-free interest rate of 2.63% and an average standard deviation of 60.55%. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED PAYMENTS | |
SHARE-BASED PAYMENTS | NOTE 17 - SHARE-BASED PAYMENTS: On May 30, 2010, a general meeting of shareholders approved the option plan of the Company (the “Option Plan”), after being approved by the Board of Directors. In 2017 the Option Plan was amended and restated as the 2010 Award Plan (the “Award Plan”). As of December 31, 2018, the Award Plan allows the Company to allocate up to 38,518,375 options to employees, consultants and directors and are reserved by the Board of Directors for issuance under the Award Plan. The terms and conditions of the grants were determined by the Board of Directors and are according to the Award Plan. a. The following is information on options granted in 2018: Number of options granted According to the Award Plan Exercise Fair value of of the Company price for 1 options on date of Other than to To directors ordinary grant in U.S. dollars Date of grant directors (1) (1)(2) Total share ($) in thousands (3) January 2018 1,455,000 — 1,455,000 0.56 433 March 2018 3,210,000 — 3,210,000 0.65 808 May 2018 — 500,000 500,000 0.65 111 August 2018 630,000 — 630,000 0.84 238 November 2018 210,000 — 210,000 0.90 102 5,505,000 500,000 6,005,000 1,692 1 The options include both options exercisable into the Company’s ordinary shares and options exercisable to the Company’s ADSs. 2) The general meeting of the Company’s shareholders held on May 2, 2018 (the “May 2018 AGM”), subsequent to approval of the Company’s Board of Directors, granted 500,000 options under the Company’s stock options plan to the Company's Chairman of the Board of Directors and Chief Executive Officer. 3) The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company’s ordinary share: $0.48 - $0.88, expected volatility: 50.99% - 58.4%, risk-free interest rate: 2.65% - 3.19% and the expected term was derived based on the contractual term of the options, the expected exercise behavior and expected post-vesting forfeiture rates. the expected volatility assumption used in based on the historical volatility of the Company’s share. b. During 2018, the Board of Directors approved a three years extension of the exercise period of fully-vested options exercisable into the Company's ordinary shares granted to employees and consultants that were originally scheduled to expire in February 2018, March 2018, August 2018, January 2019 and February 2019. Accordingly, 2,844,210 options, 120,000 options, 260,000 options, 750,000 options and 400,000 options, respectively, were extended with new terms: the exercise price will increase by 50% to $0.75, $1.575, $1.035, $1.08 and $1.08 per ordinary share, respectively, and will not be exercisable within one year of the extension. These options originally had a term of seven years. The total incremental fair value of the options as of the date of the extension was approximately $0.4 million and was recorded to the Statement of Comprehensive Loss immediately. a. The May 2018 AGM, subsequent to approval of the Company’s Board of Directors, granted three year extensions of the exercise period of 1,540,000 fully-vested options exercisable into the Company's ordinary shares and 150,000 fully-vested options exercisable into the Company's ordinary shares granted to the Company's Chairman of the Board of Directors and Chief Executive Officer and to a non-executive director of the Company, respectively, that were originally scheduled to expire in February 2018 and May 2018, respectively. These options originally had a term of seven years, and the extensions are under the same terms as detailed in b above. The total incremental fair value of the options on the date of May 2018 AGM was $0.1 million and was recorded to the Statements of Comprehensive Loss immediately. In December 2018, the Board of Directors of the Company also approved the extension of the exercise period of 600,000 options to the Company's Chief Executive Officer that were originally scheduled to expire in February 2019, under the same terms detailed above, subject to the approval of the Company’s shareholders. These options also originally had a term of seven years. d. The following is information on options granted in 2017: Number of options granted According to the Award Plan Exercise Fair value of of the Company price for 1 options on date of Other than to ordinary grant in U.S. dollars Date of grant directors (1) To directors (1) Total share ($) in thousands (2) March 2017 3,650,000 — 3,650,000 1.08 1,777 May 2017 — 640,000 640,000 1.08 290 May 2017 — 500,000 500,000 1.09 227 July 2017 2,445,000 — 2,445,000 0.98 1,205 6,095,000 1,140,000 7,235,000 3,499 1) The options will vest as follows: for directors, employees and consultants of the Company who had provided services exceeding one year to the Company as of the grant date, the options will vest in 16 equal quarterly installments over a four-year period. For directors, employees and consultants of the Company who had not provided services to the Company exceeding one year as of the grant date, the options will vest as follows: 1/4 of the options will vest one year following the grant date and the rest over the following three years in 12 equal quarterly installments. During the contractual term the options will be exercisable, either in full or in part, from the vesting date until the end of 7 years from the date of grant. 2017 grants include both options exercisable into the Company’s ordinary shares and options exercisable to the Company’s ADSs. 2) The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company’s ordinary share: $0.98 - $1.09, expected volatility: 49.48% - 58.09%, risk-free interest rate: 2.05% - 2.23% and the expected term was derived based on the contractual term of the options, the expected exercise behavior and expected post-vesting forfeiture rates. The expected volatility assumption used is based on the historical volatility of the Company’s share. e. Changes in the number of options and weighted averages of exercise prices are as follows: Year Ended December 31, 2018 2017 Weighted Weighted average of average of Number of exercise Number of exercise options price ($) options price ($) Outstanding at beginning of year 25,781,798 1.05 22,025,548 0.95 Exercised (719,374) 0.02 (2,988,750) 0.27 Expired and forfeited (1,707,189) 0.96 (490,000) 1.37 Granted 6,005,000 0.66 7,235,000 1.05 Outstanding at end of year 29,360,235 1.05 25,781,798 1.05 Exercisable at end of year 12,962,574 1.25 16,842,697 0.99 f. The following is information about the exercise price and remaining useful life of outstanding options at year-end: December 31, 2018 2017 Number of Number of options Weighted options Weighted outstanding average of outstanding average of at end of Exercise price remaining at end of Exercise price remaining year range useful life year range useful life 29,360,235 $0.56-$1.61 4.3 25,781,798 $0.5-$1.61 3.5 g. Expenses recognized in profit or loss for the options are as follows: Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands 2,235 1,679 The remaining compensation expenses as of December 31, 2018 are $1.8 million and will be expensed in full by December 2022. The options granted to Company employees in Israel are governed by relevant rules in Section 102 to the Israel Income Tax Ordinance (hereinafter the “Ordinance”). According to the treatment elected by the Company and these rules, the Company is not entitled to claim as tax deductions the amounts charged to employees as a benefit, including amounts recognized as payroll benefits in Company accounts for the options the employees received within the Award Plan. Options granted to option holders who are related parties of the Company are governed by Section 3(i) to the Ordinance. |
NET REVENUES
NET REVENUES | 12 Months Ended |
Dec. 31, 2018 | |
NET REVENUES | |
NET REVENUES | NOTE 18 – NET REVENUES: Year Ended December 31, 2018 2017 2016 U.S dollars in thousands Licensing — — 100 Commercialization of product 4,671 3,240 — Promotional services 3,689 767 — Other revenues 1 8,360 4,007 101 In 2018 and 2017, revenues consist solely revenues with respect to commercialization and promotional activities of the company’s commercial products, as detailed in note 1a(2). |
RESEARCH AND DEVELOPMENT EXPENS
RESEARCH AND DEVELOPMENT EXPENSES, net | 12 Months Ended |
Dec. 31, 2018 | |
RESEARCH AND DEVELOPMENT EXPENSES, net. | |
RESEARCH AND DEVELOPMENT EXPENSES, net | NOTE 19 - RESEARCH AND DEVELOPMENT EXPENSES, net: Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 552 653 652 Professional services 2,297 2,218 1,816 Share-based payments 872 793 841 Clinical and pre-clinical trials 20,373 27,940 20,732 Intellectual property development 290 401 428 Other 478 964 772 24,862 32,969 25,241 |
SELLING, MARKETING AND BUSINESS
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES | |
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES | NOTE 20 – SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES: Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 7,540 5,012 301 Share-based payments 575 387 65 Professional services 1,626 1,778 947 Samples — 1,569 — Travel and related expenses 1,822 2,236 81 Office-related expenses 495 395 86 Other 428 637 75 12,486 12,014 1,555 |
GENERAL AND ADMINISTRATIVE EXPE
GENERAL AND ADMINISTRATIVE EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
GENERAL AND ADMINISTRATIVE EXPENSES | |
GENERAL AND ADMINISTRATIVE EXPENSES | NOTE 21 – GENERAL AND ADMINISTRATIVE EXPENSES: Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 3,880 3,311 1,082 Share-based payments 1,231 1,054 773 Professional services 1,461 2,246 1,391 Office-related expenses 547 567 300 Other 387 847 302 7,506 8,025 3,848 |
FINANCIAL INCOME, net
FINANCIAL INCOME, net | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INCOME, net | |
