Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 15, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | SteadyMed Ltd. | ||
Entity Central Index Key | 1,619,087 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
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 | Smaller Reporting Company | ||
Entity Public Float | $ 46.6 | ||
Entity Common Stock, Shares Outstanding | 26,572,719 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 32,453 | $ 23,215 |
Restricted cash | 15 | 15 |
Other accounts receivable and prepaid expenses | 492 | 152 |
Total current assets | 32,960 | 23,382 |
NON-CURRENT ASSETS | ||
Long term deposits | 73 | 122 |
Severance pay fund | 151 | 105 |
Property and equipment, net | 5,307 | 4,549 |
Total assets | 38,491 | 28,158 |
CURRENT LIABILITIES: | ||
Trade payables | 1,291 | 2,704 |
Deferred revenues | 1,066 | |
Other accounts payable and accrued expenses | 1,465 | 2,587 |
Total current liabilities | 2,756 | 6,357 |
NON-CURRENT LIABILITIES: | ||
Accrued severance pay | 203 | 154 |
Liability related to warrants | 11,343 | 7,078 |
Other accounts payable | 378 | 258 |
Total non-current liabilities | 11,924 | 7,490 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
SHAREHOLDERS' EQUITY: | ||
Ordinary Shares of NIS 0.01 par value-Authorized: 50,000,000 at December 31, 2016 and December 31, 2017; Issued and outstanding: 20,139,826 and 26,572,719 at December 31, 2016 and December 31, 2017, respectively | 69 | 51 |
Additional paid-in capital | 136,117 | 103,430 |
Accumulated deficit | (112,375) | (89,170) |
Total shareholders' equity | 23,811 | 14,311 |
Total liabilities and shareholders' equity | $ 38,491 | $ 28,158 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Ordinary Shares Disclosures | ||
Ordinary Shares, par value per share | ₪ 0.01 | ₪ 0.01 |
Ordinary Shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary share, Issued shares | 26,572,719 | 20,139,826 |
Ordinary Shares, shares outstanding | 26,572,719 | 20,139,826 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Licensing revenues | $ 1,065 | $ 1,065 |
Operating expenses: | ||
Research and development | 14,605 | 20,902 |
Sales and marketing | 1,741 | 1,921 |
General and administrative | 5,154 | 5,640 |
Total operating expenses | 21,500 | 28,463 |
Total operating loss | 20,435 | 27,398 |
Financial expense (income), net | 2,764 | (1,901) |
Loss before taxes on income | 23,199 | 25,497 |
Taxes on income | 6 | 372 |
Net loss | $ 23,205 | $ 25,869 |
Net loss per share: | ||
Basic and diluted net loss per Ordinary Share | $ (0.95) | $ (1.59) |
Weighted average number of Ordinary Shares used in computing basic and diluted net loss per share | 24,421,288 | 16,253,975 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary SharesPrivate placement | Ordinary SharesMaximum | [2] | Ordinary Shares | Additional paid-in capitalPrivate placement | Additional paid-in capital | Accumulated deficit | Private placement | Total | |
Balance, beginning at Dec. 31, 2015 | $ 34 | $ 91,814 | $ (63,301) | $ 28,547 | ||||||
Balance, beginning (in shares) at Dec. 31, 2015 | 13,585,810 | |||||||||
Increase (decrease) in Stockholders' Equity | ||||||||||
Stock-based compensation | 833 | 833 | ||||||||
Issuance of Ordinary Shares, net of issuance costs | $ 17 | $ 10,783 | $ 10,800 | |||||||
Issuance of Ordinary Shares, net of issuance costs (in shares) | 6,554,016 | |||||||||
Net loss | (25,869) | (25,869) | ||||||||
Balance, ending at Dec. 31, 2016 | $ 51 | 103,430 | (89,170) | 14,311 | ||||||
Balance, ending (in shares) at Dec. 31, 2016 | 20,139,826 | |||||||||
Increase (decrease) in Stockholders' Equity | ||||||||||
Stock-based compensation | 940 | 940 | ||||||||
Issuance of Ordinary Shares, net of issuance costs | $ 14 | $ 21,543 | $ 21,557 | [1] | ||||||
Issuance of Ordinary Shares, net of issuance costs (in shares) | 5,031,550 | |||||||||
Exercise of options into Ordinary Shares | $ 1 | 165 | 165 | |||||||
Exercise of options into Ordinary Shares (in shares) | 49,577 | |||||||||
Exercise of warrants into Ordinary Shares | $ 4 | 4,862 | 4,866 | |||||||
Exercise of warrants into Ordinary Shares (in shares) | 1,351,766 | |||||||||
Reclassification of liability related to warrants exercised | 5,177 | 5,177 | ||||||||
Net loss | (23,205) | (23,205) | ||||||||
Balance, ending at Dec. 31, 2017 | $ 69 | $ 136,117 | $ (112,375) | $ 23,811 | ||||||
Balance, ending (in shares) at Dec. 31, 2017 | 26,572,719 | |||||||||
[1] | Gross proceeds of $30,000 net of $6,994 that were classified as warrants and $1,449 issuance costs that were allocated to the shares. $441 of issuance costs were allocated to the warrants and recorded in the financial expense (income), net. | |||||||||
[2] | Represents an amount lower than $1. |
STATEMENTS OF CHANGES IN SHARE6
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Gross proceeds from issuance of common stock | $ 30,000 |
Proceeds from issuance of warrants | 6,994 |
Issuance costs, upon issuance of Ordinary shares in a private placement | 1,449 |
Financial expenses (income), net | |
Issuance cost of warrants | $ 441 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (23,205) | $ (25,869) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 940 | 833 |
Depreciation | 794 | 620 |
Impairment of property and equipment | 388 | 0 |
Re-evaluation of fair value of warrants to purchase Ordinary Shares | 2,448 | (2,491) |
Issuance costs related to warrants to purchase Ordinary Shares | 441 | 784 |
Decrease (increase) in other accounts receivable and prepaid expenses | (340) | 136 |
Decrease in deferred revenues | (1,065) | (1,065) |
Increase (decrease) in trade payables | (1,545) | 1,010 |
Increase (decrease) in other accounts payable and accrued expenses | (1,098) | 192 |
Net cash used in operating activities | (22,242) | (25,850) |
Cash flows from investing activities: | ||
Proceeds from maturity of investments in restricted cash | 308 | |
Purchase of property and equipment | (1,710) | (2,384) |
Release (investment) in long-term deposits | 49 | (61) |
Net cash used in investing activities | (1,661) | (2,137) |
Cash flows from financing activities: | ||
Proceeds from issuance of Ordinary Shares and warrants, net of issuance costs | 28,110 | 19,585 |
Repayment of loan | (234) | |
Proceeds from exercise of warrants into Ordinary Shares | 4,866 | |
Proceeds from exercise of options into Ordinary Shares | 165 | |
Net cash provided by financing activities | 33,141 | 19,351 |
Net increase (decrease) in cash and cash equivalents | 9,238 | (8,636) |
Cash and cash equivalents at the beginning of the year | 23,215 | 31,851 |
Cash and cash equivalents at the end of the year | 32,453 | 23,215 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchase of property and equipment | 231 | 201 |
Exercise of warrants into Ordinary Shares | 5,177 | |
Cash paid during the year: | ||
Cash paid for taxes and interest | $ 212 | $ 449 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2017 | |
GENERAL | |
GENERAL | NOTE 1:—GENERAL a. Nature of the business: SteadyMed Ltd. (the "Company") was incorporated and is located in Israel, commenced its operations on June 15, 2005 and, together with its wholly-owned subsidiary, SteadyMed Therapeutics, Inc. ("Inc."), and Inc.'s wholly-owned subsidiary, SteadyMed U.S. Holdings, Inc. ("Holdings"), is a specialty pharmaceutical company focused on the development and commercialization of therapeutic product candidates that address the limitations of market-leading products for certain orphan indications and in other well-defined, high-margin specialty markets. The Company's primary focus is to obtain approval for the sale of Trevyent®, its lead product candidate for the treatment of pulmonary arterial hypertension ("PAH") in the United States The Company submitted a New Drug Application ("NDA") to the United States Food and Drug Administration ("FDA") for Trevyent for the treatment of PAH on June 30, 2017. On August 28, 2017, the Company received a Refusal to File Letter from the FDA. Based on its preliminary review, the FDA determined that the NDA was not sufficiently complete to permit a substantive review. Specifically, the FDA requested further information on certain device specifications and performance testing and also requested additional design verification and validation testing on the final, to-be-marketed Trevyent product. On November 1, 2017, the Company held a Type A meeting with the FDA to gain clarification on these requests. Company management believes the meeting was constructive. Following its receipt and review of the minutes from this meeting, the Company finalized its revised operating plan and now expects to resubmit the NDA for the subcutaneous administration of Trevyent in the fourth quarter of 2018. The Company have also finalized a revised spending plan, to allow its current cash and cash equivalents to fund operations through the third quarter of 2019, when it believes it will receive FDA approval of the Trevyent NDA. The Company is also at an earlier stage of development with two products for the treatment of post-surgical and acute pain in the home setting. Its product candidates are enabled by its proprietary PatchPump®, which is a discreet, water resistant and disposable drug administration technology that is aseptically prefilled with liquid drug at the site of manufacture and pre-programmed to deliver an accurate, steady flow of drug to a patient, either subcutaneously or intravenously. Inc. and Holdings are located in the United States, and commenced operations on January 1, 2012 and March 25, 2015, respectively. The principal executive officers of the Company are located in the offices of Inc. and Holdings, and Inc.'s and Holdings' principal business activities are to provide executive management, treasury and administrative support functions to the Company. b. Liquidity: The Company is devoting substantially all of its efforts toward research, development, regulatory approvals and marketing of Trevyent®. In the course of such activities, the Company expects operating losses for the foreseeable future. For the year ended December 31, 2017, the Company incurred operating losses of $20,435 and negative cash flows from operating activities of $22,243. Until the Company has positive cash flows from operating activities, it will need to raise significant additional capital by way of the exercise of the remaining outstanding warrants issued in the 2016 and 2017 private placements, another private placement of debt and/or equity and/or a secondary public offering to allow the Company to continue as a going concern. These factors raise substantial doubt about the Company's ability to continue as a going concern. There is no assurance, however, that the Company will be successful in obtaining an adequate level of financing for its long-term needs, and therefore, there is a substantial doubt in the Company's ability to continue as a going concern. The accompanying financial statements in this annual report do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. c. On June 28, 2015, the Company entered into an Exclusive License and Supply Agreement (the "Agreement") with Cardiome Pharma Corp. and Correvio International Sárl (hereinafter collectively referred to as "Cardiome") pursuant to which an exclusive royalty bearing license to certain of the Company's patents relating to Trevyent® ("License") was granted to Cardiome in order to develop and commercialize Trevyent, if approved for the treatment of PAH, in certain regions outside the United States, specifically, Europe, Canada and the Middle East (the "Regions"). The Company provided certain services for Cardiome through the fourth quarter of 2017. Cardiome is responsible for the regulatory submissions and approvals and commercialization of Trevyent in the Regions. In addition, the Company has agreed to supply Trevyent as finished goods to Cardiome upon commercialization of Trevyent® in the Regions ("Supply Services"). Cardiome made a $3,000 upfront payment to the Company (the "Upfront") and the Agreement provides for future regulatory, third-party payor reimbursement approval and commercialization milestone payments to be achieved by Cardiome of up to $9,250 and a scaling royalty ranging from the low teens to mid-teens percent on future Trevyent sales by Cardiome in the Regions. In addition, there is a fixed price on finished goods to be supplied by the Company as part of the Supply Services. