Indaptus Therapeutics 10-Q 7 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document And Entity Information
Entity Registrant Name	Intec Pharma Ltd.
Entity Central Index Key	0001638381
Document Type	10-Q
Trading Symbol	NTEC
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		33,297,371

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 31,497	$ 39,246
Investment in marketable securities (Note 3)	757	1,333
Prepaid expenses and other receivables	2,685	2,986
TOTAL CURRENT ASSETS	34,939	43,565
NON-CURRENT ASSETS:
Other assets (Note 4c)	6,792	5,431
Property and equipment, net	12,487	12,233
Operating lease right-of-use assets (Note 4a)	2,047
Deferred tax assets	350	281
TOTAL NON-CURRENT ASSETS	21,676	17,945
TOTAL ASSETS	56,615	61,510
CURRENT LIABILITIES -
Accounts payable and accruals: Trade	3,487	2,849
Accounts payable and accruals: Other (Note 6)	7,245	4,807
TOTAL CURRENT LIABILITIES	10,732	7,656
LONG-TERM LIABILITIES:
Non-current operating lease liabilities (Note 4a)	1,409
Other liabilities	385	309
TOTAL LONG-TERM LIABILITIES	1,794	309
TOTAL LIABILITIES	12,526	7,965
COMMITMENTS AND CONTINGENT LIABILITIES (Note 4)
SHAREHOLDERS' EQUITY:
Ordinary shares, with no par value - authorized: 100,000,000 Ordinary Shares as of March 31, 2019 and December 31, 2018; issued and outstanding: 33,297,371 and 33,232,988 Ordinary Shares as of March 31, 2019 and December 31, 2018, respectively	727	727
Additional paid-in capital	195,842	194,642
Accumulated deficit	(152,480)	(141,824)
TOTAL SHAREHOLDERS' EQUITY	44,089	53,545
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 56,615	$ 61,510

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Ordinary shares, par value (in dollar per shares)
Ordinary shares, authorized	100,000,000	100,000,000
Ordinary shares, issued	33,297,371	33,232,988
Ordinary shares, outstanding	33,297,371	33,232,988

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT EXPENSES, net	$ (8,542)	$ (8,880)
GENERAL AND ADMINISTRATIVE EXPENSES	(2,190)	(1,910)
OPERATING LOSS	(10,732)	(10,790)
FINANCIAL INCOME, net	110	124
LOSS BEFORE INCOME TAX	(10,622)	(10,666)
INCOME TAX	(34)	(63)
NET LOSS	$ (10,656)	$ (10,729)
LOSS PER SHARE BASIC AND DILUTED (in dollars per share)	$ (0.32)	$ (0.41)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER ORDINARY SHARE IN THOUSANDS	33,247	26,076

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Ordinary Shares	Additional Paid-in Capital	Accumulated Deficit	Total
BALANCE at Dec. 31, 2017	$ 727	$ 156,356	$ (98,281)	$ 58,802
BALANCE (in shares) at Dec. 31, 2017	26,075,770			26,075,770
CHANGES IN THE THREE-MONTH PERIOD ENDED MARCH 31
Share-based compensation (Note 5)		723		$ 723
Net loss			(10,729)	(10,729)
BALANCE at Mar. 31, 2018	$ 727	157,079	(109,010)	$ 48,796
BALANCE (in shares) at Mar. 31, 2018	26,075,770			26,075,770
BALANCE at Dec. 31, 2018	$ 727	194,642	(141,824)	$ 53,545
BALANCE (in shares) at Dec. 31, 2018	33,232,988			33,232,988
CHANGES IN THE THREE-MONTH PERIOD ENDED MARCH 31
Exercise of options		257		$ 257
Exercise of options, shares	64,383
Share-based compensation (Note 5)		943		943
Net loss			(10,656)	(10,656)
BALANCE at Mar. 31, 2019	$ 727	$ 195,842	$ (152,480)	$ 44,089
BALANCE (in shares) at Mar. 31, 2019	33,297,371			33,297,371