FINANCIAL INCOME, net | NOTE 22- FINANCIAL INCOME, net: Year Ended December 31, 2018 2017 2016 U.S dollars in thousands Financial income: Fair value gains on derivative financial instruments 104 5,687 1,152 Gains on financial assets at fair value through profit or loss 295 189 80 Gains from changes in exchange rates — 332 34 Interest from bank deposits 279 297 282 678 6,505 1,548 Financial expenses: Loss from changes in exchange rates 125 — — Issuance cost with respect of warrants — — 368 Other 42 77 7 167 77 375 Financial income, net (511) (6,428) (1,173) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 23 – SEGMENT INFORMATION Commencing 2017, the Company has two segments, Commercial Operations and Research & Development. In line with the reporting to the Chief Executive Officer, the performance of these segments is reviewed at revenues, gross profit and operating expenses levels. The Commercial Operations segment covers all areas relating to the commercial sales and operating expenses directly related to that activity and is being performed by the Company’s U.S. subsidiary. The Research and Development segment includes all activities related to the research and development of therapeutic candidates and is being performed by the Company. There is no segmentation of the Statements of Financial Position. Charges such as depreciation, impairment and other non-cash expenses are charged to the relevant segment. a. Segment information Year Ended December 31, Year Ended December 31, 2018 2017 December 31, 2018: Commercial Operations Research and Development Consolidated Commercial Operations Research and Development Consolidated U.S. dollars in thousands U.S. dollars in thousands Net revenues 8,360 — 8,360 4,007 — 4,007 Cost of revenues 2,837 — 2,837 2,126 — 2,126 Gross profit 5,523 — 5,523 1,881 — 1,881 Research and development expenses, net — 24,862 24,862 — 32,969 32,969 Selling, marketing and business development expenses 11,329 1,157 12,486 10,520 1,494 12,014 General and administrative expenses 2,795 4,711 7,506 2,680 5,345 8,025 Other expenses — — — — 845 845 Operating loss 8,601 30,730 39,331 11,319 40,653 51,972 b. Major customers The percentages of total net revenues for the year ended December 31, 2018 and the year ended December 31, 2017 from one customer were 46% and 59%, respectively and from another customer were 42% and 19% respectively. The Company’s revenues were entirely in the U.S. and the payment terms for all customers are 30 to 60 days. |
LOSS PER ORDINARY SHARE
LOSS PER ORDINARY SHARE | 12 Months Ended |
Dec. 31, 2018 | |
LOSS PER ORDINARY SHARE | |
LOSS PER ORDINARY SHARE | NOTE 24- LOSS PER ORDINARY SHARE: a. Basic The basic loss per share is calculated by dividing the loss by the weighted average number of ordinary shares in issue during the period. The following is data taken into account in the computation of basic loss per share: Year Ended December 31, 2018 2017 2016 Loss (U.S. dollars in thousands) 38,820 45,544 29,370 Weighted average number of ordinary shares outstanding during the period (in thousands) 231,204 176,579 128,514 Basic loss per share (U.S. dollars) 0.17 0.26 0.23 b. Diluted Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding, assuming conversion of all potentially dilutive ordinary shares, using the treasury stock method. The Company has two categories of potentially dilutive ordinary shares: warrants issued to investors and options issued to employees and service providers. The effect of options issued to employees and service providers, for all reporting years, is anti-dilutive. In 2017 and 2018, the effect of warrants is anti-dilutive. Year Ended December 31, 2018 2017 2016 Loss (U.S. dollars in thousands) 38,820 45,544 29,370 Adjustment for financial income of warrants — — 1,208 Loss used to determine diluted loss per share 38,820 45,544 30,578 Weighted average number of ordinary shares outstanding during the period (in thousands) 231,204 176,579 128,514 Adjustment for warrants — — 295 Weighted average number of ordinary shares for diluted loss per share (in thousands) 231,204 176,579 128,809 Diluted loss per share (U.S. dollars) 0.17 0.26 0.24 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTIES | |
RELATED PARTIES | NOTE 25 - RELATED PARTIES: a. Key management in 2018 includes members of the Board of Directors and the Chief Executive Officer Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Key management compensation: Salaries and other short-term employee benefits 734 677 576 Post-employment benefits 36 35 32 Share-based payments 510 557 504 Other long-term benefits 26 7 11 b. Balances with related parties: December 31, 2018 2017 U.S. dollars in thousand Current liabilities - Credit balance in “accrued expenses and other current liabilities” 178 199 Non-current liabilities - Derivative financial instruments 8 11 |
EVENTS SUBSEQUENT TO DECEMBER 3
EVENTS SUBSEQUENT TO DECEMBER 31, 2018 | 12 Months Ended |
Dec. 31, 2018 | |
EVENTS SUBSEQUENT TO DECEMBER 31, 2018 | |
EVENTS SUBSEQUENT TO DECEMBER 31, 2018 | NOTE 26 – EVENT SUBSEQUENT TO DECEMBER 31, 2018: On February 25, 2019, the Board of Directors of the Company approved a grant of 178,000 options to purchase ADSs to employees of the Company’s subsidiary and 100,000 options to purchase ordinary shares to advisory board members and an employee of the Company, under the Company’s stock options plan. The estimated fair value of the options on the grant date was $0.8 million. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis for presentation of the financial statements | a. Basis for presentation of the financial statements The consolidated financial statements of the Company as of December 31, 2018 and 2017 and for each of the three years for the period ended on December 31, 2018 have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The significant accounting policies described below have been applied consistently in relation to all the periods presented, unless otherwise stated. The consolidated financial statements have been prepared under the historical cost convention, subject to adjustments in respect of revaluation of financial assets and financial liabilities at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Actual results could differ significantly from those estimates and assumptions. |
Translation of foreign currency balances and transactions | b. Translation of foreign currency transactions and balances 1) Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Company and its subsidiary operate (the “Functional Currency”). The consolidated financial statements are presented in U.S. dollars (“$”), which is the Company’s functional and presentation currency. 2) Transactions and balances Foreign currency transactions in currencies different from the Functional Currency (hereafter foreign currency, mostly New Israeli Shekel (“NIS”)) are translated into the Functional Currency using the exchange rates at the dates of the transactions. Foreign exchange differences resulting from the settlement of such transactions and from the translation of period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recorded in the Statements of Comprehensive Loss under Financing Income or Financial Expenses. |
Principles of consolidation | c. Principles of consolidation Commencing 2017, the Company’s consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions have been eliminated upon consolidation. |
Cash and cash equivalents | d. Cash and cash equivalents Cash and cash equivalents include cash on hand and unrestricted short-term bank deposits with maturities of three months or less. |
Trade receivables | e. Trade receivables Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components. Subsequent to the initial recognition, they are measured at amortized cost using the effective interest rate method, less any impairment loss. |
Inventory | f. Inventory The Company’s inventory represents items held for sale in the ordinary course of business, in the process of production for a sale in the ordinary course of business or materials or supplies to be used in the production process, to the extent they are recoverable. The inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company continually evaluates inventory for potential loss due to excess quantity or obsolete or slow-moving inventory by comparing sales history and sales projections to the inventory on hand. When evidence indicates that the carrying value of a product may not be recoverable, a charge is recorded to reduce the inventory to its current net realizable value. |
Fixed assets | g. Fixed assets Fixed asset items are initially recognized at acquisition cost. Fixed assets items are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method, to reduce the cost of fixed assets to their residual value over their estimated useful lives as follows: % Computer equipment 33 Office furniture and equipment 8-15 Leasehold improvements are depreciated by the straight-line method over the shorter of the term of the lease or the estimated useful life of the improvements. |
Research and development | h. Research and development 1) Research and development assets acquired by the Company, the development of which has not yet been completed, are stated at cost and are not amortized. These assets are tested for impairment once a year. At the time these assets will be available for use, they will be amortized by the straight-line method over their useful lives. 2) Research and development expenses are charged to profit or loss as incurred. An intangible asset arising from the development of the Company’s therapeutic candidates is recognized if all of the following conditions are met: · it is technically feasible to complete the intangible asset so that it will be available for use; · management intends to complete the intangible asset and use it or sell it; · there is an ability to use or sell the intangible asset; · it can be demonstrated how the intangible asset will generate probable future economic benefits; and · adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available and costs associated with the intangible asset during development can be measured reliably. Other development costs that do not meet the above criteria are recognized as expenses as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. As of December 31, 2018, the Company had not yet capitalized any development costs. 3) Amounts paid to purchase intellectual property of therapeutic candidates are capitalized and recorded as intangible assets. Amounts due for future payment based on contractual agreements are accrued upon reaching the relevant milestones. 4) Research and development costs for the performance of pre-clinical trials, clinical trials and manufacturing by subcontractors are recognized as expenses when incurred. |