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:—SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared according to United States generally accepted accounting principles ("U.S. GAAP"). a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, share-based compensation cost, revenue recognition, as well as liability in respect of warrants to purchase Convertible Preferred Shares. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. b. Principles of consolidation: The consolidated financial statements include the accounts of the Company, Inc. and Holdings. All intercompany balances and transactions have been eliminated upon consolidation. c. Financial statements in U.S. dollars: The accompanying financial statements have been prepared in U.S. dollars. The Company's financing activities are conducted in U.S. dollars. Although a portion of the Company's expenses are denominated in New Israeli Shekels ("NIS") (mostly salaries and rent), and Pounds Sterling (consultant costs), a substantial portion of its expenses are denominated in U.S. dollars. The Company's management believes that the currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar ("dollar"); thus, the dollar is the functional currency of the Company. Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC No. 830, "Foreign Currency Matters". All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of comprehensive loss as financial income or expense, as appropriate. d. Cash and cash equivalents: The Company considers all highly liquid investments, which are readily convertible to cash with a maturity of three months or less at the date of acquisition, to be cash equivalents. Cash equivalents are comprised of money market funds and reverse repurchase agreements ("RRAs") which are fully collateralized and are generally outstanding for a short period of time with maturities significantly less than three months from the date of purchase. The required collateral for the RRAs is either U.S. Treasury or Federal Agency securities at a minimum rate of 102% of the RRAs' principal balance. e. Restricted cash: Restricted cash represents cash that is used as collateral for a Company's credit card issued by a commercial bank. f. Research and development costs: Research and development expenses are charged to the statement of comprehensive loss as incurred. Research and development expenses include costs incurred in performing research and development activities, including salaries and benefits, facilities cost, overhead costs, contract services, supplies and other outside costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. g. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates: % Computers and peripheral equipment 33 Laboratory equipment 7 - 15 Office furniture and equipment 6 Leasehold improvements Over the shorter of the lease term or useful economic life Property and equipment are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017 and 2016, $388 and $0 of assets in excess were written off. h. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. The vast majority of cash and cash equivalents of the Company, Inc. and Holdings is invested in short-term RRAs fully-collateralized by U.S. Treasury and Federal Agency securities. Such cash and cash equivalents in U.S. banks may be in excess of insured limits and are not insured in other jurisdictions. Generally, cash and cash equivalents may be redeemed and therefore a minimal credit risk exists with respect to these investments. i. Advertising costs: Advertising costs related to ongoing activities are expenses as incurred. For the years ended December 31, 2017 and 2016, advertising costs totaled $32 and $126, respectively. j. Revenue recognition: The Company generates revenue from the Agreement described in Note 1c. Pursuant to the Agreement, the Company identified the following performance deliverables at the inception of the Agreement: (i) an exclusive royalty bearing license to certain of the Company's patents related to Trevyent, which was transferred immediately upon signing of the Agreement, (ii) certain Services that were performed over a period until the fourth quarter of 2017 and (iii) Supply Services. The Company recognizes revenue in accordance with ASC 605-25, "Multiple-Element Arrangements" pursuant to which each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has "stand-alone value" to the customer. The arrangement's consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable which is based on the Estimated Selling Price ("ESP"). The License and Services are determined to be one unit of accounting since the License has no value to Cardiome on a stand-alone basis. The Supply Services are also determined to be a unit of accounting. The consideration allocated to the License and Services of $3,000 is recognized as revenue on a straight-line basis over the performance period of the Services. Contingent payments related to milestones will be recognized immediately upon satisfaction of the milestone and contingent payments related to royalties will be recognized in the period that the related sales have occurred. Revenues from product sales will be recognized when delivery has occurred, persuasive evidence of an arrangement exists, the vendor's fee is fixed or determinable, no future obligation exists and collectability is reasonably assumed. k. Income taxes: The Company accounts for income taxes in accordance with ASC No. 740, "Income Taxes," ("ASC 740"), using the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Interest and penalties, if any, are included as components of taxes on income. l. Severance pay: The liability for severance pay is calculated pursuant to Israel's Severance Pay Law (the "ISPL") based on the most recent salary of the employees located in Israel multiplied by the number of years of employment as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The liability for all of its employees in Israel is fully provided by monthly deposits with insurance policies and by an accrual. The deposited funds include interest accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to ISPL or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies, and includes immaterial interest on the investments underlying the insurance policies. Since inception, some of the Company's employees are included under Section 14 of the ISPL. Under this section, the employees are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Deposits under Section 14 are not recorded as an asset in the Company's balance sheet. Total expense related to severance pay is $66 and $71, for the years ended December 31, 2017 and 2016, respectively. m. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures", ("ASC 820"), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Observable inputs that reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Unobservable inputs reflecting the Company's own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amounts of cash and cash equivalents, restricted cash, other accounts receivable, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. Money Market Funds were classified as Level 1, Reverse Repurchase Agreements were classified as Level 2 as the fair value is determined using a discounted cash flow model with all significant inputs derived from or corroborated with observable market data. Warrants to purchase Ordinary Shares were classified as Level 3 as the fair value is determined using a Monte Carlo option pricing model, which takes into account the anti-dilution features of the warrants and certain subjective assumptions made by Management. The Company's financial assets and liabilities that are measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates: Assets: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — Liabilities: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) n. Accounting for stock-based compensation: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation Stock Compensation", ("ASC 718"), which requires companies to estimate the fair value of equity based payment awards on the date of grant using an option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite or derived service periods in the Company's consolidated statement of comprehensive loss. The Company recognizes compensation expense for the value of its awards granted based on the straight-line method over the requisite or derived service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. See also Note 2q. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model which requires a number of assumptions, of which the most significant are the Company's expected stock price volatility and the expected option term. Expected volatility was calculated based upon historical volatilities of similar entities in the related sector index. The expected option term represents the period that the Company's stock options are expected to be outstanding and is determined based on the simplified method until sufficient historical exercise data will support using expected life assumptions. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. o. Basic and diluted net loss per share: Basic and diluted net loss per share is computed based on the weighted-average number of Ordinary Shares outstanding during each year. Diluted net loss per share is computed based on the weighted average number of Ordinary Shares outstanding during the year, plus dilutive potential shares considered outstanding during the year, in accordance with ASC 260-10. Basic and diluted net loss per share of Ordinary Shares was the same for each period presented as the inclusion of all potential Ordinary Shares outstanding was anti-dilutive. For the years ended December 31, 2017 and 2016, all outstanding options, restricted share units and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. The total number of options, restricted share units and warrants that have been excluded from the calculation was 10,033,173 and 8,253,762 for the year ended December 31, 2017 and 2016, respectively. p. Legal and other contingencies: The Company accounts for its contingent liabilities in accordance with ASC 450. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2017 and 2016, the Company is not a party to any litigation that could have a material adverse effect on the Company's business, financial position, results of operations or cash flows. q. Recently adopted accounting pronouncements: 1. In March 2016, FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 affect all entities that issue share-based payment awards to their employees and involve multiple aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU 2016-09 during the three months ended March 31, 2017, at which time it changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis and the cumulative impact to the accumulated deficit as of January 1, 2017 is de minimus . r. Recently issued accounting pronouncements: 1. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), an updated standard on revenue recognition and issued subsequent amendments to the initial guidance in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08, 2016-10, 2016-12, and 2016-20, respectively. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods and services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services, In addition, the new standard requires expanded disclosures. The Company adopted the new standard effective January 1, 2018, using the modified retrospective transition method. The adoption of this standard does not have a material impact on our consolidated financial statements and the cumulative impact to the Company's accumulated deficit as of January 1, 2018 is nil. 2. In February 2016, FASB issued ASU 2016-02-Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASC 842 supersedes the previous leases standard, ASC 840. The standard is effective on January 1, 2019, with early adoption permitted. The Company currently anticipates adopting the new standard effective January 1, 2019 and is evaluating the impact of the adoption of this standard on its consolidated financial statements. 3. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company will adopt the new standard effective January 1, 2018, using the retrospective transition approach for all periods presented. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. 4. In May 2017, FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The Company is evaluating the impact of ASU 2017-09. 5. In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, Derivatives and Hedging, which changes the accounting treatment and the earnings per share calculation for certain instruments with down round features. The amendments in this update should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year of adoption or retrospective adjustment to each period presented. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. The Company is in the process of determining the impact the adoption will have on its consolidated financial statements. |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 3:—OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES Other accounts receivables and prepaid expense consist of the following: December 31, 2017 2016 Prepaid expenses and others $ $ Government authorities $ $ |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE 4:—PROPERTY AND EQUIPMENT, NET December 31, 2017 2016 Cost: Laboratory equipment $ $ Computers and peripheral equipment Office furniture and equipment Leasehold improvements $ $ Accumulated depreciation: Laboratory equipment $ $ Computers and peripheral equipment Office furniture and equipment Leasehold improvements $ $ Property and equipment, net $ $ Depreciation expense (including impairment of property and equipment) is $1,182 and $620 for the years ended December 31, 2017 and 2016, respectively. |