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (10,656)	$ (10,729)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation	218	206
Exchange differences on cash and cash equivalents	8	(40)
Right of use asset	163
Lease liability	(98)
Losses on marketable securities		73
Share-based compensation	943	723
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other receivables	340	(98)
Increase in deferred tax assets	(69)
Increase (decrease) in accounts payable and accruals	1,813	(390)
Increase in other liabilities	76
Net cash used in operating activities	(7,262)	(10,255)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(10)	(2,022)
Investment in other assets	(1,206)
Proceeds from disposal of marketable securities, net	576	46
Net cash used in investing activities	(640)	(1,976)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options	161
Net cash provided by financing activities	161
DECREASE IN CASH AND CASH EQUIVALENTS	(7,741)	(12,231)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD	39,246	53,393
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS	(8)	40
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	31,497	41,202
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Liability with respect to property and equipment (see note 4b)	462
Liability with respect to other assets (see note 4c)	648
Receivables with respect to exercise of options	96
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Interest received	$ 128	$ 117

NATURE OF OPERATIONS AND BASIS

NATURE OF OPERATIONS AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS AND BASIS OF PRESENTATION	NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION: a. Nature of operations 1) Intec Pharma Ltd. (“Intec”) is engaged in the development of proprietary technology which enables the gastric retention of certain drugs. The technology is intended to significantly improve the efficiency of the drugs and substantially reduce their side-effects or the effective doses. Intec is a limited liability public company incorporated in Israel. Intec’s ordinary shares are traded on the NASDAQ Capital Market (“NASDAQ”). In September 2017, Intec incorporated a wholly-owned subsidiary in the United States of America in the State of Delaware – Intec Pharma Inc. (the “Subsidiary”). The Subsidiary was incorporated mainly to provide Intec executive and management services, including business development, medical affairs and investor relationship activities outside of Israel. 2) Intec together with its Subsidiary (the “Company”) engage in research and development activities and as a group have not yet generated revenues from their operations. Accordingly, there is no assurance that the Company’s operations will generate positive cash flows. As of March 31, 2019, the cumulative losses of the Company were approximately $152.5 million. Management expects that the Company will continue to incur losses from its operations, which will result in negative cash flows from operating activities. The Company’s management estimates that its current cash resources will allow the Company to complete its Phase III clinical trial for AP-CD/LD. However, management estimates that further fund raising will be required in order for the Company to complete the research and development of all of its product candidates including the manufacturing activities of the AP-CD/LD. As a result, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these financial statements. The Company plans to fund its future operations through submissions of applications for grants from private funds, license agreements with third parties and raising capital from the public and/or private investors and/or institutional investors. There is no assurance, however, that the Company will be successful in obtaining the level of financing needed for its operations and the research and development of its product candidates. If the Company is unsuccessful in securing sufficient financing, it may need to make the necessary changes to its operations to reduce the level of expenditures in line with available resources. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. b. Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of March 31, 2019, the consolidated results of operations, changes in equity and cash flows for the three-month periods ended March 31, 2019 and 2018. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual financial statements for the year ended December 31, 2018, as filed in the 10-K on February 27, 2019. The condensed balance sheet data as of December 31, 2018 included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2018 but does not include all disclosures required by US GAAP for annual financial statements. The results for the three-month period ended March 31, 2019 are not necessarily indicative of the results expected for the year ending December 31, 2019.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Principles of consolidation The consolidated financial statements include the accounts of Intec and its Subsidiary. Intercompany balances and transactions have been eliminated upon consolidation. b. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The marketable securities which are measures at fair value are categorized as Level 1. The carrying amount of the cash and cash equivalents, other receivable and accrued expenses and other liabilities approximates their fair value. c. Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the three-month period divided by the weighted average number of ordinary shares outstanding during the three-month period. Diluted loss per share is based upon the weighted average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following share options were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data): Three months ended March 31 2019 2018 Outstanding stock options 4,302,287 3,293,788 d. Research and development expenses, net Research and development expenses, net for the three-month period ended March 31, 2019 and 2018, include participation in research and development expenses in the amount of approximately $566 thousand and approximately $335 thousand, respectively. e. Newly issued accounting pronouncements 1) In February 2016, the FASB established ASC Topic 842, “Leases” (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs for leases entered into prior to adoption of Topic 842. Additionally, the Company did not separate lease and non-lease components for all of its leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) providing significant new disclosures about its leasing activities. Upon adoption, the Company recognized additional operating lease liabilities, of approximately $2.2 million based on the present value of the remaining lease payments under current leasing standards for existing operating leases. The Company also recognized corresponding ROU assets of approximately $2.2 million. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company’s leases may include variable payments based on measures that include changes in price index which are expensed as incurred and presented as operating expense on the condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments. The new standard also provides practical expedients for an entity’s ongoing accounting. Beginning in 2019, the Company changed its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 4a. 2) In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation” to improve the usefulness of information provided to users of financial statements while reducing cost and complexity in financial reporting and provide guidance aligning the measurement and classification for share-based payments to nonemployees with the guidance for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. This standard, adopted as of January 1, 2019, had no material impact on the Company’s consolidated financial statements.