Impairment of non-financial assets | i. Impairment of non-financial assets Depreciable assets are tested for impairment if any events have occurred or changes in circumstances have taken place which might indicate that their carrying amounts may not be recoverable. Research and development assets, the development of which has not yet been completed, are not amortized and are tested for impairment on an annual basis. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Nonfinancial assets that were subject to impairment are reviewed for possible reversal of the impairment recognized in respect thereof at each date of Statements of Financial Position. |
Financial assets | j. Financial assets As of January 1, 2018, the Company adopted IFRS 9 “Financial Instruments” . 1) Classification The financial assets of the Company are classified into the following categories: financial assets at fair value through profit or loss, and financial assets at amortized cost. The classification is done on the basis of the Company’s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. a) Financial assets at amortized cost Financial assets at amortized cost are assets held within a business model whose objective is to hold assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are included in current assets, except for those with maturities greater than 12 months after the statements of financial position date (for which they are classified as noncurrent assets). Financial assets at amortized cost of the Company are included in trade receivables, other receivables and bank deposits in the Statements of Financial Position. b) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss of the Company are assets not measured at amortized cost in accordance with (1)(a) above. Assets in this category are classified as current assets if they are expected to be settled within 12 months; otherwise, they are classified as noncurrent. 2) Recognition and measurement Regular purchases and sales of financial assets are recognized on the settlement date, which is the date on which the asset is delivered to the Company or delivered by the Company. Investments are initially recognized at fair value plus transaction costs for all financial assets not recorded at fair value through profit or loss, except for trade receivables, that are recognized initially at the amount of consideration that is unconditional unless they contain significant financing components. Financial assets measured at fair value through profit or loss are initially recognized at fair value, related transaction costs are expensed to profit or loss. Financial assets are derecognized when the rights to receive cash flow from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently recorded at fair value. Financial assets at amortized cost are measured in subsequent periods at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the Statement of Comprehensive Loss under “Financial Expenses (Income), net”. 3) Impairment The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost. At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. If the financial instrument is determined to have low credit risk at the reporting date, the Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition. The Company measures the loss allowance for expected credit losses on trade receivables that are within the scope of IFRS 15 and on financial instruments for which the credit risk has increased significantly since initial recognition based on lifetime expected credit losses. Otherwise, the Company measures the loss allowance at an amount equal to 12-month expected credit losses at the current reporting date. Prior to the effective date and adoption of IFRS 9, the financial assets of the Company were classified into the following categories: financial assets at fair value through profit or loss, and loans and receivables. The classification depended on the purpose for which the financial assets were acquired, also, prior to the adoption of IFRS 9, the Company assessed at December 31, 2017 whether there is any objective evidence that a financial asset or group of financial assets was impaired. |
Financial liabilities | k. Financial liabilities Financial liabilities are initially recognized at their fair value minus, in the case of a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the issue of the financial liability. Financial liabilities are subsequently measured at amortized cost, except for derivative financial instruments, which are subsequently measured at fair value through profit or loss. Financial liabilities are classified as current liabilities if payment is due within one year or less, otherwise they are classified as non-current liabilities. The Company’s financial liabilities at amortized cost are included in accounts payable, accrued expenses and other current liabilities and payable in respect of intangible asset. The derivative financial instruments represent warrants that confer the right to net share settlement. The Company removes a financial liability (or a part of a financial liability) from its Statement of Financial Position when, and only when, it is extinguished (when the obligation specified in the contract is discharged, canceled or expired). The Company accounts for a substantial modification of the terms of an existing financial liability or a part of it as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss. |
Share capital | l. Share capital The Company’s ordinary shares are classified as the Company’s share capital. Incremental costs directly attributed to the issuance of new shares or warrants are presented under equity as a deduction from the proceeds of issuance. |
Employee benefits | m. Employee benefits 1) Pension and retirement benefit obligations In any matter related to payment of pension and severance pay to employees in Israel to be dismissed or to retire from the Company, the Company operates in accordance with labor laws. Labor laws and agreements in Israel as well as the Company’s practice, require the Company to pay severance pay and/or pensions to employees dismissed or retired, in certain circumstances. The Company has a severance pay plan in accordance with Section 14 of the Israeli Severance Pay Law which is treated as a defined contribution plan. According to the plan, the Company regularly makes payments to severance pay or pension funds without having a legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay the related payments to employees’ service in current and prior periods. Contributions for severance pay or pension are recognized as employee benefit expenses when they are due commensurate with receipt of work services from the employee, and no further provision is required in the financial statements. The Company’s subsidiary provides, at will, benefit contributions for its employees. 2) Vacation and recreation pay Under Israeli law, each employee in Israel is entitled to vacation days and recreation pay, both computed on an annual basis. This entitlement is based on the period of employment. The Company records expenses and liability for vacation and recreation pay based on the benefit accumulated by each employee. |
Share-based payments | n. Share-based payments The Company operates several equity-settled, share-based compensation plans to employees (as defined in IFRS 2 “Share-Based Payments”) and service providers. As part of the plans, the Company grants employees and service providers, from time to time and at its discretion, options to purchase Company shares. The fair value of the employee and service provider services received in exchange for the grant of the options is recognized as an expense in profit or loss and is recorded as accumulated deficit within equity. The total amount recognized as an expense over the vesting period of the options (the period during which all vesting conditions are expected to be met) is determined by reference to the fair value of the options granted at the date of grant. Vesting conditions are included in the assumptions about the number of options that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to accumulated deficit. When exercising options, the Company issues new shares. The proceeds, less direct attributable transaction costs, are recognized as share capital (par value) and share premium. |
Revenue from contracts with customers | o. Revenue from contracts with customers As of January 1, 2017, the Company early adopted IFRS 15, with full retrospective application. The adoption of IFRS 15 did not have an effect on either revenue recognized in prior periods, nor to accumulated deficit as of January 1, 2015. IFRS 15 introduces a five-step model for recognizing revenue from contracts with customers, as follows: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to the performance obligations in the contract; and · recognize revenue when (or as) the entity satisfies a performance obligation. 1) Revenues from promotional services The Company recognizes revenue from promotional services as it satisfies its performance obligation over time, in an amount equal to the consideration to which it expects to be entitled to, taking into consideration the constraint on variable considerations stipulated in IFRS 15. 2) Revenues from the sale of products Principal versus agent considerations: When a third party is involved in providing goods or services to a customer, the Company analyzes whether the Company acts as a principal or an agent in the transaction, based on whether the Company obtains control of the product before it is transferred to the customer, using the indicators provided in IFRS 15. In connection with the commercialization of EnteraGam ® , the Company is determined to be the principal in the arrangement, rather than an agent of Entera Health Inc. (“Entera Health”), since the Company controls the product before transferring it to a customer. Therefore, revenue in the amount the Company is entitled to receive from its customers is recognized on a gross basis, from which royalties payable to Entera Health are accounted for in cost of revenues. The Company recognizes revenues from the sale of EnteraGam ® at a point in time when control over the product is transferred to customers (upon delivery). The transaction price in these arrangements is the consideration to which the Company expects to be entitled from the customer, reduced by estimates of rebates, discounts, allowances and provision for product returns, given or expected to be given, which vary by product arrangement and buying groups. The Company estimates its variable consideration using the most likely amount method using actual in-market data received pre- and post- end of the accounting period and are applied to inventory held at wholesalers and pharmacies. The Company will continue to refine these estimates and methodologies over time as the breadth of in-market data increases. 