State of Israel
|
2834
|
Not Applicable
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer Identification No.)
|
Title of each class of securities to be registered
|
Amount to be registered
|
Proposed maximum offering price per security (2)
|
Proposed maximum aggregate offering price
|
Amount of registration fee
|
Ordinary Shares, par value NIS 0.01 per share(1)
|
52,443,010
|
U.S.$0.32(3)
|
U.S.$16,781,764
|
U.S.$1,924
|
Warrants to purchase American Depositary Shares
|
2,622,157
|
--
|
--
|
(4)
|
Ordinary Shares underlying the warrants
|
26,221,570
|
U.S.$0.36(5)
|
U.S.$9,439,766
|
U.S.$1,082
|
1
|
|
7
|
|
29
|
|
30
|
|
31
|
|
32
|
|
33
|
|
34
|
|
35
|
|
36
|
|
37
|
|
50
|
|
75
|
|
87
|
|
104
|
|
105
|
|
107
|
|
111
|
|
120
|
|
127
|
|
128
|
|
128
|
|
129
|
|
130
|
|
F-1
|
This summary highlights selected information contained elsewhere in this prospectus that we consider important. This summary does not contain all of the information you should consider before investing in our ordinary shares. You should read this summary together with the entire prospectus, including the risks related to our most advanced therapeutic candidates, BL-1020, BL-1040, BL-5010, BL-1021 and BL-7040, our business, our industry, investing in our ordinary shares and our location in Israel, that we describe under “Risk Factors” and our consolidated financial statements and the related notes included at the end of this prospectus before making an investment in our ordinary shares.
Our Business
We are a clinical stage biopharmaceutical development company dedicated to identifying, in-licensing and developing therapeutic candidates that have advantages over currently available therapies or that address unmet medical needs. Our current development pipeline consists of five clinical-stage therapeutic candidates: BL-1020, an orally available drug that we believe may be the first antipsychotic therapeutic to improve cognitive function in schizophrenia patients; BL-1021, a new chemical entity in development for the treatment of neuropathic pain, or pain that results from damage to nerve fibers; BL-1040, a novel polymer solution for use in the prevention of cardiac remodeling following an acute myocardial infarction, or AMI; BL-5010, a novel formulation for the non-surgical removal of skin lesions; and BL-7040, an oligonucleotide for the treatment of Inflammatory Bowel Disease (IBD). In addition, we have 13 therapeutic candidates in the preclinical stages of development. We generate our pipeline by systematically identifying, rigorously validating and in-licensing therapeutic candidates that we believe exhibit a relatively high probability of therapeutic and commercial success. None of our therapeutic candidates has been approved for marketing and, to date, there have been no commercial sales of any of our therapeutic candidates. Our strategy includes commercializing our therapeutic candidates through out-licensing arrangements with biotechnology and pharmaceutical companies and evaluating, on a case by case basis, the commercialization of our therapeutic candidates independently.
Our Product Pipeline
The table below summarizes our current pipeline of therapeutic candidates, as well as the target indication and status of each candidate.
|
BL-1020
Our first lead therapeutic candidate, BL-1020, is in development for schizophrenia, a chronic, severe and disabling brain disorder that affects approximately 1% of the U.S. adult population as reported by the National Institute of Mental Health. Schizophrenia patients are typically treated with one of several commercially available antipsychotics, all of which are associated with side effects that reduce patient compliance and do not address the deterioration of cognitive function that affects the daily lives of schizophrenia patients. Despite these drawbacks, the three most commonly used antipsychotics, Risperdal, Zyprexa and Seroquel, reached aggregate sales of approximately $7.1 billion in the United States in 2009, based on the annual reports filed with the U.S. Securities and Exchange Commission, or SEC, by each of Johnson & Johnson, Eli Lilly and Company and AstraZeneca Pharmaceuticals LP, the companies that market those drugs.