MARKETABLE SECURITIES

MARKETABLE SECURITIES	3 Months Ended
	Mar. 31, 2019
Investments, Debt and Equity Securities [Abstract]
MARKETABLE SECURITIES	NOTE 3 - MARKETABLE SECURITIES The Company’s marketable securities are with a minimum of A rating by global rating agencies. These marketable securities are recorded at fair value with changes recorded in the statement of operations as “financial income, net”, as the Company chose to apply the fair value option. As of March 31, 2019 and December 31, 2018, the amount of the marketable securities is approximately $0.8 million and $1.3 million, respectively. The loss, net from changes in marketable securities for the three-month periods ended March 31, 2019 and 2018 amounted to approximately $0 and $73 thousand, respectively.

COMMITMENTS AND CONTINGENT LIAB

COMMITMENTS AND CONTINGENT LIABILITIES	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES	NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES: a. Lease Agreements 1) The Company is a tenant under a lease agreement in respect of offices and operational spaces in Jerusalem until June 30, 2021. The lease agreement includes an option to extend the lease term until June 30, 2022 (the “Extension Option”). The exercise of the Extension Option may be made in the Company’s sole discretion. Rent payments are denominated in NIS and linked to the Israeli CPI. To secure the Company’s obligations to the lease agreement in Jerusalem, the Company granted a bank guarantee to the lessor, which amounted to approximately $139 thousand as of March 31, 2019. The Company also leases office space in Modi’in and New York City for a short-term period. 2) The Company has entered into operating lease agreements for vehicles used by its employees. The lease periods are generally for three years and the payments are linked to the Israeli CPI. To secure the terms of the lease agreements, the Company has made certain prepayments to the leasing company, representing approximately three months of lease payments. Lease expense for the three months ended March 31, 2019 was comprised of the following: Three months ended March 31, 2019 U.S. dollars in thousands Operating lease expense $ 190 Short-term lease expense 25 Variable lease expense * $ 215 * Represents an amount less than $ 1,000 Supplemental information related to leases are as follows: March 31 2019 U.S. dollars Operating lease right-of-use assets $ 2,047 Current Operating lease liabilities 653 Non-current operating lease liabilities $ 1,409 Other information: Operating cash flows from operating leases (cash paid in thousands) $ 189 Weighted Average Remaining Lease Term 3.08 years Weighted Average Discount Rate 5.36% Maturities of lease liabilities are as follows: Amount Year U.S. dollars 2019 (excluding the three months ended March 31, 2019) $ 558 2020 708 2021 640 2022 319 Total lease payments 2,225 Less imputed interest (163 ) Total $ 2,062 3) ASC 840 Disclosures- The Company elected the modified retrospective transition method and included the following tables previously disclosed. Future contractual obligations under the abovementioned operating lease agreements (not including the Extension Option) as of December 31, 2018 are as follows: Year Amount U.S. dollars 2019 $ 772 2020 721 2021 332 Total $ 1,825 b. Automated Production Line In April 2017, the Company engaged with an international manufacturer for ordering a large-scale automated production line for manufacturing Accordion Pills (the “Production Line”). The total cost of the Production Line amounted to approximately €8.0 million. As of March 31, 2019 and December 31, 2018, the Company transferred payments of approximately €7.4 million (approximately $8.6 million). In addition, as of March 31, 2019 and December 31, 2018, the Company recognized a liability in the amount of approximately €553 thousand (approximately $621 thousand) and €148 thousand (approximately $170 thousand), respectively. As of March 31, 2019, the Production Line has been delivered to the commercial site at Lohmann Therapie-Systeme AG (“LTS”) and as of the date of the