3) Revenues from out-licensing of the Company's therapeutic candidates Revenue incurred in connection with the out-licensing of a right to use the Company’s intellectual property is recognized at a point in time when control over the license is transferred to the licensee. The transaction price contains variable considerations contingent upon the licensee achieving certain milestones, as well as sales-based royalties, in accordance with the relevant agreement. Variable payments, contingent on achieving additional milestones, are included in the transaction price based on most likely amount method. Amounts included in the transaction price are recognized only when it is highly probable that a significant reversal of cumulative revenues will not occur, usually upon achievement of a specific milestone, in accordance with the relevant agreement. Sales-based royalties are not included in the transaction price; rather they are recognized as the related sale occurs, due to the specific exception for sales-based royalties in licensing of intellectual property. 4) Practical expedients and exemptions The Company expenses sales commissions when incurred since the amortization period of the asset that the Company otherwise would have recognized would have been for less than one year. These costs are recorded as selling and marketing expenses. |
Advertising and promotional expenses | p. Advertising and promotional expenses Advertising and promotional costs include, among others, distribution of free samples of the commercialized products. These costs are recognized as an expense when incurred. |
Leases | q. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statements of Comprehensive Loss on a straight-line basis over the period of the lease. |
Loss per ordinary share | r. Loss per ordinary share The computation of basic loss per share is based on the Company’s loss divided by the weighted average number of ordinary shares outstanding during the period. In calculating the diluted loss per share, the Company adds the weighted average of the number of shares to be issued to the average number of shares outstanding used to calculate the basic loss per share, assuming all shares that have a potentially dilutive effect have been exercised into shares. |
Deferred taxes | s. Deferred taxes Deferred income tax is recognized using the liability method for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in these financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the date of the Statements of Financial Position and are expected to apply when the related deferred income tax asset will be realized, or the deferred income tax liability will be settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Since the Company is unable to assess whether it will have taxable income in the foreseeable future, no deferred tax assets were recorded in these financial statements. |
Standards and interpretations to existing standards that are not yet in effect and have not been early adopted by the Company | t. Standards and interpretations to existing standards that are not yet in effect and have not been early adopted by the Company International Financial Reporting Standard No. 16 “Leases” (hereafter - IFRS 16) IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet by lessees, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases. The Company has reviewed all of the Company’s and its subsidiary’s leasing arrangements over the last year in light of the new lease accounting rules in IFRS 16. The standard will affect primarily the accounting for the Company’s operating leases. As at the reporting date, the Company has non-cancellable operating lease commitments of $1.8 million, see note 13b. The Company expects to recognize right-of-use assets and lease liabilities of approximately $1.7 million on January 1, 2019. The Company will apply the standard from its mandatory adoption date of January 1, 2019. The Company intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption. The Company expects that net loss will increase by an immaterial amount for 2019 as a result of adopting the new rules. Operating cash flows for 2019 will increase, and financing cash flows will decrease by approximately $0.9 million as repayment of the principal portion of the lease liabilities will be classified as cash flows from financing activities |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of fixed assets | % Computer equipment 33 Office furniture and equipment 8-15 |
CASH, CASH EQUIVALENTS AND BA_2
CASH, CASH EQUIVALENTS AND BANK DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
CASH, CASH EQUIVALENTS AND BANK DEPOSITS | |
Schedule of cash and cash equivalents | December 31, 2018 2017 U.S. dollars in thousands Cash in bank 7,736 8,305 Short-term bank deposits 21,269 8,150 29,005 16,455 |
FINANCIAL INSTRUMENTS AND FIN_2
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT | |
Schedule of assets and liabilities measured at fair value | Level 1 Level 3 Total U.S. dollars in thousands December 31, 2018: Assets - Financial assets at fair value through profit or loss 15,909 — 15,909 Liabilities - Derivative financial instruments — 344 344 December 31, 2017: Assets - Financial assets at fair value through profit or loss 16,587 — 16,587 Liabilities - Derivative financial instruments — 448 448 |
Schedule of change in derivative liabilities measured at Level 3 | Derivative financial instruments Year Ended December 31, 2018 2017 U.S. dollars in thousands Balance at beginning of the year 448 6,155 Exercise of derivative into shares — (20) Fair value adjustments recognized in profit or loss (104) (5,687) Balance at end of the year 344 448 |
PREPAID EXPENSES AND OTHER RE_2
PREPAID EXPENSES AND OTHER RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
PREPAID EXPENSES AND OTHER RECEIVABLES | |
Schedule of prepaid expenses and other receivables | December 31, 2018 2017 U.S. dollars in thousands Advance to suppliers 1,319 2,426 Discount from service provider 241 537 Prepaid expenses 120 130 Government institutions 196 197 1,876 3,290 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INVENTORY | |
Schedule of Inventory | December 31, 2018 2017 U.S. dollars in thousands Raw materials 507 — Finished goods 262 653 769 653 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FIXED ASSETS | |
Schedule of composition of assets and accumulated depreciation, grouped by major classifications | Cost Accumulated depreciation Depreciated balance December 31 December 31 December 31 2018 2017 2018 2017 2018 2017 U.S. dollars in thousands Office furniture and equipment (including computers) 372 349 235 163 137 186 Leasehold improvements 132 132 106 88 26 44 504 481 341 251 163 230 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets changes | Year Ended December 31, 2018 2017 U.S. dollars in thousands Cost: Balance at beginning of year 5,285 6,195 Additions during the year 35 35 Deductions during the year — (945) Balance at end of year 5,320 5,285 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | December 31, 2018 2017 U.S. dollars in thousands Accrued expenses 5,599 4,969 Employees and related liabilities 1,380 1,045 Government institutions 78 11 7,057 6,025 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
COMMITMENTS | |
Schedule of operating lease agreements | December 31, 2018 U.S. dollars in thousands Less than 1 year 994 2-5 years 853 1,847 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
EQUITY | |
Schedule of composition of share capital | Number of shares December 31, 2018 2017 In thousands Authorized 600,000 300,000 Issued and paid 283,687 212,729 |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED PAYMENTS | |
Schedule of information on options granted | a. The following is information on options granted in 2018: Number of options granted According to the Award Plan Exercise Fair value of of the Company price for 1 options on date of Other than to To directors ordinary grant in U.S. dollars Date of grant directors (1) (1)(2) Total share ($) in thousands (3) January 2018 1,455,000 — 1,455,000 0.56 433 March 2018 3,210,000 — 3,210,000 0.65 808 May 2018 — 500,000 500,000 0.65 111 August 2018 630,000 — 630,000 0.84 238 November 2018 210,000 — 210,000 0.90 102 5,505,000 500,000 6,005,000 1,692 1 The options include both options exercisable into the Company’s ordinary shares and options exercisable to the Company’s ADSs. 2) The general meeting of the Company’s shareholders held on May 2, 2018 (the “May 2018 AGM”), subsequent to approval of the Company’s Board of Directors, granted 500,000 options under the Company’s stock options plan to the Company's Chairman of the Board of Directors and Chief Executive Officer. 