OTHER ACCOUNTS PAYABLE AND ACCR
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 5:—OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2017 2016 Employee and payroll accruals $ $ Accrued expenses $ $ |
WARRANTS TO PURCHASE ORDINARY S
WARRANTS TO PURCHASE ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2017 | |
WARRANTS TO PURCHASE ORDINARY SHARES | |
WARRANTS TO PURCHASE ORDINARY SHARES | NOTE 6:—WARRANTS TO PURCHASE ORDINARY SHARES The Company accounted for the warrants, described in note 9, according to the provisions of ASC 480 "Distinguishing Liabilities from Equity" and ASC 815-40, "Derivatives and Hedging—Contracts in Entity's Own Equity" and due to certain terms and conditions, the warrants are classified as a liability. The warrants are measured using the following assumptions of the Monte Carlo option pricing model. On May 25, 2017, 1,351,766 warrants, that were issued on August 2016, were exercised into ordinary shares for cash proceeds of $4,866 and the fair value of the warrants in the amount of $5,177 were reclassified from liability to equity. Warrants issued on August 2016: December 31, May 25, December 31, Risk-free interest rate(1) 1.30% - 2.05% 1.65% 1.5% - 1.84% Expected volatility(2) 57.1% - 77.6% 65.6% - 85% 65.5% - 85.5% Expected life (in years)(3) 3.59 4.19 3.14 - 4.59 Expected dividend yield(4) 0% 0% 0% Fair value per warrant: 1.60 3.83 1.08 Warrants issued on April 2017: December 31, April 25, Risk-free interest rate(1) 1.68% - 2.12% 1.82% - 1.87% Expected volatility(2) 76.3% - 82.4% 65.7% - 80.7% Expected life (in years)(3) 4.32 4.73 - 5 Expected dividend yield(4) 0% 0% Fair value per warrant: 1.20 2.78 (1) Risk free interest rate based on yield rates of non-index linked U.S. Federal Reserve treasury bonds. (2) Expected volatility was calculated based on actual historical share price movements of companies in the same industry over a term that is equivalent to the expected term of the warrants. (3) Expected life was based on the contractual term of the warrants. (4) Expected dividend yield was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future. The Company re-measured these warrants at fair value as of the exercise date, May 25, 2017 and as of December 31, 2017 and consequently, during the year ended December 31, 2017, the Company recorded $2,448 as a financial expense as a result of increase in the warrants' fair value. Total fair value of the liability related to warrants as of December 31, 2017, is $11,343. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 7:—COMMITMENTS AND CONTINGENT LIABILITIES a. On August 23, 2017, the Company extended its lease agreement for the Israeli offices by 12 months ending December 31, 2018. The Company has an option to extend the lease term for an additional three periods of twelve months each. Inc.'s lease agreement for its U.S. offices has a four-year term ending May 2019. As of December 31, 2017, the future minimum aggregate lease commitments under non-cancelable operating lease agreements are as follows: As of December 31, Total 2018 $ 2019 $ b. During the years 2005-2010, the Company received grants under the royalty-bearing programs administered by the Office of the Chief Scientist ("OCS"), and from the Incubator, RAD BioMed Ltd. In May 2015, the OCS approved the Company's request to transfer manufacturing rights outside of Israel, noting that the Company would be required to pay an increased royalty rate without providing any specifics. Therefore, if income will be generated from the funded research program, the Company will be obligated to pay royalties on such revenue at a rate between 3% to 4% for the first three years and between 3.5% to 4.5% commencing the fourth year (based on the portion of manufacturing out of Israel while non-product related revenues are subject to the lower end of the ranges) and up to 150% to 300% of the amount received, linked to the LIBOR. The revenues under the Agreement with Cardiome are subject to royalties under the above programs. As of December 31, 2017, the total amount of grants received from the OCS and the Incubator, including interest, was $782 and royalties paid and accrued amounted to $32, $23 and $35 during the years ended December 31, 2017, 2016 and 2015 respectively. In the event that intellectual property rights are deemed to be transferred out of Israel, the grants received from the OCS and the Incubator may become a loan to be repaid immediately at up to 600% of the grants amounts. Currently, the Company's management believes no intellectual property has been transferred out of Israel and disclosure of the Company's know how is made solely in connection with the transfer of manufacturing rights of the Company's products to subcontractors. Accordingly, no provision has been recorded in such respect. c. Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2017, the Company had non-cancelable commitments to suppliers for purchases totaling $1,500. d. The Company has a commercial dispute with one of its suppliers as a result of the Company's termination of a development agreement in 2017, whereby the supplier alleges wrongful termination and certain breaches of the agreement by the Company. As of December 31, 2017, the Company believes that the claims have no merit and the dispute is in its early stages. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2017 | |
TAXES ON INCOME | |
TAXES ON INCOME | NOTE 8:—TAXES ON INCOME a. Tax rates applicable to the Company: 1. Corporate Tax rate in Israel: Taxable income of the Company is subject to the Israeli corporate tax of 24% for 2017. In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018. 2. Corporate tax rate in U.S.: Taxable income of the Company is subject to U.S. federal statutory income tax rate of 35.0% for 2017. On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law and the new legislation contains several key tax provisions, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate from 35% to 21% effective January 1, 2018, among others. The impact of the Tax Act resulted in re-measurement of deferred tax assets based on the rates as they are expected to be reversed in the future. This re-measurement was fully offset by a valuation of allowance (which is de minimus ) resulting in no impact to the Company's income tax expense for year ended December 31 2017. The Company's subsidiaries in the United States do not have any foreign subsidiaries, and therefore, the remaining provisions of the Tax Act have no material impact on the Company's results. b. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the "Law"): On April 1, 2005, an amendment to the Law came into effect ("the Amendment") and has significantly changed the provisions of the Law. The Amendment limits the scope of enterprises which may be approved by the Investment Center by setting criteria for the approval of a facility as an Approved Enterprise, such as provisions generally requiring that at least 25% of the Approved Enterprise's income will be derived from export. Additionally, the Amendment enacted major changes in the manner in which tax benefits are awarded under the Investment Law so that companies no longer require Investment Center approval in order to qualify for tax benefits. During 2013, the Company elected 2012 as a "Year of Election" to receive "Beneficiary Enterprise" status. Under the Law and its Amendment, the Company is entitled to various tax benefits, defined by this law, under the "Alternative Benefits" track as a Beneficiary Enterprise. Pursuant to the beneficiary program, the Company is entitled to a tax benefit period of seven to ten years on income derived from this program as follows: the Company is fully tax exempt for a period of the first two years and for the remaining five to eight subsequent years is subject to tax at a rate of 10%-25% (based on the percentage of foreign ownership of the Company). The benefit period begins in the year in which taxable income is first earned, limited to 12 years from the Year of Election. If dividends are distributed out of tax exempt profits, the Company will then become liable for tax at the rate applicable to its profits from the Beneficiary Enterprise in the year in which the income was earned, as if it had not chosen the alternative track of benefits. The dividend recipient is subject to withholding tax at the rate of 15% applicable to dividends from Beneficiary enterprises, if the dividend is distributed during the tax benefits period or within twelve years thereafter. This limitation does not apply to a foreign investors' company. The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business. The above benefits are conditioned upon the fulfillment of the conditions stipulated by the Law and regulations published thereunder, including certain restrictions on manufacturing outside of Israel. In the event of failure to comply with these conditions, the benefits may be canceled and the Company may be required to refund the amount of the benefits, in whole or in part, including interest and linked to changes in the Israeli CPI. As a result of the amendment, tax-exempt income generated under the provisions of the Law will subject the Company to taxes upon distribution or liquidation and the Company may be required to record a deferred tax liability with respect to such tax-exempt income. Through December 31, 2017 and 2016, the Company had not generated income under the provision of the Law. Amendment to the Law for the Encouragement of Capital Investments, 1959 (Amendments 68 and 71): In December 2010, the "Knesset" (Israeli Parliament) passed the Law for Economic Policy for 2011 and 2012 (Amended Legislation), 2011 ("the Amendment"), which prescribes, among others, amendments in the Law. The Amendment became effective as of January 1, 2011. According to the Amendment, the benefit tracks in the Law were modified and a flat tax rate applies to the Company's entire privileged income under its status as a privileged company with a privileged enterprise. Commencing from the 2011 tax year, the Company can elect (without possibility of reversal) to apply the Amendment in a certain tax year and from that year and thereafter, it will be subject to the amended tax rates. According to the Amendment, the tax rate on preferred income from a preferred enterprise in 2014 and thereafter will be 16% (in development area A—9%). The Amendment also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise's earnings as above will be subject to tax at a rate of 20%. The Company estimates that the effect of the change in tax rates will not have a material impact on the consolidated financial statements. Amendment to the Law for the couragement of Capital Investments, 1959 ("Amendment 73") In December 2016, the Knesset passed Amendment 73 to the Investment Law which included a number of changes to the Investment Law regimes. Certain changes were scheduled to come into effect beginning January 1, 2017, provided that regulations are promulgated by the Finance Ministry to implement the "Nexus Principles" based on OECD guidelines recently published as part of the Base Erosion and Profit Shifting (BEPS) project. The regulations were approved on May 1, 2017, and accordingly, these changes have come into effect. Applicable benefits under the new regime include: Introduction of a benefit regime for "Preferred Technology enterprises", granting a 12% tax rate in central Israel on income deriving from Intellectual Property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditures and R&D employees, as well as having at least 25% of annual income derived from exports. Preferred Technological Enterprise ("PTE") is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. A 12% capital gains tax rate on the sale of a preferred intangible asset to a foreign affiliated enterprise, provided that the asset was initially purchased from a foreign resident at an amount of NIS 200 million or more. A withholding tax rate of 20% for dividends paid from PTE income (with an exemption from such withholding tax applying to dividends paid to an Israeli company). Such rate may be reduced to 4% on dividends paid to a foreign resident company, subject to certain conditions regarding percentage of foreign ownership of the distributing entity. The Company estimates that the effect of the change in tax rates will not have a material impact on the consolidated financial statements. c. Losses for tax purposes: The Company has accumulated net operating losses for Israeli income tax purposes as of December 31, 2017 of approximately $102,808. The net operating losses may be carried forward and offset against taxable income in the future for an indefinite period. d. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows: December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ $ Research and development credits Accrued social benefits and other Issuance costs Deferred tax assets before valuation allowance Valuation allowance ) ) Net deferred tax asset $ — $ — In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuation allowance at December 31, 2017 and 2016. e. Loss (income) before taxes on income consists of the following: December 31, 2017 2016 Domestic $ $ Foreign ) ) $ $ f. The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes. g. Uncertain tax positions: A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: December 31, 2017 2016 Unrecognized tax benefits, beginning of year $ $ Increase in unrecognized tax benefits for current year — $ $ As of December 31, 2017, the Company is subject to Israeli income tax audits for the tax years 2014 through 2017 and Inc. and Holdings are subject to U.S. federal income tax audits for the tax years of 2012 through 2017. h. Taxes on income for the years ended December 31, 2017 and 2016 are comprised mainly of taxes incurred as a result of the implementation of the cost plus services agreement with Inc. and Holdings, offset by tax credits for qualified research and development activities, that the Company is entitled to in 2017. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 9:—SHAREHOLDERS' EQUITY a. Share capital is composed as follows: December 31, 2017 December 31, 2016 Authorized Issued and Authorized Issued and Ordinary share of NIS 0.01 par value Total The Ordinary Shares entitle their holders to one vote per share on all matters to be voted on by the shareholders of the Company, to receive dividends according to Board of Directors' decision, to participate in the balance of the Company's assets remaining after liquidation, dissolution or winding up, ratably in proportion to the number of shares of Ordinary Shares held by them, to increase or decrease Ordinary Shares, any other preferences, voting powers, relative, participating, optional or other special rights and privileges right compulsorily granted by the law to the holders of Ordinary Shares. b. On July 29, 2016, the Company entered into a subscription agreement with investors for a private placement of the Company's Ordinary Shares, pursuant to which the Company agreed to issue and sell the following securities to the investors for an aggregate price of up to approximately $32,000: (i) in the initial tranche, an aggregate of 6,554,016 Ordinary Shares of the Company, nominal value NIS 0.01 per share (the "Shares"), and warrants to purchase up to 6,554,016 additional Ordinary Shares of the Company, for $3.255 per unit (the "Warrants"), and (ii) in the second tranche, an aggregate of up to approximately $10,700 of Ordinary Shares of the Company at a purchase price equal to the higher of (x) $3.13 or (y) the average closing price of Ordinary Shares of the Company on Nasdaq over the 30 trading days immediately preceding the closing date of the second tranche (the "Private Placement") with no warrants. The second tranche will occur at the election of the Company following achievement by the Company of certain milestones related to its lead drug product candidate Trevyent. The first tranche of the Private Placement closed on August 4, 2016, pursuant to which the Company received gross proceeds of approximately $21,333. Two of the Company's board members, who are also shareholders in the Company, invested a total amount of $5,133. The related issuance costs in respect of the private placement were $1,748. The warrants issued are exercisable immediately upon issuance and may be exercised at any time prior to August 2021 at an exercise price of $3.5995 per share (see also note 6). The Company granted to the participants certain registration rights related to the Shares and Warrants issued in this Private Placement. In connection therewith, the Company filed a registration statement for the resale of the Shares and Ordinary Shares underlying the Warrants, which was declared effective by the U.S. Securities and Exchange Commission on September 21, 2016. If the Company fails to maintain the effectiveness of the registration statement, it may incur liquidated damages for each participant of up to 5% of the pro-rata purchase price of the Shares. c. On April 20, 2017, the Company entered into a subscription agreement with investors for a private placement of the Company's Ordinary Shares, pursuant to which the Company agreed to issue and sell to the investors for an aggregate price of up to approximately $30,000 of the following securities: (i) 5,031,550 Ordinary Shares of the Company, nominal value NIS 0.01 per share for $5.90 per share and (ii) 2,515,775 warrants to purchase additional Ordinary Shares of the Company, for $0.125 per warrant (the "2017 Private Placement"). The 2017 Private Placement closed on April 25, 2017, pursuant to which the Company received approximately $28,110, net of issuance costs of $1,890. One of the Company's board members, who is also a shareholder in the Company, invested a total amount of $2,999. The warrants issued are exercisable immediately upon issuance and may be exercised at any time prior to April 2022 at an exercise price of $6.785 per share. The Company filed a registration statement for the resale of the shares and warrant shares issued in the Private Placement on May 24, 2017, which was declared effective on June 6, 2017. d. Stock-based compensation: On June 18, 2009, a Stock Option Plan (the "2009 Plan") was adopted by the Board of Directors of the Company, under which options to purchase up to 55,971 Ordinary Shares have been reserved. Such pool was increased over the years and as of December 31, 2014, options to purchase up to 978,655 Ordinary Shares were authorized. The 2009 Plan was adopted in accordance with the amended sections 102 and 3(i) of Israel's Income Tax Ordinance. Under the 2009 Plan, options to purchase Ordinary Shares of the Company may be granted to employees, advisors, directors, consultants and service providers of the Company or any subsidiary or affiliate. The default vesting schedule is up to three years, subject to the continuation of employment or service. Each option may be exercised into Ordinary Shares during a period of seven years from the date of grant, unless a different term is provided in the option agreement. On April 30, 2013, the 2013 Stock Incentive Sub Plan (the "2013 Sub Plan") was adopted by the Board of Directors of the Company, which set forth the terms for the grant of stock awards to Inc.'s employees or US non-employees. On January 25, 2015, the Board of Directors reserved an additional 1,072,879 Ordinary Shares out of its authorized and unissued share capital for future option grants under the 2009 Plan. On February 20, 2015, the Company's Board of Directors approved the replacement of the 2009 Plan and 2013 Sub Plan by adopting the Amended and Restated 2009 Stock Incentive Plan. This action was approved by the shareholders on March 1, 2015. The 2009 Plan also allows the issuance of restricted stock units. During the year ended December 31, 2017, the Company's Board of Directors approved grant of 382,414 options to certain employees to purchase the Company's Ordinary Shares at an exercise price of $3.35 to $6.5. During the year ended December 31, 2017, the Company's Board of Directors approved grant of 247,095 restricted share units to certain employees to purchase the Company's Ordinary Shares at an exercise price of $3.32. On December 28, 2017, the Company's annual general meeting of shareholders approved among others, a grant of 126,174 options to its directors to purchase the Company's Ordinary Shares at an exercise price of $3.65. On October 5 2017, the Company held its 2016 Annual General Meeting of Shareholders. Among other things, the shareholders approved an amendment to the 2009 Plan providing for the four percent (4%) automatic annual increase in the authorized number of Ordinary Shares available for future grant under the 2009 Plan to begin on January 1, 2017 instead of January 1, 2019. Transactions related to the grant of options and restricted stock units to employees and directors under the Amended and Restated 2009 Stock Incentive Plan during the year ended December 31, 2017, were as follows: Number of Weighted Weighted Aggregate $ (years) $ Options outstanding at January 1, 2017 — Options granted Options exercised ) Options expired ) Options outstanding at end of year $ Options vested at end of year $ A summary of restricted share units activity for the year ended December 31, 2017, is as follows: Number of Weighted Aggregate Unvested at January 1, 2017 — $ — $ — Restricted share units granted Unvested at end of year $ $ 50% of the restricted share units will vest on June 30, 2018 and the remainder will vest on the approval of the Trevyent NDA by the FDA. The options outstanding as of December 31, 2017 have been presented by exercise prices, as follows: Exercise price range Options Weighted Options Weighted (years) (years) $2.70 - $4.38 $5.55 - $7.45 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the deemed fair value of the Company's Ordinary Shares on the last day of fiscal 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2017. This amount is impacted by the changes in the fair market value of the Company's shares. The weighted average grant date fair value of options granted during the years ended December 31, 2017 and 2016 was $2.91 and $2.94, respectively. The following table presents the assumptions used to estimate the fair values of the options granted in the periods presented: Year ended December 31 2017 2016 Volatility 82.8% - 93.9% 79.7% - 98.9% Risk-free interest rate 1.95% - 2.28% 1.25% - 2.17% Dividend yield 0% 0% Expected life (years) 5.87 5.87 As of December 31, 2017, the total unrecognized compensation costs were $2,689 which is expected to be recognized over a weighted average period of approximately 2.04 years. The total compensation cost related to all of the Company's equity-based awards, recognized during the years ended December 31, 2017 and 2016 was comprised as follows: Year ended 2017 2016 Research and development $ $ Sales and Marketing General and administrative $ $ |
SUPPLEMENTAL INFORMATION
SUPPLEMENTAL INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
SUPPLEMENTAL INFORMATION | |