BL-1020 is an orally available drug that effectively reduces psychotic symptoms in a way which we believe may also improve cognition. BL-1020 targets the imbalance of two key neurotransmitters implicated in schizophrenia, dopamine and gamma aminobutyric acid, or GABA. We believe that the reduction in psychotic symptoms is attributable to BL-1020’s dopamine antagonism while the improvement in cognition may result from BL-1020’s GABAergic activity.
In our 363-patient phase 2b EAGLE (Effective Anti-psychosis via GABA Level Enhancement) study which was completed in July 2009, BL-1020 matched the antipsychotic efficacy of Risperdal, one of the leading approved antipsychotics, without evidence of the metabolic side effects associated with the use of atypical antipsychotics. Most significantly, BL-1020 demonstrated a clinically relevant and statistically significant improvement in cognition. Currently, there is no commercially available antipsychotic that improves cognitive function and this remains an important unmet medical need in the treatment of schizophrenia and other psychiatric and neurological diseases. In June 2011, we commenced the CLARITY clinical trial with respect to BL-1020. The CLARITY trial is designed to be a randomized, double-blind trial to examine both acute (6 weeks) and long-term (24 weeks) antipsychotic and cognitive efficacy, safety and tolerability of BL-1020 on patients with acute schizophrenia. In May 2011, we received approval to commence the CLARITY trial at 14 trial sites in Romania. The initiation of the trial in Romania took place in May 2011 and the first patient was treated in June 2011. In November 2011 we received approval from the Indian regulatory authorities and the Indian local ethics committees to commence the trial at 18 additional clinical sites in India. We started recruitment in November 2011 and the first patient was treated in December 2011.
In June 2010, we entered into an exclusive, royalty-bearing out-licensing arrangement with Cypress Bioscience with regard to BL-1020, covering the United States, Canada and Mexico, which became effective in August 2010. We received an upfront fee of $30.0 million from Cypress Bioscience upon the effectiveness of the agreement. We are obligated to pay to Bar Ilan Research and Development and Ramot at Tel Aviv University (Ramot), collectively, a royalty payment equal to 22.5% of the net consideration we receive from the out-licensing of BL-1020. We paid Bar Ilan Research and Development and Ramot $6.75 million, in the aggregate, from the $30.0 million upfront fee. We also paid the OCS $3.0 million as partial repayment of grants previously received for the BL-1020 development program.
In January 2011, Royalty Pharma acquired Cypress Bioscience. After the acquisition, we had a number of discussions with Cypress Bioscience and Royalty Pharma and they indicated to us that as a result of a change in their strategy, they believed it was in the best interest of BL-1020’s future commercial potential to consolidate the worldwide rights with our company. Cypress Bioscience expressed its desire that development of BL-1020 continue in a manner that both optimized Cypress Bioscience’s investment in BL-1020 and provided the best long-term commercialization potential. We believe that reacquiring BL-1020 was the best alternative at that time to ensure the timely development of BL-1020 and represents a significant opportunity for our company. Accordingly, on May 10, 2011, we entered into a rights reacquisition agreement with Cypress Bioscience. Under the terms and conditions of the rights reacquisition agreement, the out-license agreement terminated on May 31, 2011, and we reacquired all of the rights to develop and commercialize BL-1020 on that date. In consideration for the reacquisition of the rights, we agreed to pay Cypress Bioscience a royalty equal to 1% of the future net sales of BL-1020, if any, by us, our affiliates or our sublicensees. Notwithstanding the foregoing, the aggregate royalty payment shall not exceed $80.0 million. In
addition, we agreed to pay Cypress Bioscience $10.0 million payable solely from amounts we receive, if any, pursuant to future agreements relating to the further development or commercialization of a product containing BL-1020, either alone or with other therapeutically active ingredients. In connection with the payment, we are required to pay Cypress Bioscience 10% of all payments under any such agreement but in any event, not more than $10.0 million. If any such agreement requires that we incur the costs of certain proposed clinical trials of BL-1020, the payment schedule will be subject to certain deferrals. We have no other outstanding material obligations to Cypress Bioscience under the original out-license agreement, other than standard indemnification obligations. We intend to continue to consider potential out-licensing opportunities for BL-1020, as well as the potential to develop and commercialize BL-1020 internally.