3) The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company’s ordinary share: $0.48 - $0.88, expected volatility: 50.99% - 58.4%, risk-free interest rate: 2.65% - 3.19% and the expected term was derived based on the contractual term of the options, the expected exercise behavior and expected post-vesting forfeiture rates. the expected volatility assumption used in based on the historical volatility of the Company’s share. b. During 2018, the Board of Directors approved a three years extension of the exercise period of fully-vested options exercisable into the Company's ordinary shares granted to employees and consultants that were originally scheduled to expire in February 2018, March 2018, August 2018, January 2019 and February 2019. Accordingly, 2,844,210 options, 120,000 options, 260,000 options, 750,000 options and 400,000 options, respectively, were extended with new terms: the exercise price will increase by 50% to $0.75, $1.575, $1.035, $1.08 and $1.08 per ordinary share, respectively, and will not be exercisable within one year of the extension. These options originally had a term of seven years. The total incremental fair value of the options as of the date of the extension was approximately $0.4 million and was recorded to the Statement of Comprehensive Loss immediately. a. The May 2018 AGM, subsequent to approval of the Company’s Board of Directors, granted three year extensions of the exercise period of 1,540,000 fully-vested options exercisable into the Company's ordinary shares and 150,000 fully-vested options exercisable into the Company's ordinary shares granted to the Company's Chairman of the Board of Directors and Chief Executive Officer and to a non-executive director of the Company, respectively, that were originally scheduled to expire in February 2018 and May 2018, respectively. These options originally had a term of seven years, and the extensions are under the same terms as detailed in b above. The total incremental fair value of the options on the date of May 2018 AGM was $0.1 million and was recorded to the Statements of Comprehensive Loss immediately. In December 2018, the Board of Directors of the Company also approved the extension of the exercise period of 600,000 options to the Company's Chief Executive Officer that were originally scheduled to expire in February 2019, under the same terms detailed above, subject to the approval of the Company’s shareholders. These options also originally had a term of seven years. d. The following is information on options granted in 2017: Number of options granted According to the Award Plan Exercise Fair value of of the Company price for 1 options on date of Other than to ordinary grant in U.S. dollars Date of grant directors (1) To directors (1) Total share ($) in thousands (2) March 2017 3,650,000 — 3,650,000 1.08 1,777 May 2017 — 640,000 640,000 1.08 290 May 2017 — 500,000 500,000 1.09 227 July 2017 2,445,000 — 2,445,000 0.98 1,205 6,095,000 1,140,000 7,235,000 3,499 1) The options will vest as follows: for directors, employees and consultants of the Company who had provided services exceeding one year to the Company as of the grant date, the options will vest in 16 equal quarterly installments over a four-year period. For directors, employees and consultants of the Company who had not provided services to the Company exceeding one year as of the grant date, the options will vest as follows: 1/4 of the options will vest one year following the grant date and the rest over the following three years in 12 equal quarterly installments. During the contractual term the options will be exercisable, either in full or in part, from the vesting date until the end of 7 years from the date of grant. 2017 grants include both options exercisable into the Company’s ordinary shares and options exercisable to the Company’s ADSs. 2) The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company’s ordinary share: $0.98 - $1.09, expected volatility: 49.48% - 58.09%, risk-free interest rate: 2.05% - 2.23% and the expected term was derived based on the contractual term of the options, the expected exercise behavior and expected post-vesting forfeiture rates. The expected volatility assumption used is based on the historical volatility of the Company’s share. |
Schedule of number of shares and weighted averages of exercise prices | Year Ended December 31, 2018 2017 Weighted Weighted average of average of Number of exercise Number of exercise options price ($) options price ($) Outstanding at beginning of year 25,781,798 1.05 22,025,548 0.95 Exercised (719,374) 0.02 (2,988,750) 0.27 Expired and forfeited (1,707,189) 0.96 (490,000) 1.37 Granted 6,005,000 0.66 7,235,000 1.05 Outstanding at end of year 29,360,235 1.05 25,781,798 1.05 Exercisable at end of year 12,962,574 1.25 16,842,697 0.99 |
Schedule of information about exercise price and remaining useful life of outstanding options | December 31, 2018 2017 Number of Number of options Weighted options Weighted outstanding average of outstanding average of at end of Exercise price remaining at end of Exercise price remaining year range useful life year range useful life 29,360,235 $0.56-$1.61 4.3 25,781,798 $0.5-$1.61 3.5 |
Schedule of expenses recognized in profit or loss | Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands 2,235 1,679 |
NET REVENUES (Tables)
NET REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
NET REVENUES | |
Schedule of net revenues | Year Ended December 31, 2018 2017 2016 U.S dollars in thousands Licensing — — 100 Commercialization of product 4,671 3,240 — Promotional services 3,689 767 — Other revenues 1 8,360 4,007 101 |
RESEARCH AND DEVELOPMENT EXPE_2
RESEARCH AND DEVELOPMENT EXPENSES, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RESEARCH AND DEVELOPMENT EXPENSES, net. | |
Schedule of research and development expenses, net | Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 552 653 652 Professional services 2,297 2,218 1,816 Share-based payments 872 793 841 Clinical and pre-clinical trials 20,373 27,940 20,732 Intellectual property development 290 401 428 Other 478 964 772 24,862 32,969 25,241 |
SELLING, MARKETING AND BUSINE_2
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES | |
Schedule of selling, marketing and business development expenses | Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 7,540 5,012 301 Share-based payments 575 387 65 Professional services 1,626 1,778 947 Samples — 1,569 — Travel and related expenses 1,822 2,236 81 Office-related expenses 495 395 86 Other 428 637 75 12,486 12,014 1,555 |
GENERAL AND ADMINISTRATIVE EX_2
GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
GENERAL AND ADMINISTRATIVE EXPENSES | |
Schedule of general and administrative expenses | Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Payroll and related expenses 3,880 3,311 1,082 Share-based payments 1,231 1,054 773 Professional services 1,461 2,246 1,391 Office-related expenses 547 567 300 Other 387 847 302 7,506 8,025 3,848 |
FINANCIAL INCOME, net (Tables)
FINANCIAL INCOME, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INCOME, net | |
Schedule of financial income, net | Year Ended December 31, 2018 2017 2016 U.S dollars in thousands Financial income: Fair value gains on derivative financial instruments 104 5,687 1,152 Gains on financial assets at fair value through profit or loss 295 189 80 Gains from changes in exchange rates — 332 34 Interest from bank deposits 279 297 282 678 6,505 1,548 Financial expenses: Loss from changes in exchange rates 125 — — Issuance cost with respect of warrants — — 368 Other 42 77 7 167 77 375 Financial income, net (511) (6,428) (1,173) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SEGMENT INFORMATION | |
Schedule of segment information | Year Ended December 31, Year Ended December 31, 2018 2017 December 31, 2018: Commercial Operations Research and Development Consolidated Commercial Operations Research and Development Consolidated U.S. dollars in thousands U.S. dollars in thousands Net revenues 8,360 — 8,360 4,007 — 4,007 Cost of revenues 2,837 — 2,837 2,126 — 2,126 Gross profit 5,523 — 5,523 1,881 — 1,881 Research and development expenses, net — 24,862 24,862 — 32,969 32,969 Selling, marketing and business development expenses 11,329 1,157 12,486 10,520 1,494 12,014 General and administrative expenses 2,795 4,711 7,506 2,680 5,345 8,025 Other expenses — — — — 845 845 Operating loss 8,601 30,730 39,331 11,319 40,653 51,972 |
LOSS PER ORDINARY SHARE (Tables
LOSS PER ORDINARY SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LOSS PER ORDINARY SHARE | |
Schedule of loss per ordinary share | a. Basic The basic loss per share is calculated by dividing the loss by the weighted average number of ordinary shares in issue during the period. The following is data taken into account in the computation of basic loss per share: Year Ended December 31, 2018 2017 2016 Loss (U.S. dollars in thousands) 38,820 45,544 29,370 Weighted average number of ordinary shares outstanding during the period (in thousands) 231,204 176,579 128,514 Basic loss per share (U.S. dollars) 0.17 0.26 0.23 b. Diluted Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding, assuming conversion of all potentially dilutive ordinary shares, using the treasury stock method. The Company has two categories of potentially dilutive ordinary shares: warrants issued to investors and options issued to employees and service providers. The effect of options issued to employees and service providers, for all reporting years, is anti-dilutive. In 2017 and 2018, the effect of warrants is anti-dilutive. Year Ended December 31, 2018 2017 2016 Loss (U.S. dollars in thousands) 38,820 45,544 29,370 Adjustment for financial income of warrants — — 1,208 Loss used to determine diluted loss per share 38,820 45,544 30,578 Weighted average number of ordinary shares outstanding during the period (in thousands) 231,204 176,579 128,514 Adjustment for warrants — — 295 Weighted average number of ordinary shares for diluted loss per share (in thousands) 231,204 176,579 128,809 Diluted loss per share (U.S. dollars) 0.17 0.26 0.24 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RELATED PARTIES | |
Schedule of key management compensation: | Year Ended December 31, 2018 2017 2016 U.S. dollars in thousands Key management compensation: Salaries and other short-term employee benefits 734 677 576 Post-employment benefits 36 35 32 Share-based payments 510 557 504 Other long-term benefits 26 7 11 |
Schedule of balances with related parties | December 31, 2018 2017 U.S. dollars in thousand Current liabilities - Credit balance in “accrued expenses and other current liabilities” 178 199 Non-current liabilities - Derivative financial instruments 8 11 |
GENERAL (Details)
GENERAL (Details) | 12 Months Ended |
Dec. 31, 2018 | |
EnteraGam [member] | |
General [Line Items] | |
Agreement Term | 4 years |
Donnatal and Mytesi [member] | Minimum | |
General [Line Items] | |
Agreement Term | 1 year 6 months |
Donnatal and Mytesi [member] | Maximum | |
General [Line Items] | |