SUPPLEMENTAL INFORMATION | NOTE 10:—SUPPLEMENTAL INFORMATION The Company's business is currently comprised of one operating segment. The nature of the products and services provided by the Company and the type of customers for these products and services are similar. Operations in Israel and the United States include research and development, sales and marketing and business development. The Company follows ASC 280, "Segment Reporting". Total revenues are attributed to geographic areas based on the location of the end customer. a. The following represents the total revenue and long-lived assets for the years ended December 31, 2017 and 2016: Year ended Year ended Licensing Revenue: Europe $ $ Total revenue $ $ December 31, 2017 2016 Long-lived assets: SteadyMed Ltd. $ $ SteadyMed Therapeutics, Inc. Total long-lived assets $ $ Year ended Year ended Sales to a single customer exceeding 10%: Cardiome % % b. Financial expense (income), net: Year ended 2017 2016 Financial expenses: Interest expense and bank fees $ $ Reevaluation of fair value of warrants to purchase Ordinary Shares — Foreign currency translation adjustments — Issuance costs allocated to warrants $ $ Financial income: Interest income $ ) $ ) Reevaluation of fair value of warrants to purchase Ordinary Shares — ) Foreign currency translation adjustments — ) $ ) $ ) Total financial income, net $ $ ) c. The net loss and the weighted average number of shares used in computing basic and diluted net loss per share for the years ended December 31, 2017 and 2016, is as follows: Year ended 2017 2016 Numerator: Net loss $ $ Net loss available to shareholders of Ordinary Shares $ $ Denominator: Weighted average number of Ordinary Shares used in computing basic and diluted net loss per share |
LITIGATION
LITIGATION | 12 Months Ended |
Dec. 31, 2017 | |
LITIGATION | |
LITIGATION | NOTE 11:—LITIGATION In October 2015, the Company filed an Inter Partes Review with the Patent Trial and Appeal Board, or PTAB, of the United States Patent and Trademark Office to invalidate the U.S. Patent No. 8,497,393 ('393 patent) granted to United Therapeutics. This patent relates to a process to prepare prostacyclin derivatives such as treprostinil. Treprostinil is used in Trevyent. The PTAB initiated the Inter Parties Review in April 2016 and on March 31, 2017, the PTAB ruled in our favor, invalidating all of the claims of the '393 patent. United Therapeutics appealed the ruling to the Circuit Court of Appeals in Washington, D.C., and a hearing on the matter was held on November 7, 2017. On November 14, 2017, the Court of Appeals upheld the PTAB ruling in our favor without issuing an opinion. On February, 9, 2018, United Therapeutics filed a petition of certiorari with the U.S. Supreme Court asking for a review of the appellate ruling. The Company's response to that petition is due on April 6, 2018. The Company is not able to estimate the outcome of the appeal. |
SIGNIFICANT ACCOUNTING POLICI19
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of accounting | The consolidated financial statements are prepared according to United States generally accepted accounting principles ("U.S. GAAP"). |
Use of estimates | a. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, share-based compensation cost, revenue recognition, as well as liability in respect of warrants to purchase Convertible Preferred Shares. The Company's management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of consolidation | b. Principles of consolidation: The consolidated financial statements include the accounts of the Company, Inc. and Holdings. All intercompany balances and transactions have been eliminated upon consolidation. |
Financial statements in U.S. dollars | c. Financial statements in U.S. dollars: The accompanying financial statements have been prepared in U.S. dollars. The Company's financing activities are conducted in U.S. dollars. Although a portion of the Company's expenses are denominated in New Israeli Shekels ("NIS") (mostly salaries and rent), and Pounds Sterling (consultant costs), a substantial portion of its expenses are denominated in U.S. dollars. The Company's management believes that the currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar ("dollar"); thus, the dollar is the functional currency of the Company. Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC No. 830, "Foreign Currency Matters". All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of comprehensive loss as financial income or expense, as appropriate. |
Cash and cash equivalents | d. Cash and cash equivalents: The Company considers all highly liquid investments, which are readily convertible to cash with a maturity of three months or less at the date of acquisition, to be cash equivalents. Cash equivalents are comprised of money market funds and reverse repurchase agreements ("RRAs") which are fully collateralized and are generally outstanding for a short period of time with maturities significantly less than three months from the date of purchase. The required collateral for the RRAs is either U.S. Treasury or Federal Agency securities at a minimum rate of 102% of the RRAs' principal balance. |
Restricted cash | e. Restricted cash: Restricted cash represents cash that is used as collateral for a Company's credit card issued by a commercial bank. |
Research and development costs | f. Research and development costs: Research and development expenses are charged to the statement of comprehensive loss as incurred. Research and development expenses include costs incurred in performing research and development activities, including salaries and benefits, facilities cost, overhead costs, contract services, supplies and other outside costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. |
Property and equipment | g. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates: % Computers and peripheral equipment 33 Laboratory equipment 7 - 15 Office furniture and equipment 6 Leasehold improvements Over the shorter of the lease term or useful economic life Property and equipment are reviewed for impairment in accordance with ASC No. 360, "Property, Plant and Equipment," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the years ended December 31, 2017 and 2016, $388 and $0 of assets in excess were written off. |
Concentrations of credit risk | h. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and restricted cash. The vast majority of cash and cash equivalents of the Company, Inc. and Holdings is invested in short-term RRAs fully-collateralized by U.S. Treasury and Federal Agency securities. Such cash and cash equivalents in U.S. banks may be in excess of insured limits and are not insured in other jurisdictions. Generally, cash and cash equivalents may be redeemed and therefore a minimal credit risk exists with respect to these investments. |
Advertising costs | i. Advertising costs: Advertising costs related to ongoing activities are expenses as incurred. For the years ended December 31, 2017 and 2016, advertising costs totaled $32 and $126, respectively. |
Revenue recognition | j. Revenue recognition: The Company generates revenue from the Agreement described in Note 1c. Pursuant to the Agreement, the Company identified the following performance deliverables at the inception of the Agreement: (i) an exclusive royalty bearing license to certain of the Company's patents related to Trevyent, which was transferred immediately upon signing of the Agreement, (ii) certain Services that were performed over a period until the fourth quarter of 2017 and (iii) Supply Services. The Company recognizes revenue in accordance with ASC 605-25, "Multiple-Element Arrangements" pursuant to which each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has "stand-alone value" to the customer. The arrangement's consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable which is based on the Estimated Selling Price ("ESP"). The License and Services are determined to be one unit of accounting since the License has no value to Cardiome on a stand-alone basis. The Supply Services are also determined to be a unit of accounting. The consideration allocated to the License and Services of $3,000 is recognized as revenue on a straight-line basis over the performance period of the Services. Contingent payments related to milestones will be recognized immediately upon satisfaction of the milestone and contingent payments related to royalties will be recognized in the period that the related sales have occurred. Revenues from product sales will be recognized when delivery has occurred, persuasive evidence of an arrangement exists, the vendor's fee is fixed or determinable, no future obligation exists and collectability is reasonably assumed. |
Income taxes | k. Income taxes: The Company accounts for income taxes in accordance with ASC No. 740, "Income Taxes," ("ASC 740"), using the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Interest and penalties, if any, are included as components of taxes on income. |
Severance pay | l. Severance pay: The liability for severance pay is calculated pursuant to Israel's Severance Pay Law (the "ISPL") based on the most recent salary of the employees located in Israel multiplied by the number of years of employment as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The liability for all of its employees in Israel is fully provided by monthly deposits with insurance policies and by an accrual. The deposited funds include interest accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to ISPL or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies, and includes immaterial interest on the investments underlying the insurance policies. Since inception, some of the Company's employees are included under Section 14 of the ISPL. Under this section, the employees are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. Deposits under Section 14 are not recorded as an asset in the Company's balance sheet. Total expense related to severance pay is $66 and $71, for the years ended December 31, 2017 and 2016, respectively. |
Fair value of financial instruments | m. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures", ("ASC 820"), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2: Observable inputs that reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Unobservable inputs reflecting the Company's own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amounts of cash and cash equivalents, restricted cash, other accounts receivable, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. Money Market Funds were classified as Level 1, Reverse Repurchase Agreements were classified as Level 2 as the fair value is determined using a discounted cash flow model with all significant inputs derived from or corroborated with observable market data. Warrants to purchase Ordinary Shares were classified as Level 3 as the fair value is determined using a Monte Carlo option pricing model, which takes into account the anti-dilution features of the warrants and certain subjective assumptions made by Management. The Company's financial assets and liabilities that are measured at fair value on a recurring basis, consisted of the following types of instruments as of the following dates: Assets: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — Liabilities: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) |
Accounting for stock-based compensation | n. Accounting for stock-based compensation: The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation Stock Compensation", ("ASC 718"), which requires companies to estimate the fair value of equity based payment awards on the date of grant using an option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite or derived service periods in the Company's consolidated statement of comprehensive loss. The Company recognizes compensation expense for the value of its awards granted based on the straight-line method over the requisite or derived service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. See also Note 2q. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model which requires a number of assumptions, of which the most significant are the Company's expected stock price volatility and the expected option term. Expected volatility was calculated based upon historical volatilities of similar entities in the related sector index. The expected option term represents the period that the Company's stock options are expected to be outstanding and is determined based on the simplified method until sufficient historical exercise data will support using expected life assumptions. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. |
Basic and diluted net loss per share | o. Basic and diluted net loss per share: Basic and diluted net loss per share is computed based on the weighted-average number of Ordinary Shares outstanding during each year. Diluted net loss per share is computed based on the weighted average number of Ordinary Shares outstanding during the year, plus dilutive potential shares considered outstanding during the year, in accordance with ASC 260-10. Basic and diluted net loss per share of Ordinary Shares was the same for each period presented as the inclusion of all potential Ordinary Shares outstanding was anti-dilutive. For the years ended December 31, 2017 and 2016, all outstanding options, restricted share units and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. The total number of options, restricted share units and warrants that have been excluded from the calculation was 10,033,173 and 8,253,762 for the year ended December 31, 2017 and 2016, respectively. |