issuance of these condensed consolidated financial statements the Production Line is in the installation and testing stage. For more details regarding the Manufacturing Services with LTS see note c below. c. Establishment of the Commercial Scale Production Capabilities for AP-CD/LD In December 2018, the Company entered into a Process Development Agreement for Manufacturing Services with LTS for the manufacture of AP-CD/LD (the “Agreement”). Under the Agreement, the Company will bear the costs incurred by LTS to acquire the production equipment for AP-CD/LD (“Equipment”) in the amount of approximately €7.0 million, however such amount will later be reimbursed to the Company by LTS in the form of a reduction in the purchase price of the AP-CD/LD product. As of March 31, 2019, the Company transferred payments of approximately €5.4 million (approximately $6.1 million) in costs of the Equipment, of which approximately €1.1 million (approximately $1.2 million) was paid during the three-month period ended March 31, 2019 and recognized a liability in an additional amount of €577 thousand (approximately $648 thousand) and as of December 31, 2018 recognized a liability of €436 thousand (approximately $499 thousand). The Company has recognized the Equipment as non-current other assets. The Agreement contains several termination rights which are expected to be included in a definitive manufacturing and supply agreement. As of March 31, 2019, the Company recognized a liability that was recorded against research and development expenses, net in the amount of approximately €2.7 million (approximately $3.0 million), for LTS’s facility upgrading costs, of which approximately €2.0 million (approximately $2.2 million) will be paid to LTS only if the Company decides to not continue with the project or commercialization of AP-CD/LD. The liability that was recorded as of December 31, 2018, was approximately €1.65 million (approximately $1.9 million).

SHARE CAPITAL

SHARE CAPITAL	3 Months Ended
	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
SHARE CAPITAL	NOTE 5 - SHARE CAPITAL: a. Changes in share capital During the three-month period ended March 31, 2019, options to purchase 64,383 ordinary shares granted to employees were exercised for consideration of approximately $257 thousand. b. Share-based compensation: 1) In January 2016, the Company’s board of directors approved a new option plan (the “2015 Plan”). Originally, the maximum number of ordinary shares reserved for issuance under the 2015 Plan was 700,000 ordinary shares for grants to directors, employees and consultants. In July 2016 an increase of 700,000 ordinary shares was approved by the board of directors. In December 2017 and June 2018, an increase of 2,100,000 and 1,000,000 ordinary shares, respectively, was approved by the Company’s shareholders at a general meeting of shareholders. As of March 31, 2019, 418,593 shares remain available for grant under the Plan. In the three months ended March 31, 2019 and 2018, the Company granted options as follows: Three months ended March 31, 2019 Number of options granted Exercise price Vesting period Expiration Employees 940,000 $ 7.63 3 years 7 years Three months ended March 31, 2018 Number of options granted Exercise price range Vesting period range Expiration Employees 1,075,000 $5.19-$6.67 3 years 7 years The fair value of options granted to employees during the three months ended March 31, 2019, and 2018 was $3.4 million and $2.7 million, respectively. The fair value of options granted to employees on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: Three months ended March 31 2019 2018 Value of ordinary share $7.46 $5.70-$6.45 Dividend yield 0% 0% Expected volatility 53.32% 45.87%-46.47% Risk-free interest rate 2.57% 2.25%-2.66% Expected term 5 years 5 years 2) The following table illustrates the effect of share-based compensation on the statements of operations: Three months ended March 31 2019 2018 U.S. dollars in thousands Research and development expenses, net $ 570 $ 360 General and administrative expenses 373 363 $ 943 $ 723