Agreement Term | 4 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2018 |
IFRS 16 | ||
Decrease in cash flows from financing activities | $ 0.9 | |
Forecast | ||
IFRS 16 | ||
Recognition of right-of-use assets and lease liabilities | $ 1.7 | |
Computer equipment | ||
Accounting Policies [Line Items] | ||
Depreciation rate (as a percent) | 33.00% | |
Office furniture and equipment | Minimum | ||
Accounting Policies [Line Items] | ||
Depreciation rate (as a percent) | 8.00% | |
Office furniture and equipment | Maximum | ||
Accounting Policies [Line Items] | ||
Depreciation rate (as a percent) | 15.00% |
FINANCIAL INSTRUMENTS AND FIN_3
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Financial instruments | |||
Percentage of currency stronger against the NIS | 5.00% | 5.00% | 5.00% |
Additional expense that would have been recognized | $ 58,000 | $ 56,000 | $ 78,000 |
Financial assets at fair value through profit or loss | 15,909,000 | 16,587,000 | |
Fair value adjustments recognized in profit or loss | $ 104,000 | $ 5,687,000 | 1,152,000 |
Maximum | |||
Financial instruments | |||
Maturity periods for cash balances in highly-rated bank deposits | 1 year | ||
Portfolio invested in a single bond issuer (as a percent) | 10.00% | ||
Period for non-derivative financial liabilities | item | 1 | 1 | |
Derivative financial instruments. | |||
Financial instruments | |||
Derivative liabilities- balance at beginning of the period | $ 448,000 | ||
Derivative liabilities- balance at end of the period | 344,000 | $ 448,000 | |
At fair value | |||
Financial instruments | |||
Financial assets at fair value through profit or loss | 15,909,000 | 16,587,000 | |
Level 1 | At fair value | |||
Financial instruments | |||
Financial assets at fair value through profit or loss | 15,909,000 | 16,587,000 | |
Level 3 | Derivative financial instruments. | |||
Financial instruments | |||
Derivative liabilities- balance at beginning of the period | 448,000 | 6,155,000 | |
Exercise of derivative into shares | (20,000) | ||
Fair value adjustments recognized in profit or loss | (104,000) | (5,687,000) | |
Derivative liabilities- balance at end of the period | $ 344,000 | $ 448,000 | $ 6,155,000 |
CASH, CASH EQUIVALENTS AND BA_3
CASH, CASH EQUIVALENTS AND BANK DEPOSITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and Cash Equivalents [Line Items] | ||||
Cash in bank | $ 7,736 | $ 8,305 | ||
Short-term bank deposits | 21,269 | 8,150 | ||
Cash and cash equivalents | $ 29,005 | $ 16,455 | $ 53,786 | $ 21,516 |
Minimum | ||||
Cash and Cash Equivalents [Line Items] | ||||
Bank deposits, term | 3 months | |||
Bank deposits, annual interest rate | 2.03% | |||
Maximum | ||||
Cash and Cash Equivalents [Line Items] | ||||
Bank deposits, term | 1 year |
PREPAID EXPENSES AND OTHER RE_3
PREPAID EXPENSES AND OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
PREPAID EXPENSES AND OTHER RECEIVABLES | ||
Advances to suppliers | $ 1,319 | $ 2,426 |
Discount from service provider | 241 | 537 |
Prepaid expenses | 120 | 130 |
Government institutions | 196 | 197 |
Total prepaid expenses and other receivables | $ 1,876 | $ 3,290 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
INVENTORY | ||
Raw materials | $ 507 | |
Finished goods | 262 | $ 653 |
Total current inventories | 769 | 653 |
Inventories recognized as part of cost of revenues | $ 1,000 | $ 800 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed assets | ||
Fixed assets | $ 163 | $ 230 |
Cost | ||
Fixed assets | ||
Fixed assets | 504 | 481 |
Accumulated depreciation | ||
Fixed assets | ||
Fixed assets | 341 | 251 |
Office furniture and equipment (including computers) | ||
Fixed assets | ||
Fixed assets | 137 | 186 |
Office furniture and equipment (including computers) | Cost | ||
Fixed assets | ||
Fixed assets | 372 | 349 |
Office furniture and equipment (including computers) | Accumulated depreciation | ||
Fixed assets | ||
Fixed assets | 235 | 163 |
Leasehold improvements | ||
Fixed assets | ||
Fixed assets | 26 | 44 |
Leasehold improvements | Cost | ||
Fixed assets | ||
Fixed assets | 132 | 132 |
Leasehold improvements | Accumulated depreciation | ||
Fixed assets | ||
Fixed assets | $ 106 | $ 88 |
INTANGIBLE ASSETS - Changes in
INTANGIBLE ASSETS - Changes in Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of changes in intangible assets | ||
Balance at beginning of year | $ 5,285 | |
Balance at end of year | 5,320 | $ 5,285 |
Cost | ||
Reconciliation of changes in intangible assets | ||
Balance at beginning of year | 5,285 | 6,195 |
Additions during the year | 35 | 35 |
Deductions during the year | (945) | |
Balance at end of year | $ 5,320 | $ 5,285 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 1 Months Ended | |
Dec. 31, 2017 | Feb. 28, 2017 | |
Drug candidate, congestive heart failure | ||
Reconciliation of changes in intangible assets | ||
Recognized loss | $ 100,000 | |
Therapeutic candidate, acute migraine | ||
Reconciliation of changes in intangible assets | ||
Recognized loss | $ 800,000 | |
Therapeutic candidate, pancreatic cancer | ||
Reconciliation of changes in intangible assets | ||
Recognized loss | $ 45,000 |
LIABILITY FOR EMPLOYEE RIGHTS_2
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT | |||
Defined contribution plans expense | $ 182,000 | $ 155,000 | $ 121,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued expenses | $ 5,599 | $ 4,969 |
Employees and related liabilities | 1,380 | 1,045 |
Government Institutions | 78 | 11 |
Accrued expenses and other current liabilities | $ 7,057 | $ 6,025 |
COMMITMENTS - Agreements to Pur
COMMITMENTS - Agreements to Purchase IP (Details) | Jun. 30, 2014USD ($) | Aug. 11, 2010USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2018USD ($) | Mar. 30, 2015USD ($) |
Australian Asset Purchase Agreement | |||||
Commitments | |||||
Number of therapeutic candidates | item | 3 | ||||
Upfront initial payment per agreement | $ 500,000 | $ 1,000,000 | |||
Aggregate payments made | $ 1,500,000 | ||||
Australian Asset Purchase Agreement | Minimum | |||||
Commitments | |||||
Percentage of revenues to be paid in the future | 7.00% | ||||
Australian Asset Purchase Agreement | Maximum | |||||
Commitments | |||||
Percentage of revenues to be paid in the future | 20.00% | ||||
Salix Pharmaceuticals, Ltd. Agreement [Member] | |||||
Commitments | |||||
Upfront initial payment per agreement | 7,000,000 | ||||
Salix Pharmaceuticals, Ltd. Agreement [Member] | Maximum | |||||
Commitments | |||||
Milestones to be paid | $ 5,000,000 | ||||
German Publicly Traded Company Arrangement | |||||
Commitments | |||||
Upfront initial payment per agreement | $ 1,000,000 | ||||
German Publicly Traded Company Arrangement | Maximum | |||||
Commitments | |||||
Royalties percentage | 30.00% | ||||
U.S. Private Company Arrangement | |||||
Commitments | |||||
Milestones to be paid | $ 2,000,000 | ||||
Aggregate payments made | $ 3,000,000 | 1,500,000 | |||
Revenue Milestone | U.S. Private Company Arrangement | Maximum | |||||
Commitments | |||||
Milestones to be paid | $ 2,000,000 |
COMMITMENTS - Operating Lease A
COMMITMENTS - Operating Lease Agreements (Details) - USD ($) | Jan. 31, 2019 | Dec. 31, 2018 |
Operating lease | ||
Obligations under non-cancellable operating lease | $ 1,847,000 | |
Amount deposited with bank to secure lease obligation | $ 140,000 | |
Minimum | ||
Operating lease | ||
Operating lease, term | 2 years | |
Maximum | ||
Operating lease | ||
Operating lease, term | 5 years | |
Israel | Amendment to lease agreement [member] | ||
Operating lease | ||
Obligations under non-cancellable operating lease | $ 400,000 | |
Less than 1 year | ||
Operating lease | ||
Obligations under non-cancellable operating lease | $ 994,000 | |
2-5 years | ||
Operating lease | ||
Obligations under non-cancellable operating lease | $ 853,000 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | ||||
Deductible temporary differences | $ 27 | $ 28 | ||
Israel | ||||
Income Tax [Line Items] | ||||
Corporate tax rate | 23.00% | 24.00% | 25.00% | |
Net operating losses | $ 135 | |||
U.S. | ||||
Income Tax [Line Items] | ||||
Net operating losses | 18 | |||
U.S. | Forecast | ||||
Income Tax [Line Items] | ||||
Corporate tax rate | 21.00% | |||
U.S. | Net operating losses expiring in 2037 [Member] | ||||
Income Tax [Line Items] | ||||
Net operating losses | 10 | |||
U.S. | Net operating losses with no expiriation [Member] | ||||
Income Tax [Line Items] | ||||
Net operating losses | $ 8 |
EQUITY (Details)
EQUITY (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Aug. 31, 2018USD ($)shares | Nov. 30, 2017USD ($)shares | Jan. 31, 2017USD ($)shares | Jan. 31, 2014shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2018₪ / sharesshares | Dec. 31, 2018$ / sharesshares | May 02, 2018shares | |
Disclosure of classes of share capital [line items] | |||||||||||
Proceeds from issuance of shares | $ | $ 41,902 | $ 22,216 | $ 35,754 | ||||||||
American Depository Shares | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares issued | 4,166,667 | 4,090,909 | 2,857,143 | 2,857,143 | |||||||
Proceeds from issuance of shares, gross | $ | $ 20,000 | $ 25,000 | $ 22,500 | ||||||||
Share issue related costs | $ | 1,500 | ||||||||||
Proceeds from issuance of shares | $ | $ 18,400 | $ 23,500 | $ 21,000 | ||||||||
American Depository Shares | Underwriters | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares issued | 3,846,519 | ||||||||||
Stock Options | American Depository Shares | Underwriters | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares issued | 133,103 | ||||||||||
Proceeds from exercise of options | $ | $ 1,280 | ||||||||||
Ordinary shares and warrants | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares issued | 2,526,320 | ||||||||||
Procceds from issuance of ordinary shares and warrants | $ | $ 2,630 | ||||||||||
Ordinary shares | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Par value per share | ₪ / shares | ₪ 0.01 | ||||||||||
Authorized | 300,000,000 | 600,000,000 | 600,000,000 | 600,000,000 | |||||||
Issued and paid | 212,729,000 | 283,687,000 | 283,687,000 | ||||||||
Market price per ordinary share | $ / shares | $ 5.55 | ||||||||||
Ordinary shares | American Depository Shares | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