Legal and other contingencies | p. Legal and other contingencies: The Company accounts for its contingent liabilities in accordance with ASC 450. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2017 and 2016, the Company is not a party to any litigation that could have a material adverse effect on the Company's business, financial position, results of operations or cash flows. |
Recently adopted accounting pronouncements | q. Recently adopted accounting pronouncements: 1. In March 2016, FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 affect all entities that issue share-based payment awards to their employees and involve multiple aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU 2016-09 during the three months ended March 31, 2017, at which time it changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective basis and the cumulative impact to the accumulated deficit as of January 1, 2017 is de minimus . |
Recently issued accounting pronouncements | r. Recently issued accounting pronouncements: 1. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), an updated standard on revenue recognition and issued subsequent amendments to the initial guidance in March 2016, April 2016, May 2016 and December 2016 within ASU 2016-08, 2016-10, 2016-12, and 2016-20, respectively. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods and services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services, In addition, the new standard requires expanded disclosures. The Company adopted the new standard effective January 1, 2018, using the modified retrospective transition method. The adoption of this standard does not have a material impact on our consolidated financial statements and the cumulative impact to the Company's accumulated deficit as of January 1, 2018 is nil. 2. In February 2016, FASB issued ASU 2016-02-Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASC 842 supersedes the previous leases standard, ASC 840. The standard is effective on January 1, 2019, with early adoption permitted. The Company currently anticipates adopting the new standard effective January 1, 2019 and is evaluating the impact of the adoption of this standard on its consolidated financial statements. 3. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company will adopt the new standard effective January 1, 2018, using the retrospective transition approach for all periods presented. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. 4. In May 2017, FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The Company is evaluating the impact of ASU 2017-09. 5. In July 2017, FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, Derivatives and Hedging, which changes the accounting treatment and the earnings per share calculation for certain instruments with down round features. The amendments in this update should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year of adoption or retrospective adjustment to each period presented. This update is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. The Company is in the process of determining the impact the adoption will have on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI20
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Property and equipment rates of estimated useful lives | % Computers and peripheral equipment 33 Laboratory equipment 7 - 15 Office furniture and equipment 6 Leasehold improvements Over the shorter of the lease term or useful economic life |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | Assets: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Reverse Repurchase Agreements $ $ — $ $ — Money Market Funds — — Total financial assets $ $ $ $ — Liabilities: December 31, 2016 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) December 31, 2017 Fair value measurements Description Fair value Level 1 Level 2 Level 3 Warrants to purchase Ordinary Shares $ ) $ — $ — $ ) Total financial liabilities $ ) $ — $ — $ ) |
OTHER ACCOUNTS RECEIVABLE AND21
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | |
Schedule of other accounts receivables and prepaid expense | December 31, 2017 2016 Prepaid expenses and others $ $ Government authorities $ $ |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | December 31, 2017 2016 Cost: Laboratory equipment $ $ Computers and peripheral equipment Office furniture and equipment Leasehold improvements $ $ Accumulated depreciation: Laboratory equipment $ $ Computers and peripheral equipment Office furniture and equipment Leasehold improvements $ $ Property and equipment, net $ $ |
OTHER ACCOUNTS PAYABLE AND AC23
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
Schedule of other accounts payable and accrued expenses | December 31, 2017 2016 Employee and payroll accruals $ $ Accrued expenses $ $ |
WARRANTS TO PURCHASE ORDINARY24
WARRANTS TO PURCHASE ORDINARY SHARES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants issued on August 2016: | |
Warrants to purchase ordinary shares | |
Schedule of assumptions used in estimating fair value of warrants | December 31, May 25, December 31, Risk-free interest rate(1) 1.30% - 2.05% 1.65% 1.5% - 1.84% Expected volatility(2) 57.1% - 77.6% 65.6% - 85% 65.5% - 85.5% Expected life (in years)(3) 3.59 4.19 3.14 - 4.59 Expected dividend yield(4) 0% 0% 0% Fair value per warrant: 1.60 3.83 1.08 (1) Risk free interest rate based on yield rates of non-index linked U.S. Federal Reserve treasury bonds. (2) Expected volatility was calculated based on actual historical share price movements of companies in the same industry over a term that is equivalent to the expected term of the warrants. (3) Expected life was based on the contractual term of the warrants. (4) Expected dividend yield was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future. |
Warrants issued on April 2017: | |
Warrants to purchase ordinary shares | |
Schedule of assumptions used in estimating fair value of warrants | December 31, April 25, Risk-free interest rate(1) 1.68% - 2.12% 1.82% - 1.87% Expected volatility(2) 76.3% - 82.4% 65.7% - 80.7% Expected life (in years)(3) 4.32 4.73 - 5 Expected dividend yield(4) 0% 0% Fair value per warrant: 1.20 2.78 (1) Risk free interest rate based on yield rates of non-index linked U.S. Federal Reserve treasury bonds. (2) Expected volatility was calculated based on actual historical share price movements of companies in the same industry over a term that is equivalent to the expected term of the warrants. (3) Expected life was based on the contractual term of the warrants. (4) Expected dividend yield was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future. |
COMMITMENTS AND CONTINGENT LI25
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
Summary of future minimum aggregate lease commitments | As of December 31, Total 2018 $ 2019 $ |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
TAXES ON INCOME | |
Schedule of significant components of deferred tax assets | December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $ $ Research and development credits Accrued social benefits and other Issuance costs Deferred tax assets before valuation allowance Valuation allowance ) ) Net deferred tax asset $ — $ — |
Schedule of loss (income) before taxes on income | December 31, 2017 2016 Domestic $ $ Foreign ) ) $ $ |
Reconciliation of the total amounts of unrecognized tax benefits | December 31, 2017 2016 Unrecognized tax benefits, beginning of year $ $ Increase in unrecognized tax benefits for current year — $ $ |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHAREHOLDERS' EQUITY | |
Schedule of share capital | December 31, 2017 December 31, 2016 Authorized Issued and Authorized Issued and Ordinary share of NIS 0.01 par value Total |
Schedule of stock options | Number of Weighted Weighted Aggregate $ (years) $ Options outstanding at January 1, 2017 — Options granted Options exercised ) Options expired ) Options outstanding at end of year $ Options vested at end of year $ |
Summary of restricted share units activity | Number of Weighted Aggregate Unvested at January 1, 2017 — $ — $ — Restricted share units granted Unvested at end of year $ $ |
Schedule of options outstanding based on exercise price | Exercise price range Options Weighted Options Weighted (years) (years) $2.70 - $4.38 $5.55 - $7.45 |
Schedule of the assumptions used to estimate the fair values of the options granted | Year ended December 31 2017 2016 Volatility 82.8% - 93.9% 79.7% - 98.9% Risk-free interest rate 1.95% - 2.28% 1.25% - 2.17% Dividend yield 0% 0% Expected life (years) 5.87 5.87 |
Schedule of total compensation cost related to all of the Company's equity-based awards | Year ended 2017 2016 Research and development $ $ Sales and Marketing General and administrative $ $ |
SUPPLEMENTAL INFORMATION (Table
SUPPLEMENTAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SUPPLEMENTAL INFORMATION | |
Schedule of revenue by geographic area | Year ended Year ended Licensing Revenue: Europe $ $ Total revenue $ $ |
Schedule of long-lived assets by entities | December 31, 2017 2016 Long-lived assets: SteadyMed Ltd. $ $ SteadyMed Therapeutics, Inc. Total long-lived assets $ $ |
Schedule of sales to single customer exceeding 10% | Year ended Year ended Sales to a single customer exceeding 10%: Cardiome % % |
Schedule of financial expense (income), net | Year ended 2017 2016 Financial expenses: Interest expense and bank fees $ $ Reevaluation of fair value of warrants to purchase Ordinary Shares — Foreign currency translation adjustments — Issuance costs allocated to warrants $ $ Financial income: Interest income $ ) $ ) Reevaluation of fair value of warrants to purchase Ordinary Shares — ) Foreign currency translation adjustments — ) $ ) $ ) Total financial income, net $ $ ) |
Schedule of net loss and weighted average number of shares | Year ended 2017 2016 Numerator: Net loss $ $ Net loss available to shareholders of Ordinary Shares $ $ Denominator: Weighted average number of Ordinary Shares used in computing basic and diluted net loss per share |
GENERAL (Details)
GENERAL (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)product | Dec. 31, 2016USD ($) | |
Organizational disclosures | ||
Operating losses | $ 20,435 | $ 27,398 |
Negative cash flows from operating activities | $ 22,242 | $ 25,850 |
Products for the treatment of post-surgical and acute pain in the home setting | ||
Organizational disclosures | ||
Number of products in development | product | 2 |
GENERAL - EXCLUSIVE LICENSE AND
GENERAL - EXCLUSIVE LICENSE AND SUPPLY AGREEMENT (Details) - Cardiome - Collaboration $ in Thousands | Jun. 28, 2015USD ($) |
Exclusive License and Supply Agreement | |
Upfront payment provided for per license agreement | $ 3,000 |
Aggregate maximum milestone payments to be achieved per agreement | $ 9,250 |
Scaling royalty percentage, low end of range | low teens |
Scaling royalty percentage, high end of range | mid-teens |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS(Details) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and cash equivalents | |
Minimum collateral percentage on reverse repurchase agreements principal | 102.00% |
SIGNIFICANT ACCOUNTING POLICI32
SIGNIFICANT ACCOUNTING POLICIES - PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment | ||
Assets in excess written off | $ 388 | $ 0 |
Computers and peripheral equipment | ||
Property and equipment | ||
Property and equipment, depreciation rate (as a percent) | 33.00% | |
Laboratory equipment | Minimum | ||
Property and equipment | ||
Property and equipment, depreciation rate (as a percent) | 7.00% | |
Laboratory equipment | Maximum | ||
Property and equipment | ||
Property and equipment, depreciation rate (as a percent) | 15.00% | |
Office furniture and equipment | ||
Property and equipment | ||
Property and equipment, depreciation rate (as a percent) | 6.00% |
SIGNIFICANT ACCOUNTING POLICI33
SIGNIFICANT ACCOUNTING POLICIES - ADVERTISING COSTS AND REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 12 Months Ended | 30 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Advertising costs | |||
Total advertising costs | $ 32 | $ 126 | |
Revenue recognition | |||
License and Services revenue over the performance period | $ 3,000 |