ACCOUNTS PAYBLE AND ACCRUALS -

ACCOUNTS PAYBLE AND ACCRUALS - OTHER	3 Months Ended
	Mar. 31, 2019
Accounts payable and accruals - other [Abstract]
ACCOUNTS PAYBLE AND ACCRUALS - OTHER	NOTE 6 -ACCOUNTS PAYBLE AND ACCRUALS - OTHER March 31, December 31, 2019 2018 U.S. dollars in thousands Expenses payable $ 5,430 $ 3,400 Current operating lease liabilities (see Note 4a) 653 - Salary and related expenses, including social security and other taxes 624 1,078 Accrual for vacation days and recreation pay for employees 436 309 Other 102 20 $ 7,245 $ 4,807

EVENT SUBSEQUENT TO MARCH 31, 2

EVENT SUBSEQUENT TO MARCH 31, 2019	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
EVENT SUBSEQUENT TO MARCH 31, 2019	NOTE 7 - EVENT SUBSEQUENT TO MARCH 31, 2019 On April 4, 2019, the Company’s shareholders at a general meeting of shareholders approved, further to a resolution adopted by the Board of Directors on January 22, 2019, a grant of options to the Company’s Chief Executive Officer to purchase an aggregate of 125,000 ordinary shares. Each option shall be exercisable at an exercise price of $7.64 per share. The options vest over a three-year period, with one-third of the options vesting at the end of the first anniversary of the date of grant, and the remaining options vesting in eight equal quarterly installments following the first anniversary of the grant date. The options expire seven years after the date of grant. The value of the benefit in respect of the said options, as calculated on the grant date, is approximately $419 thousand.

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Principles of consolidation	a. Principles of consolidation The consolidated financial statements include the accounts of Intec and its Subsidiary. Intercompany balances and transactions have been eliminated upon consolidation.
Fair value measurement	b. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The marketable securities which are measures at fair value are categorized as Level 1. The carrying amount of the cash and cash equivalents, other receivable and accrued expenses and other liabilities approximates their fair value.
Loss per share	c. Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the three-month period divided by the weighted average number of ordinary shares outstanding during the three-month period. Diluted loss per share is based upon the weighted average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options which are included under the treasury stock method when dilutive. The following share options were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data): Three months ended March 31 2019 2018 Outstanding stock options 4,302,287 3,293,788
Research and development expenses, net	d. Research and development expenses, net Research and development expenses, net for the three-month period ended March 31, 2019 and 2018, include participation in research and development expenses in the amount of approximately $566 thousand and approximately $335 thousand, respectively.
Newly issued accounting pronouncements	e. Newly issued accounting pronouncements 1) In February 2016, the FASB established ASC Topic 842, “Leases” (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition method and has not restated comparative periods. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs for leases entered into prior to adoption of Topic 842. Additionally, the Company did not separate lease and non-lease components for all of its leases. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. Instead, the Company will continue to recognize the lease payments for those leases in profit or loss on a straight-line basis over the lease term. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on its balance sheet for real estate operating leases; and (2) providing significant new disclosures about its leasing activities. Upon adoption, the Company recognized additional operating lease liabilities, of approximately $2.2 million based on the present value of the remaining lease payments under current leasing standards for existing operating leases. The Company also recognized corresponding ROU assets of approximately $2.2 million. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company’s leases may include variable payments based on measures that include changes in price index which are expensed as incurred and presented as operating expense on the condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments. The new standard also provides practical expedients for an entity’s ongoing accounting. Beginning in 2019, the Company changed its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 4a. 2) In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation” to improve the usefulness of information provided to users of financial statements while reducing cost and complexity in financial reporting and provide guidance aligning the measurement and classification for share-based payments to nonemployees with the guidance for share-based payments to employees. Under the guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. This standard, adopted as of January 1, 2019, had no material impact on the Company’s consolidated financial statements.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Schedule of anti-dilutive securities	The following share options were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data): Three months ended March 31 2019 2018 Outstanding stock options 4,302,287 3,293,788