American depository share equivalent | 10 | 10 | |||||||||
Market price per American Depository share | $ / shares | $ 0.54 | ||||||||||
Ordinary shares | Stock Options | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Proceeds from exercise of options | $ | $ 400 | $ 800 | |||||||||
Warrants | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Warrants issued | 4,183,496 | ||||||||||
Warrants | Stock Options | American Depository Shares | Underwriters | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Warrants issued | 2,025,458 | ||||||||||
Procceds from issuance of ordinary shares and warrants | $ | $ 39,400 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2016 | Jan. 03, 2017 | |
Warrants issued in 2014 | |||||
Disclosure of detailed information about hedges [line items] | |||||
Number of shares issued | 2,526,320 | ||||
Proceeds from warrant exercises | $ 2,630 | ||||
Number of warrants expired | 1,052,640 | ||||
Warrants issued in 2016 | |||||
Disclosure of detailed information about hedges [line items] | |||||
Warrants exercisable into number of ADSs | 60.55 | 2,025,458 | |||
Derivative term | 3 years | ||||
Risk-free interest rate | 1.56% | 2.63% | |||
Average standard deviation | 53.13% | ||||
Warrants exercise price | $ 13.33 | $ 13.33 |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) | Dec. 31, 2018USD ($)Optionshares | May 02, 2018USD ($) | Dec. 31, 2018USD ($)Optionshares | May 31, 2018USD ($)shares | Dec. 31, 2018USD ($)Optioninstallmentshares | Dec. 31, 2017USD ($)Optioninstallmentshares |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 6,005,000 | 7,235,000 | ||||
Number of options granted | Option | 6,005,000 | 7,235,000 | ||||
Exercise price for 1 ordinary share ($) | $ 0.66 | $ 1.05 | ||||
Fair value of options on date of grant in U.S. $ thousands | $ 1,692,000 | $ 1,692,000 | $ 1,692,000 | $ 3,499,000 | ||
Each option exercisable into number of ordinary shares, ratio | Option | 12,962,574 | 12,962,574 | 12,962,574 | 16,842,697 | ||
January 2,018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 1,455,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.56 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 433,000 | $ 433,000 | $ 433,000 | |||
March 2,018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 3,210,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.65 | |||||
Fair value of options on date of grant in U.S. $ thousands | 808,000 | 808,000 | $ 808,000 | |||
May 2,018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 500,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.65 | |||||
Fair value of options on date of grant in U.S. $ thousands | 111,000 | 111,000 | $ 111,000 | |||
August 2,018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 630,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.84 | |||||
Fair value of options on date of grant in U.S. $ thousands | 238,000 | 238,000 | $ 238,000 | |||
November 2,018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 210,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.90 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 102,000 | $ 102,000 | $ 102,000 | |||
March 2,017 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 3,650,000 | |||||
Exercise price for 1 ordinary share ($) | $ 1.08 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 1,777,000 | |||||
May 2017, first tranche | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 640,000 | |||||
Exercise price for 1 ordinary share ($) | $ 1.08 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 290,000 | |||||
May 2017, second tranche | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 500,000 | |||||
Exercise price for 1 ordinary share ($) | $ 1.09 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 227,000 | |||||
July 2,017 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 2,445,000 | |||||
Exercise price for 1 ordinary share ($) | $ 0.98 | |||||
Fair value of options on date of grant in U.S. $ thousands | $ 1,205,000 | |||||
Stock Options | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 38,518,375 | |||||
Extension of the exercise period | 3 years | |||||
Stock Options | 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Option term | 10 years | |||||
Stock Options | 2018 | Minimum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Price of the Company’s ordinary share | $ 0.48 | |||||
Expected volatility | 50.99% | |||||
Risk free interest rate | 2.65% | |||||
Stock Options | 2018 | Maximum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Price of the Company’s ordinary share | $ 0.88 | |||||
Expected volatility | 58.40% | |||||
Risk free interest rate | 3.19% | |||||
Stock Options | 2018 | Vesting, services exceeding one year | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of equal quarterly vesting installments | installment | 16 | |||||
Vesting period | 4 years | |||||
Stock Options | 2018 | Vesting, services exceeding one year | Minimum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Service period | 1 year | |||||
Stock Options | 2018 | Vesting, services not exceeding one year | Maximum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Service period | 1 year | |||||
Stock Options | 2018 | Vesting, one year following the date of grant (services not exceeding one year) | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Vesting period | 1 year | |||||
Percentage of options vesting | 0.25% | |||||
Stock Options | 2018 | Vesting, three years following one year after the date of grant (services not exceeding one year) | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of equal quarterly vesting installments | installment | 12 | |||||
Stock Options | 2017 | Minimum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Price of the Company’s ordinary share | $ 0.98 | |||||
Expected volatility | 49.48% | |||||
Risk free interest rate | 2.05% | |||||
Stock Options | 2017 | Maximum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Price of the Company’s ordinary share | $ 1.09 | |||||
Expected volatility | 58.09% | |||||
Risk free interest rate | 2.23% | |||||
Other than directors | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 5,505,000 | 6,095,000 | ||||
Other than directors | January 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 1,455,000 | |||||
Other than directors | March 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 3,210,000 | |||||
Other than directors | August 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 630,000 | |||||
Other than directors | November 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 210,000 | |||||
Other than directors | March 2017 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 3,650,000 | |||||
Other than directors | July 2017 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 2,445,000 | |||||
Other than directors | Stock Options | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price increase (as a percent) | 50.00% | |||||
Incremental fair value | $ 400,000 | |||||
Other than directors | Stock Options | Extension of options originally scheduled to expire in February 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price for 1 ordinary share ($) | $ 0.75 | |||||
Number of fully-vested options | shares | 2,844,210 | |||||
Other than directors | Stock Options | Extension of options originally scheduled to expire in March 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price for 1 ordinary share ($) | $ 1.575 | |||||
Number of fully-vested options | shares | 120,000 | |||||
Other than directors | Stock Options | Extension of options originally scheduled to expire in August 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price for 1 ordinary share ($) | $ 1.035 | |||||
Number of fully-vested options | shares | 260,000 | |||||
Other than directors | Stock Options | Extension of options originally scheduled to expire in January 2019 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price for 1 ordinary share ($) | $ 1.08 | |||||
Number of fully-vested options | shares | 750,000 | |||||
Other than directors | Stock Options | Extension of options originally scheduled to expire in February 2019 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Exercise price for 1 ordinary share ($) | $ 1.08 | |||||
Number of fully-vested options | shares | 400,000 | |||||
Other than directors | Stock Options | Minimum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Vesting period | 1 year | |||||
Other than directors | Stock Options | 2017 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Vesting period | 4 years | |||||
Option term | 7 years | |||||
Other than directors | Stock Options | 2017 | Minimum | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Service period | 1 year | |||||
Other than directors | Stock Options | 2017 | Vesting, services exceeding one year | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of equal quarterly vesting installments | installment | 16 | |||||
Other than directors | Stock Options | 2017 | Vesting, services not exceeding one year | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Service period | 1 year | |||||
Other than directors | Stock Options | 2017 | Vesting, one year following the date of grant (services not exceeding one year) | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Vesting period | 1 year | |||||
Percentage of options vesting | 0.25% | |||||
Other than directors | Stock Options | 2017 | Vesting, three years following one year after the date of grant (services not exceeding one year) | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of equal quarterly vesting installments | installment | 12 | |||||
Vesting period | 3 years | |||||
To directors | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 500,000 | 1,140,000 | ||||
To directors | May 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 500,000 | |||||
To directors | May 2017, first tranche | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 640,000 | |||||
To directors | May 2017, second tranche | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Shares approved for issuance | shares | 500,000 | |||||
To directors | Stock Options | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of options granted | 500,000 | |||||
Number of shares that were granted an extension | shares | 600,000 | |||||