SIGNIFICANT ACCOUNTING POLICI34
SIGNIFICANT ACCOUNTING POLICIES - SEVERANCE PAY (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Severance pay | ||
Number of month's salary eligible to employees for each year of employment as severance pay | 1 month | |
Percentage of monthly salary eligible to employees as severance pay | 8.33% | |
Total expense related to severance pay | $ 66 | $ 71 |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities: | ||
Warrants to purchase Ordinary Shares | $ (11,343) | $ (7,078) |
Recurring basis | ||
Assets: | ||
Reverse Repurchase Agreements | 30,407 | 13,001 |
Money Market Funds | 185 | 6,455 |
Total financial assets | 30,592 | 19,456 |
Liabilities: | ||
Warrants to purchase Ordinary Shares | (11,343) | (7,078) |
Total financial liabilities | (11,343) | (7,078) |
Level 1 | Recurring basis | ||
Assets: | ||
Money Market Funds | 185 | 6,455 |
Total financial assets | 185 | 6,455 |
Level 2 | Recurring basis | ||
Assets: | ||
Reverse Repurchase Agreements | 30,407 | 13,001 |
Total financial assets | 30,407 | 13,001 |
Level 3 | Recurring basis | ||
Liabilities: | ||
Warrants to purchase Ordinary Shares | (11,343) | (7,078) |
Total financial liabilities | $ (11,343) | $ (7,078) |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - NET LOSS PER SHARE (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Basic and diluted net loss per share: | ||
Number of options, restricted share units and warrants excluded from the calculation of diluted net loss per share | 10,033,173 | 8,253,762 |
SIGNIFICANT ACCOUNTING POLICI37
SIGNIFICANT ACCOUNTING POLICIES - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) $ in Thousands | Jan. 01, 2018USD ($) |
ASU 2014-09 | |
Recently issued accounting pronouncements | |
Cumulative impact of accumulated deficit | $ 0 |
OTHER ACCOUNTS RECEIVABLE AND38
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | ||
Prepaid expenses and others | $ 186 | $ 135 |
Government authorities | 306 | 17 |
Other accounts receivables and prepaid expenses | $ 492 | $ 152 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT, NET | ||
Cost | $ 6,939 | $ 5,890 |
Accumulated depreciation | 1,632 | 1,341 |
Property and equipment, net | 5,307 | 4,549 |
Depreciation expense (including impairment of property and equipment) | 1,182 | 620 |
Laboratory equipment | ||
PROPERTY AND EQUIPMENT, NET | ||
Cost | 6,434 | 5,442 |
Accumulated depreciation | 1,327 | 1,077 |
Computers and peripheral equipment | ||
PROPERTY AND EQUIPMENT, NET | ||
Cost | 311 | 260 |
Accumulated depreciation | 195 | 159 |
Office furniture and equipment | ||
PROPERTY AND EQUIPMENT, NET | ||
Cost | 90 | 96 |
Accumulated depreciation | 20 | 20 |
Leasehold improvements | ||
PROPERTY AND EQUIPMENT, NET | ||
Cost | 104 | 92 |
Accumulated depreciation | $ 90 | $ 85 |
OTHER ACCOUNTS PAYABLE AND AC40
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||
Employee and payroll accruals | $ 871 | $ 891 |
Accrued expenses | 594 | 1,696 |
Other accounts payable and accrued expenses | $ 1,465 | $ 2,587 |
WARRANTS TO PURCHASE ORDINARY41
WARRANTS TO PURCHASE ORDINARY SHARES (Details) - USD ($) $ / shares in Units, $ in Thousands | May 25, 2017 | Apr. 25, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Assumptions used in determination of fair value | ||||
Proceeds from warrants exercised by shareholders | $ 4,866 | |||
Fair value adjustment for reclassification from warrant liability to equity | 5,177 | |||
Financial expense as a result of increase in warrants' fair value | 2,448 | $ (2,491) | ||
Liability related to warrants | 11,343 | $ 7,078 | ||
Warrant to purchase Ordinary Shares | ||||
Assumptions used in determination of fair value | ||||
Exercise of warrants into Ordinary Shares (in shares) | 1,351,766 | |||
Proceeds from warrants exercised by shareholders | $ 4,866 | |||
Fair value adjustment for reclassification from warrant liability to equity | $ 5,177 | |||
Financial expense as a result of increase in warrants' fair value | 2,448 | |||
Liability related to warrants | $ 11,343 | |||
Warrants issued on August 2016: | Monte Carlo Option Pricing Model | ||||
Assumptions used in determination of fair value | ||||
Risk-free interest rate (as a percent) | 1.65% | |||
Expected life (in years) | 4 years 2 months 9 days | 3 years 7 months 2 days | ||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
Fair value per warrant (in dollars) | $ 3.83 | $ 1.60 | $ 1.08 | |
Warrants issued on August 2016: | Monte Carlo Option Pricing Model | Minimum | ||||
Assumptions used in determination of fair value | ||||
Risk-free interest rate (as a percent) | 1.30% | 1.50% | ||
Expected volatility (as a percent) | 65.60% | 57.10% | 65.50% | |
Expected life (in years) | 3 years 1 month 21 days | |||
Warrants issued on August 2016: | Monte Carlo Option Pricing Model | Maximum | ||||
Assumptions used in determination of fair value | ||||
Risk-free interest rate (as a percent) | 2.05% | 1.84% | ||
Expected volatility (as a percent) | 85.00% | 77.60% | 85.50% | |
Expected life (in years) | 4 years 7 months 2 days | |||
Warrants issued on April 2017: | Monte Carlo Option Pricing Model | ||||
Assumptions used in determination of fair value | ||||
Expected life (in years) | 4 years 3 months 26 days | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | ||
Fair value per warrant (in dollars) | $ 2.78 | $ 1.20 | ||
Warrants issued on April 2017: | Monte Carlo Option Pricing Model | Minimum | ||||
Assumptions used in determination of fair value | ||||
Risk-free interest rate (as a percent) | 1.82% | 1.68% | ||
Expected volatility (as a percent) | 65.70% | 76.30% | ||
Expected life (in years) | 4 years 8 months 23 days | |||
Warrants issued on April 2017: | Monte Carlo Option Pricing Model | Maximum | ||||
Assumptions used in determination of fair value | ||||
Risk-free interest rate (as a percent) | 1.87% | 2.12% | ||
Expected volatility (as a percent) | 80.70% | 82.40% | ||
Expected life (in years) | 5 years |
COMMITMENTS AND CONTINGENT LI42
COMMITMENTS AND CONTINGENT LIABILITIES - LEASES (Details) $ in Thousands | Aug. 23, 2017period | Dec. 31, 2017USD ($) |
Israel | ||
Operating lease agreement | ||
Lease extension term | 12 months | |
Number of periods to extend the lease term | period | 3 | |
Additional lease extension term per option exercised | 12 months | |
Future minimum aggregate lease commitments under non-cancelable operating lease agreements | ||
2,018 | $ 411 | |
2,019 | 106 | |
Future minimum aggregate lease commitments | $ 517 | |
San Ramon, California | ||
Operating lease agreement | ||
Lease term | 4 years |
COMMITMENTS AND CONTINGENT LI43
COMMITMENTS AND CONTINGENT LIABILITIES - OTHER COMMITMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Purchase obligations | |||
Non-cancelable commitments to suppliers for purchases | $ 1,500 | ||
Combined OCS and Incubator, RAD Biomed Ltd | |||
Royalties | |||
Grants received | $ 782 | ||
Royalties to be paid as percentage of amount received, maximum if transfer intellectual property out of Israel (as a percent) | 600.00% | ||
Intellectual property transferred out of Israel | $ 0 | ||
Provision for grants received which become loans to be repaid if transfer intellectual property out of Israel | $ 0 | ||
OCS | |||
Royalties | |||
Royalties to be paid as percentage of amount received, minimum at base (as a percent) | 150.00% | ||
Royalties to be paid as percentage of amount received, maximum at base (as a percent) | 300.00% | ||
Royalty Expense | $ 32 | $ 23 | $ 35 |
Minimum | First three years royalty term | OCS | |||
Royalties | |||
Royalties commitment on future revenues (as a percent) | 3.00% | ||
Minimum | Commencing the fourth year royalty term | OCS | |||
Royalties | |||
Royalties commitment on future revenues (as a percent) | 3.50% | ||
Maximum | First three years royalty term | OCS | |||
Royalties | |||
Royalties commitment on future revenues (as a percent) | 4.00% | ||
Maximum | Commencing the fourth year royalty term | OCS | |||
Royalties | |||
Royalties commitment on future revenues (as a percent) | 4.50% |
TAXES ON INCOME - TAX RATES (De
TAXES ON INCOME - TAX RATES (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Israel | |||
Taxes on income | |||
Statutory federal tax rate (as a percent) | 24.00% | 25.00% | |
Israel | Forecast | |||
Taxes on income | |||
Statutory federal tax rate (as a percent) | 23.00% | ||
United States | |||
Taxes on income | |||
Statutory federal tax rate (as a percent) | 35.00% | ||
United States | Forecast | |||
Taxes on income | |||
Statutory federal tax rate (as a percent) | 21.00% |
TAXES ON INCOME - TAX BENEFITS
TAXES ON INCOME - TAX BENEFITS UNDER LAW FOR ENCOURAGEMENT OF CAPITAL INVESTMENTS (Details) ₪ in Millions | 12 Months Ended |
Dec. 31, 2017ILS (₪) | |
Law For Encouragement Of Capital Investments, April 2005 Amendment | |
Taxes on income | |
Minimum required percentage of income derived from export due to amendment | 25.00% |
Tax exemption period (in years) | 2 years |
Income tax benefit period, limitation from Year of Election (in years) | 12 years |
Withholding tax rate for dividend recipient, if dividend distributed during the tax period or within twelve years thereafter (as a percent) | 15.00% |
Law For Encouragement Of Capital Investments, December 2010 Amendment | |
Taxes on income | |
Income tax rate under amendment for dividends distribution to individuals or foreign residents (as a percent) | 20.00% |
Tax Period 2014 and Thereafter | Law For Encouragement Of Capital Investments, December 2010 Amendment | |
Taxes on income | |
Income tax rate under amendment (as a percent) | 16.00% |
Income tax rate in development area A under the amendment (as a percent) | 9.00% |
Minimum | Law For Encouragement Of Capital Investments, April 2005 Amendment | |
Taxes on income | |
Tax benefit period (in years) | 7 years |
Income tax period after two years of tax exemption (in years) | 5 years |
Income tax rate based on foreign ownership (as a percent) | 10.00% |
Maximum | Law For Encouragement Of Capital Investments, April 2005 Amendment | |
Taxes on income | |
Tax benefit period (in years) | 10 years |
Income tax period after two years of tax exemption (in years) | 8 years |
Income tax rate based on foreign ownership (as a percent) | 25.00% |
Israel | Law For Encouragement Of Capital Investments, December 2016 Amendment | |
Taxes on income | |
Income tax rate on income derived from intellectual property | 12.00% |
Percentage of annual income derived from exports | 25.00% |
Maximum amount of revenue to be considered as PTE | ₪ 10,000 |
Capital gains tax on intangible assets | 12.00% |
Cost of intangible asset purchased from foreign resident | ₪ 200 |
Withholding tax rate for dividends paid from PTE income | 20.00% |
Withholding tax rate for dividends paid from PTE income to foreign resident company | 4.00% |
TAXES ON INCOME - DEFERRED TAXE
TAXES ON INCOME - DEFERRED TAXES COMPONENTS AND OTHER TAX SCHEDULES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Taxes on income | ||
Net operating loss carryforwards | $ 102,808 | |
Deferred tax assets: | ||
Net operating loss carryforwards | 23,103 | $ 13,295 |
Research and development credits | 4,374 | 4,885 |
Accrued social benefits and other | 36 | 29 |
Issuance costs | 450 | 430 |
Deferred tax assets before valuation allowance | 27,963 | 18,639 |
Valuation allowance | (27,963) | (18,639) |
Loss (income) before taxes on income: | ||
Loss (income) before taxes on income | 23,199 | 25,497 |
Reconciliation of the beginning and ending balances of unrecognized tax benefits: | ||
Unrecognized tax benefits, beginning of year | 258 | 258 |
Increase in unrecognized tax benefits for current year | 120 | |
Unrecognized tax benefits, end of year | 378 | 258 |
Domestic | ||
Loss (income) before taxes on income: | ||
Loss (income) before taxes on income | 23,630 | 25,815 |
Foreign | ||
Loss (income) before taxes on income: | ||
Loss (income) before taxes on income | $ (431) | $ (318) |
SHAREHOLDERS' EQUITY - SCHEDULE
SHAREHOLDERS' EQUITY - SCHEDULE OF SHARE CAPITAL (Details) | 12 Months Ended | |
Dec. 31, 2017Vote₪ / sharesshares | Dec. 31, 2016₪ / sharesshares | |
Share capital: | ||
Ordinary Shares, par value per share | ₪ / shares | ₪ 0.01 | ₪ 0.01 |
Authorized Shares | ||
Ordinary share, authorized shares | 50,000,000 | 50,000,000 |
Total Authorized Shares | 50,000,000 | 50,000,000 |
Issued Shares | ||
Ordinary share, Issued shares | 26,572,719 | 20,139,826 |
Total Issued Shares | 26,572,719 | 20,139,826 |
Outstanding Shares | ||