COMMITMENTS AND CONTINGENT LI_2

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Schedule of operating lease expenses and information related to leases	Lease expense for the three months ended March 31, 2019 was comprised of the following: Three months ended March 31, 2019 U.S. dollars in thousands Operating lease expense $ 190 Short-term lease expense 25 Variable lease expense * $ 215 * Represents an amount less than $ 1,000 Supplemental information related to leases are as follows: March 31 2019 U.S. dollars Operating lease right-of-use assets $ 2,047 Current Operating lease liabilities 653 Non-current operating lease liabilities $ 1,409 Other information: Operating cash flows from operating leases (cash paid in thousands) $ 189 Weighted Average Remaining Lease Term 3.08 years Weighted Average Discount Rate 5.36%
Schedule of maturities of lease liabilities	Maturities of lease liabilities are as follows: Amount Year U.S. dollars 2019 (excluding the three months ended March 31, 2019) $ 558 2020 708 2021 640 2022 319 Total lease payments 2,225 Less imputed interest (163 ) Total $ 2,062
Schedule of future contractual obligations	Future contractual obligations under the abovementioned operating lease agreements (not including the Extension Option) as of December 31, 2018 are as follows: Year Amount U.S. dollars 2019 $ 772 2020 721 2021 332 Total $ 1,825

SHARE CAPITAL (Tables)

SHARE CAPITAL (Tables)	3 Months Ended
	Mar. 31, 2019
Shareholders' Equity Note [Abstract]
Schedule of options granted to employees and directors	In the three months ended March 31, 2019 and 2018, the Company granted options as follows: Three months ended March 31, 2019 Number of options granted Exercise price Vesting period Expiration Employees 940,000 $ 7.63 3 years 7 years Three months ended March 31, 2018 Number of options granted Exercise price range Vesting period range Expiration Employees 1,075,000 $5.19-$6.67 3 years 7 years
Schedule of underlying data used for computing the fair value of the options	The fair value of options granted to employees on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: Three months ended March 31 2019 2018 Value of ordinary share $7.46 $5.70-$6.45 Dividend yield 0% 0% Expected volatility 53.32% 45.87%-46.47% Risk-free interest rate 2.57% 2.25%-2.66% Expected term 5 years 5 years
Schedule of effect of share-based compensation	The following table illustrates the effect of share-based compensation on the statements of operations: Three months ended March 31 2019 2018 U.S. dollars in thousands Research and development expenses, net $ 570 $ 360 General and administrative expenses 373 363 $ 943 $ 723

ACCOUNTS PAYBLE AND ACCRUALS _2

ACCOUNTS PAYBLE AND ACCRUALS - OTHER (Tables)	3 Months Ended
	Mar. 31, 2019
Payables and Accruals [Abstract]
Schedule of accounts payble and accruals - other	March 31 December 31 2019 2018 U.S. dollars in thousands Expenses payable $ 5,430 $ 3,400 Current operating lease liabilities (see Note 4a) 653 - Salary and related expenses, including social security and other taxes 624 1,078 Accrual for vacation days and recreation pay for employees 436 309 Other 102 20 $ 7,245 $ 4,807

