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 |