Ordinary share, Outstanding shares | 26,572,719 | 20,139,826 |
Total Outstanding Shares | 26,572,719 | 20,139,826 |
Ordinary Shares | ||
Outstanding Shares | ||
Number of votes per share | Vote | 1 |
SHAREHOLDERS' EQUITY - PRIVATE
SHAREHOLDERS' EQUITY - PRIVATE PLACEMENT(Details) $ in Thousands | Aug. 04, 2017USD ($) | Apr. 25, 2017USD ($)director | Aug. 04, 2016USD ($)director | Jul. 29, 2016₪ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017₪ / sharesshares | Apr. 20, 2017₪ / shares | Apr. 20, 2017USD ($)$ / sharesshares | Dec. 31, 2016₪ / sharesshares | Jul. 29, 2016USD ($)$ / sharesshares |
SHAREHOLDERS' EQUITY | |||||||||||
Ordinary Shares, shares authorized | shares | 50,000,000 | 50,000,000 | |||||||||
Ordinary share, nominal value (in dollars per share) | ₪ / shares | ₪ 0.01 | ₪ 0.01 | |||||||||
Proceeds from exercise of warrants into Ordinary Shares | $ 4,866 | ||||||||||
Issuance costs, upon issuance of Ordinary shares in a private placement | $ 1,449 | $ 1,748 | |||||||||
Private placement | Ordinary shares and warrants to purchase ordinary shares | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Net proceeds from Issuance of Shares and Warrants | $ 28,110 | ||||||||||
Issuance costs, upon issuance of Ordinary shares in a private placement | 1,890 | ||||||||||
Maximum liquidated damages for each participant for failure to maintain effectiveness of registration statement (as a percent) | 5.00% | ||||||||||
Private placement | Ordinary shares and warrants to purchase ordinary shares | Board members | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Proceeds from exercise of warrants into Ordinary Shares | $ 2,999 | ||||||||||
Number of board members invested | director | 1 | ||||||||||
Private placement | Ordinary shares and warrants to purchase ordinary shares | First tranche | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Exercise price of units (in dollars per unit) | $ / shares | 3.255 | ||||||||||
Proceeds from exercise of warrants into Ordinary Shares | $ 21,333 | ||||||||||
Number of board members invested | director | 2 | ||||||||||
Private placement | Ordinary shares and warrants to purchase ordinary shares | First tranche | Board members | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Proceeds from exercise of warrants into Ordinary Shares | $ 5,133 | ||||||||||
Private placement | Ordinary Shares | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Value of shares and warrants to which the company agreed to issue and sell | $ 30,000 | $ 32,000 | |||||||||
Ordinary Shares, shares authorized | shares | 5,031,550 | ||||||||||
Ordinary share, nominal value (in dollars per share) | ₪ / shares | ₪ 0.01 | ||||||||||
Price per share | $ / shares | $ 5.90 | ||||||||||
Issuance costs, upon issuance of Ordinary shares in a private placement | $ 1,748 | ||||||||||
Private placement | Ordinary Shares | First tranche | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Ordinary Shares, shares authorized | shares | 6,554,016 | ||||||||||
Ordinary share, nominal value (in dollars per share) | ₪ / shares | ₪ 0.01 | ||||||||||
Private placement | Ordinary Shares | Second tranche | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Value of shares and warrants to which the company agreed to issue and sell | $ 10,700 | ||||||||||
Period over which closing price is used to determine issuance price of share in a subscription agreement | 30 days | ||||||||||
Private placement | Ordinary Shares | Second tranche | Minimum | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Price per share | $ / shares | $ 3.13 | ||||||||||
Private placement | Warrant to purchase Ordinary Shares | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Warrants authorized (in warrants) | shares | 2,515,775 | ||||||||||
Exercise price of units (in dollars per unit) | $ / shares | 0.125 | ||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 6.785 | $ 3.5995 | |||||||||
Private placement | Warrant to purchase Ordinary Shares | First tranche | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
Warrants authorized (in warrants) | shares | 6,554,016 |
SHAREHOLDERS' EQUITY - STOCK BA
SHAREHOLDERS' EQUITY - STOCK BASED COMPENSATION (Details) - $ / shares | Dec. 28, 2017 | Oct. 05, 2016 | Dec. 31, 2017 | Jan. 25, 2015 | Dec. 31, 2014 | Jun. 18, 2009 |
Stock options, employees | ||||||
Stock-based compensation | ||||||
Options granted (in shares) | 382,414 | |||||
Restricted share units | ||||||
Stock-based compensation | ||||||
Restricted share units (in shares) | 247,095 | |||||
Restricted share units (in dollars per share) | $ 3.32 | |||||
Stock options, directors | ||||||
Stock-based compensation | ||||||
Options granted (in shares) | 126,174 | |||||
Options granted (in dollars per share) | $ 3.65 | |||||
2009 Plan | Stock options, all inclusive recipients | ||||||
Stock-based compensation | ||||||
Shares authorized for issue under the plan | 978,655 | 55,971 | ||||
Vesting period | 3 years | |||||
Expiration period | 7 years | |||||
Shares available for future grant (in shares) | 1,072,879 | |||||
Amended and Restated 2009 Stock Incentive Plan | ||||||
Stock-based compensation | ||||||
Automatic annual increase in authorized number of ordinary shares available for future grant under stock option plan (as a percent) | 4.00% | |||||
Minimum | Stock options, employees | ||||||
Stock-based compensation | ||||||
Options granted (in dollars per share) | $ 3.35 | |||||
Maximum | Stock options, employees | ||||||
Stock-based compensation | ||||||
Options granted (in dollars per share) | $ 6.50 |
SHAREHOLDERS' EQUITY - OPTIONS
SHAREHOLDERS' EQUITY - OPTIONS AND RESTRICTED SHARE UNITS ROLL FORWARD (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
June 30 2018 | ||
Aggregate intrinsic value | ||
Percentage of restricted share units vesting June 30, 2018 | 50.00% | |
Amended and Restated 2009 Stock Incentive Plan | Stock options, employees and directors | ||
Number of options | ||
Options outstanding at beginning of year (in shares) | 1,689,555 | |
Options granted (in shares) | 508,588 | |
Options exercised (in shares) | (49,577) | |
Options expired (in shares) | (90,704) | |
Options outstanding at end of year (in shares) | 2,057,862 | 1,689,555 |
Options vested at end of year (in shares) | 1,297,409 | |
Weighted average exercise price | ||
Options outstanding at beginning of year (in dollars per share) | $ 4.02 | |
Options granted (in dollars per share) | 3.86 | |
Options exercised (in dollars per share) | 3.32 | |
Options expired (in dollars per share) | 3.16 | |
Options outstanding at end of year (in dollars per share) | 4.03 | $ 4.02 |
Options vested at end of year (in dollars per share) | $ 4.19 | |
Weighted average remaining contractual life | ||
Weighted average remaining contractual life, Outstanding (in years) | 6 years 1 month 13 days | 6 years 22 days |
Weighted average remaining contractual life, Vested (in years) | 4 years 3 months 7 days | |
Aggregate intrinsic value | ||
Aggregate intrinsic value, Outstanding | $ 1,384 | |
Aggregate intrinsic value, Vested | $ 201 | |
Amended and Restated 2009 Stock Incentive Plan | Restricted share units, employees and directors | ||
Number of restricted share units | ||
Restricted share units granted | 247,095 | |
Unvested at end of year (in shares) | 247,095 | |
Weighted average grant date fair value | ||
Restricted share units granted (in dollars per share) | $ 3.32 | |
Unvested at end of year (in dollars per share) | $ 3.32 | |
Aggregate intrinsic value | ||
Aggregate intrinsic value, Outstanding, exercisable | $ 914 |
SHAREHOLDERS' EQUITY - OPTION51
SHAREHOLDERS' EQUITY - OPTIONS OUTSTANDING BY EXERCISE RANGE (Details) - Stock options, employees and directors | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Options Outstanding | |
Number of options outstanding | 2,057,862 |
Weighted average remaining contractual term | 6 years 1 month 13 days |
Options Vested | |
Number of options vested | 1,297,409 |
Weighted average remaining contractual term | 4 years 3 months 7 days |
$2.70 - $4.38 | |
Options outstanding by exercise range | |
Range of Exercise Price Lower Limit (in dollars per share) | $ / shares | $ 2.70 |
Range of Exercise Price Upper Limit (in dollars per share) | $ / shares | $ 4.38 |
Options Outstanding | |
Number of options outstanding | 1,555,344 |
Weighted average remaining contractual term | 6 years 1 month 24 days |
Options Vested | |
Number of options vested | 892,111 |
Weighted average remaining contractual term | 3 years 9 months |
$5.55 - $7.45 | |
Options outstanding by exercise range | |
Range of Exercise Price Lower Limit (in dollars per share) | $ / shares | $ 5.55 |
Range of Exercise Price Upper Limit (in dollars per share) | $ / shares | $ 7.45 |
Options Outstanding | |
Number of options outstanding | 502,518 |
Weighted average remaining contractual term | 6 years 15 days |
Options Vested | |
Number of options vested | 405,298 |
Weighted average remaining contractual term | 5 years 5 months 12 days |
SHAREHOLDERS' EQUITY - FAIR VAL
SHAREHOLDERS' EQUITY - FAIR VALUE ASSUMPTIONS FOR OPTIONS GRANTED (Details) - Stock options, all inclusive recipients - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation | ||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 2.91 | $ 2.94 |
Total unrecognized compensation cost related to non-vested stock option awards | $ 2,689 | |
Weighted average period for recognition of compensation cost related to unvested stock awards | 2 years 15 days | |
Assumptions used to estimate the fair values of options granted | ||
Volatility rate, minimum (as a percent) | 82.80% | 79.70% |
Volatility rate, maximum (as a percent) | 93.90% | 98.90% |
Risk-free interest rate, minimum (as a percent) | 1.95% | 1.25% |
Risk-free interest rate, maximum (as a percent) | 2.28% | 2.17% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected life (in years) | 5 years 10 months 13 days | 5 years 10 months 13 days |
SHAREHOLDERS' EQUITY - COMPENSA
SHAREHOLDERS' EQUITY - COMPENSATION COST RELATED TO EQUITY-BASED AWARDS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation costs | ||
Allocated share based compensation expense | $ 940 | $ 833 |
Research and development | ||
Stock-based compensation costs | ||
Allocated share based compensation expense | 202 | 129 |
Sales and marketing | ||
Stock-based compensation costs | ||
Allocated share based compensation expense | 45 | 10 |
General and administrative | ||
Stock-based compensation costs | ||
Allocated share based compensation expense | $ 693 | $ 694 |
SUPPLEMENTAL INFORMATION - REVE
SUPPLEMENTAL INFORMATION - REVENUE AND LONG LIVED ASSETS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | |
Revenues from external customers and long-lived assets | ||
Number of Operating Segments | segment | 1 | |
Geographic Areas, Revenues from External Customers | ||
Licensing revenues | $ 1,065 | $ 1,065 |
Geographic Areas, Long-Lived Assets | ||
Long-Lived Assets | 5,307 | 4,549 |
SteadyMed Ltd | ||
Geographic Areas, Long-Lived Assets | ||
Long-Lived Assets | 5,213 | 4,455 |
SteadyMed Theraputics, Inc | ||
Geographic Areas, Long-Lived Assets | ||
Long-Lived Assets | $ 94 | $ 94 |
Customer Concentration Risk | Sales Revenue, Net | ||
Geographic Areas, Long-Lived Assets | ||
Sales to a single customer exceeding 10%: | 100.00% | 100.00% |
Europe | ||
Geographic Areas, Revenues from External Customers | ||
Licensing revenues | $ 1,065 | $ 1,065 |
SUPPLEMENTAL INFORMATION - FINA
SUPPLEMENTAL INFORMATION - FINANCIAL EXPENSE (INCOME) NET, NET LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financial expenses: | ||
Interest expense and bank fees | $ 26 | $ 97 |
Reevaluation of fair value of warrants to purchase Ordinary Shares | 2,448 | |
Foreign currency translation adjustments | 116 | |
Issuance costs allocated to warrants | 441 | 784 |
Total financial expenses | 3,031 | 881 |
Financial income: | ||
Interest income | (267) | (74) |
Reevaluation of fair value of warrants to purchase Ordinary Shares | (2,491) | |
Foreign currency translation adjustments | (217) | |
Total financial income | (267) | (2,782) |
Total financial income, net | $ 2,764 | $ (1,901) |
SUPPLEMENTAL INFORMATION - NET
SUPPLEMENTAL INFORMATION - NET LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | ||
Net loss | $ 23,205 | $ 25,869 |
Net loss available to shareholders of Ordinary shares | $ 23,205 | $ 25,869 |
Denominator: | ||
Weighted average number of Ordinary Shares used in computing basic and diluted net loss per share | 24,421,288 | 16,253,975 |