NATURE OF OPERATIONS AND BASI_2

NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (152,480)	$ (141,824)

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Anti-Dilutive Securities) (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Outstanding stock options [Member]
Antidilutive securities excluded from computation of net loss per share	4,302,287	3,293,788

SIGNIFICANT ACCOUNTING POLICI_5

SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Research and development expenses [Member]
Participation in research and development expenses	$ 566	$ 335
Newly issued accounting pronouncements [Member]
Additional lease liabilities recognized	2,200
Recognized ROU assets	$ 2,200

MARKETABLE SECURITIES (Narrativ

MARKETABLE SECURITIES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]
Marketable securities	$ 800		$ 1,300
Loss from changes in marketable securities	$ 0	$ 73

COMMITMENTS AND CONTINGENT LI_3

COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of lease expense) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Lease Agreements [Abstract]
Operating lease expense	$ 190
Short-term lease expense	25
Variable lease expense		[1]
Total lease expense	$ 215
[1]	Represents an amount less than $ 1,000

COMMITMENTS AND CONTINGENT LI_4

COMMITMENTS AND CONTINGENT LIABILITIES ( Schedule of Supplemental information related to leases) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Lease Agreements [Abstract]
Operating lease right-of-use assets	$ 2,047
Current Operating lease liabilities	653
Non-current operating lease liabilities	1,409
Other information
Operating cash flows from operating leases (cash paid in thousands)	$ 189
Weighted Average Remaining Lease Term	3 years 29 days
Weighted Average Discount Rate	5.36%

COMMITMENTS AND CONTINGENT LI_5

COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of maturities of lease liabilities) (Details) $ in Thousands	Mar. 31, 2019USD ($)
Lease Agreements [Abstract]
2019 (excluding the three months ended March 31, 2019)	$ 558
2020	708
2021	640
2022	319
Total lease payments	2,225
Less imputed interest	(163)
Total	$ 2,062

COMMITMENTS AND CONTINGENT LI_6

COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of future contractual obligations ) (Details) $ in Thousands	Dec. 31, 2018USD ($)
Lease Agreements [Abstract]
2019	$ 772
2020	721
2021	332
Total	$ 1,825

COMMITMENTS AND CONTINGENT LI_7

COMMITMENTS AND CONTINGENT LIABILITIES (Narrative - Lease Agreements) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Lease agreements- Jerusalem [Member]
Bank guarantee	$ 139

COMMITMENTS AND CONTINGENT LI_8

COMMITMENTS AND CONTINGENT LIABILITIES (Narrative - Automated Production Line) (Details) € in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Apr. 30, 2017EUR (€)	Mar. 31, 2019USD ($)	Mar. 31, 2019EUR (€)	Dec. 31, 2018USD ($)	Dec. 31, 2018EUR (€)
Euro | Automated Production Line [Member]
Total cost of automated production line including additional components	€ 8,000
Automated Production Line [Member]
Advances payments for automated production line | $		$ 8,600		$ 8,600
Additional amount recognized as liability | $		$ 621		$ 170
Automated Production Line [Member] | Euro
Advances payments for automated production line			€ 7,400		€ 7,400
Additional amount recognized as liability			€ 553		€ 148