Incremental fair value | $ 100,000 | |||||
To directors | Stock Options | Extension of options originally scheduled to expire in February 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of fully-vested options | shares | 1,540,000 | |||||
To directors | Stock Options | Extension of options originally scheduled to expire in May 2018 | ||||||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||||
Number of fully-vested options | shares | 150,000 |
SHARE-BASED PAYMENTS - Number o
SHARE-BASED PAYMENTS - Number of Shares and Weighted Averages of Exercise Prices (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)Option | Dec. 31, 2017USD ($)Option | |
SHARE-BASED PAYMENTS | ||
Number of options, outstanding at beginning of year | Option | 25,781,798 | 22,025,548 |
Number of options, exercised | Option | (719,374) | (2,988,750) |
Number of options, expired and forfeited | Option | (1,707,189) | (490,000) |
Number of options, granted | Option | 6,005,000 | 7,235,000 |
Number of options, outstanding at end of year | Option | 29,360,235 | 25,781,798 |
Number of options, exercisable at end of year | Option | 12,962,574 | 16,842,697 |
Weighted average of exercise price, outstanding at beginning of year | $ | $ 1.05 | $ 0.95 |
Weighted average of exercise price, exercised | $ | 0.02 | 0.27 |
Weighted average of exercise price, expired and forfeited | $ | 0.96 | 1.37 |
Weighted average of exercise price, granted | $ | 0.66 | 1.05 |
Weighted average of exercise price, outstanding at end of year | $ | 1.05 | 1.05 |
Weighted average of exercise price, exercisable at end of year | $ | $ 1.25 | $ 0.99 |
SHARE-BASED PAYMENTS - Informat
SHARE-BASED PAYMENTS - Information About Exercise Price and Remaining Useful Life of Outstanding Options (Details) | Dec. 31, 2018USD ($)YOption | Dec. 31, 2017USD ($)YOption | Dec. 31, 2016Option |
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number of options outstanding at end of Year | Option | 29,360,235 | 25,781,798 | 22,025,548 |
Weighted average of remaining useful life | Y | 4.3 | 3.5 | |
Minimum | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Exercise price range | $ 0.56 | $ 0.50 | |
Maximum | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Exercise price range | $ 1.61 | $ 1.61 |
SHARE-BASED PAYMENTS - Expenses
SHARE-BASED PAYMENTS - Expenses Recognized in Profit or Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SHARE-BASED PAYMENTS | |||
Expenses recognized in profit or loss | $ 2,678 | $ 2,235 | $ 1,679 |
Unrecognized compensation expenses | $ 1,800 |
NET REVENUES (Details)
NET REVENUES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Licensing | $ 100 | ||
Commercialization of product | $ 4,671 | $ 3,240 | |
Promotional services | 3,689 | 767 | |
Other Revenues | 1 | ||
Total Net Revenues | $ 8,360 | $ 4,007 | $ 101 |
RESEARCH AND DEVELOPMENT EXPE_3
RESEARCH AND DEVELOPMENT EXPENSES, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, net | $ 24,862 | $ 32,969 | $ 25,241 |
Payroll and related expenses | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | 552 | 653 | 652 |
Professional services | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | 2,297 | 2,218 | 1,816 |
Share-based payments | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | 872 | 793 | 841 |
Clinical and pre-clinical trials | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | 20,373 | 27,940 | 20,732 |
Intellectual property development | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | 290 | 401 | 428 |
Other | |||
Research And Development Expenses Net [Line Items] | |||
Research and development expenses, gross | $ 478 | $ 964 | $ 772 |
SELLING, MARKETING AND BUSINE_3
SELLING, MARKETING AND BUSINESS DEVELOPMENT EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | $ 12,486 | $ 12,014 | $ 1,555 |
Payroll and related expenses | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 7,540 | 5,012 | 301 |
Share-based payments | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 575 | 387 | 65 |
Professional services | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 1,626 | 1,778 | 947 |
Samples | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 1,569 | ||
Travel and related expenses | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 1,822 | 2,236 | 81 |
Office related expenses, net | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | 495 | 395 | 86 |
Other | |||
Selling Marketing And Business Development Expenses [Line Items] | |||
Selling, marketing and business development expenses | $ 428 | $ 637 | $ 75 |
GENERAL AND ADMINISTRATIVE EX_3
GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
General And Administrative Expense [Line Items] | |||
General and administrative expenses | $ 7,506 | $ 8,025 | $ 3,848 |
Payroll and related expenses | |||
General And Administrative Expense [Line Items] | |||
General and administrative expenses | 3,880 | 3,311 | 1,082 |
Share-based payments | |||
General And Administrative Expense [Line Items] | |||
General and administrative expenses | 1,231 | 1,054 | 773 |
Professional services | |||
General And Administrative Expense [Line Items] | |||
General and administrative expenses | 1,461 | 2,246 | 1,391 |
Office related expenses, net | |||
General And Administrative Expense [Line Items] | |||
General and administrative expenses | 547 | 567 | 300 |
Other | |||
General And Administrative Expense [Line Items] | |||
General and administrative expenses | $ 387 | $ 847 | $ 302 |
FINANCIAL INCOME, net (Details)
FINANCIAL INCOME, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
FINANCIAL INCOME, net | |||
Fair value gain on derivative financial instruments | $ 104 | $ 5,687 | $ 1,152 |
Gains on financial assets at fair value through profit or loss | 295 | 189 | 80 |
Gain from changes in exchange rates | 332 | 34 | |
Interest from bank deposits | 279 | 297 | 282 |
Financial income | 678 | 6,505 | 1,548 |
Loss from changes in exchange rates | 125 | ||
Issuance cost with respect of warrants | 368 | ||
Other | 42 | 77 | 7 |
Financial expenses | 167 | 77 | 375 |
Financial income net | $ (511) | $ (6,428) | $ (1,173) |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of operating segments [line items] | |||
Net revenues | $ 8,360 | $ 4,007 | $ 101 |
Cost of revenues | 2,837 | 2,126 | |
Gross profit | 5,523 | 1,881 | 101 |
Research and development expenses, net | 24,862 | 32,969 | 25,241 |
Selling, marketing and business development expenses | 12,486 | 12,014 | 1,555 |
General and administrative expenses | 7,506 | 8,025 | 3,848 |
Other expenses | 845 | ||
Operating loss | 39,331 | 51,972 | $ 30,543 |
Commercial Operation | |||
Disclosure of operating segments [line items] | |||
Net revenues | 8,360 | 4,007 | |
Cost of revenues | 2,837 | 2,126 | |
Gross profit | 5,523 | 1,881 | |
Selling, marketing and business development expenses | 11,329 | 10,520 | |
General and administrative expenses | 2,795 | 2,680 | |
Operating loss | 8,601 | 11,319 | |
Research and Development | |||
Disclosure of operating segments [line items] | |||
Research and development expenses, net | 24,862 | 32,969 | |
Selling, marketing and business development expenses | 1,157 | 1,494 | |
General and administrative expenses | 4,711 | 5,345 | |
Other expenses | 845 | ||
Operating loss | $ 30,730 | $ 40,653 |
SEGMENT INFORMATION - Major Cus
SEGMENT INFORMATION - Major Customers (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum | ||
Disclosure of major customers [line items] | ||
Payment terms for customers | 30 years | |
Maximum | ||
Disclosure of major customers [line items] | ||
Payment terms for customers | 60 years | |
Customer One | ||
Disclosure of major customers [line items] | ||
Percentage of revenue | 46.00% | 59.00% |
Customer Two | ||
Disclosure of major customers [line items] | ||
Percentage of revenue | 42.00% | 19.00% |
LOSS PER ORDINARY SHARE - Basic
LOSS PER ORDINARY SHARE - Basic (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic | |||
Loss (U.S. dollars in thousands) | $ 38,820 | $ 45,544 | $ 29,370 |
Weighted average number of ordinary shares outstanding during the period (in thousands) | 231,204 | 176,579 | 128,514 |
Basic loss per share (U.S. dollars) | $ 0.17 | $ 0.26 | $ 0.23 |
LOSS PER ORDINARY SHARE - Dilut
LOSS PER ORDINARY SHARE - Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Diluted | |||
Loss (U.S. dollars in thousands) | $ 38,820 | $ 45,544 | $ 29,370 |
Adjustment for financial income of warrants | 1,208 | ||
Loss used to determine diluted loss per share | $ 38,820 | $ 45,544 | $ 30,578 |
Weighted average number of ordinary shares outstanding during the period (in thousands) | 231,204 | 176,579 | 128,514 |
Adjustment for warrants | 295 | ||
Weighted average number of ordinary shares for diluted loss per share (in thousands) | 231,204 | 176,579 | 128,809 |
Diluted loss per share (U.S. dollars) | $ 0.17 | $ 0.26 | $ 0.24 |
RELATED PARTIES - Key Managemen
RELATED PARTIES - Key Management Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
RELATED PARTIES | |||
Salaries and other short-term employee benefits | $ 734 | $ 677 | $ 576 |
Post-employment benefits | 36 | 35 | 32 |
Share-based payments | 510 | 557 | 504 |
Other long-term benefits | $ 26 | $ 7 | $ 11 |
RELATED PARTIES - Balances with
RELATED PARTIES - Balances with Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current liabilities | ||
Credit balance in “accrued expenses and other current liabilities” | $ 178 | $ 199 |
Non-current liabilities | ||
Derivative financial instruments | $ 8 | $ 11 |
EVENTS SUBSEQUENT TO DECEMBER_2
EVENTS SUBSEQUENT TO DECEMBER 31, 2018 (Details) $ in Thousands | Feb. 25, 2019USD ($)Options | Dec. 31, 2018USD ($)Option | Dec. 31, 2017USD ($)Option |
Disclosure of non-adjusting events after reporting period [line items] | |||
Number of options, granted | Option | 6,005,000 | 7,235,000 | |
Estimated fair value of the options on the grant date | $ | $ 1,692 | $ 3,499 | |
Stock Options | Major ordinary share transactions | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Number of options, granted | Options | 100,000 | ||
Estimated fair value of the options on the grant date | $ | $ 800 | ||
American Depository Shares | Major ordinary share transactions | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Number of ADSs, granted | Options | 178,000 |