COMMITMENTS AND CONTINGENT LI_9

COMMITMENTS AND CONTINGENT LIABILITIES (Narrative - Establishment of the Commercial Scale Production Capabilities) (Details) € in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Dec. 31, 2018EUR (€)	Mar. 31, 2019USD ($)	Mar. 31, 2019EUR (€)	Dec. 31, 2018USD ($)	Dec. 31, 2018EUR (€)
LTS Production equipment agreement [Member]
Advances payments for production equipment | $		$ 6,100
Advance paid for production equipment | $		1,200
Additional amount recognized as liability in respect to production equipment | $		648		$ 499
Euro | LTS Production equipment agreement [Member]
Total cost of production equipment	€ 7,000
Advances payments for production equipment			€ 5,400
Advance paid for production equipment			1,100
Additional amount recognized as liability in respect to production equipment			577		€ 436
Lohmann Therapie-Systeme [Member]
Additional amount recognized as liability in respect to facility upgrading costs | $		3,000		$ 1,900
Amount of upgrading facility costs to be paid to LTS in the case that the Company decides to not continue with the project or commercialization of AP-CD/LD | $		$ 2,200
Lohmann Therapie-Systeme [Member] | Euro
Additional amount recognized as liability in respect to facility upgrading costs			2,700		€ 1,650
Amount of upgrading facility costs to be paid to LTS in the case that the Company decides to not continue with the project or commercialization of AP-CD/LD			€ 2,000

SHARE CAPITAL (Schedule of Opt

SHARE CAPITAL (Schedule of Options Granted to Employees and Directors) (Details) - Share options [Member] - Employees [Member] - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	940,000	1,075,000
Exercise price range, minimum		$ 5.19
Exercise price range, maximum	$ 7.63	$ 6.67
Vesting period range	3 years	3 years
Expiration	7 years	7 years

SHARE CAPITAL (Schedule of Unde

SHARE CAPITAL (Schedule of Underlying Data Used for Computing the Fair Value of the Options) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Value of ordinary share	$ 7.46
Dividend yield	0.00%	0.00%
Expected volatility	53.32%
Risk-free interest rate	2.57%
Expected term	5 years	5 years
Minimum [Member]
Value of ordinary share		$ 5.70
Expected volatility		45.87%
Risk-free interest rate		2.25%
Maximum [Member]
Value of ordinary share		$ 6.45
Expected volatility		46.47%
Risk-free interest rate		2.66%

SHARE CAPITAL (Schedule of effe

SHARE CAPITAL (Schedule of effect of share-based compensation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based compensation	$ 943	$ 723
Research and development expenses, net [Member]
Share-based compensation	570	360
General and administrative expenses [Member]
Share-based compensation	$ 373	$ 363

SHARE CAPITAL (Narrative - Shar

SHARE CAPITAL (Narrative - Share-based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Jul. 31, 2016	Jan. 31, 2016
Proceeds from exercise of options	$ 257
Exercise of share options [Member]
Options exercised to purchase ordinary shares	64,383
Proceeds from exercise of options	$ 257
Fair value of options granted [Member]
Fair value of options granted	$ 3,400	$ 2,700
2015 Plan [Member]
Number of ordinary shares reserved for issuance under the 2015 plan			1,000,000	2,100,000	700,000	700,000
Number of shares available for grant	418,593

ACCOUNTS PAYBLE AND ACCRUALS _3

ACCOUNTS PAYBLE AND ACCRUALS - OTHER (Schedule of accounts payble and accruals - other) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts payable and accruals - other [Abstract]
Expenses payable	$ 5,430	$ 3,400
Current operating lease liabilities (see Note 4a)	653
Salary and related expenses, including social security and other taxes	624	1,078
Accrual for vacation days and recreation pay for employees	436	309
Other	102	20
Accounts payble and accruals - other	$ 7,245	$ 4,807

EVENT SUBSEQUENT TO MARCH 31,_2

EVENT SUBSEQUENT TO MARCH 31, 2019 (Narrative) (Details) - Subsequent Event [Member] - Grant [Member] $ / shares in Units, $ in Thousands	Apr. 04, 2019USD ($)$ / sharesshares
Fair value on grant date | $	$ 419
Number of options granted | shares	125,000
Exercise price | $ / shares	$ 7.64
Vesting period	3 years
Expiration	7 years