|
BL-1040
Our second lead therapeutic candidate, BL-1040, is a novel resorbable polymer solution for use in the prevention of cardiac remodeling in patients who suffered an AMI. Preventing cardiac remodeling following an AMI may prevent transition to congestive heart failure and/or improve patient survival over the long term. Following an AMI, BL-1040 is administered via intracoronary injection. Upon contact with damaged cardiac tissue, the liquid BL-1040 transitions into a gel within the infarcted cardiac tissue and forms a “scaffold” that supports, retains the shape of, and enhances the mechanical strength of the heart muscle during the recovery and repair phases following an AMI. The data from our preclinical studies indicate that, by supporting the damaged heart tissue, BL-1040 preserves the normal functioning of the heart and the data from our clinical trial indicate that BL-1040 should be safe. After consultation by our sublicensee Ikaria (see below) with the FDA and other comparable regulatory agencies, BL-1040 is being developed as a class III medical device under the FDA’s pre-marketing approval, or PMA, regulatory pathway.
In July 2009, we entered into an exclusive, worldwide out-licensing arrangement with a wholly-owned subsidiary of Ikaria, Inc., or Ikaria, with regard to BL-1040. Under the arrangement, Ikaria is obligated to use commercially reasonable efforts to complete clinical development of, and to commercialize, BL-1040 or a product related thereto. To date, we have received $17.0 million from Ikaria and we are entitled to receive up to an additional $265.5 million from Ikaria upon achievement of certain development, regulatory, and commercial milestones. In addition, we are entitled to receive from Ikaria royalties from net sales of any product developed under the arrangement. We are obligated to pay 28% of all net consideration received under this arrangement to B.G. Negev Technologies, the party from which we in-licensed BL-1020 in 2004. We have agreed to pay Ramot a portion of the payments we make to B.G. Negev Technologies in connection with the in-license arrangement to satisfy contractual obligations between B.G. Negev Technologies and Ramot with respect to certain intellectual property rights to the licensed technology. We have also agreed to indemnify Ramot and certain of its related parties in connection with our use of the technology we in-licensed from B.G. Negev Technologies.
In December 2011 Ikaria commenced PRESERVATION 1, a CE Mark registration clinical trial of BL-1040 (now called “Bioabsorbable Cardiac Matrix,” or BCM by Ikaria). PRESERVATION 1 aims to evaluate the safety and effectiveness of BL-1040 (BCM) for prevention of ventricular remodeling and congestive heart failure when administered following AMI. The trial is a placebo-controlled, randomized, double-blind, multi-country and multi-center trial including approximately 300 patients which are expected to be recruited across 45 sites. This includes approximately 50 Australian patients at 11 clinical trial sites. The BCM device will be administered to subjects who had successful percutaneous coronary intervention with stent placement after ST-segment elevation myocardial infarction (STEMI) and they will then be monitored for six months.
|
BL-5010
Our third clinical-stage therapeutic candidate, BL 5010, is a novel formulation composed of two acids being developed for the removal of skin lesions in a nonsurgical manner. These two acids have already been approved for use in cosmetics. If approved, BL-5010 would be a convenient alternative to invasive, painful and expensive removal treatments for skin lesions and may allow for histological examination. Because treatment with BL-5010 is non-invasive, we believe BL-5010 poses minimal infection risk, and requires no anesthesia or bandaging. BL-5010 recently received European confirmation from the British Standards Institution Notified Body (BSI) in the UK, of the regulatory pathway classification as a Class IIa medical device. We are currently evaluating the most advantageous ways to progress with this therapeutic candidate from a clinical and business perspective.
In June 2009, we announced the initiation of a phase 1/2 clinical trial in 60 patients with seborrheic keratosis in Germany and the Netherlands to assess the safety and efficacy of BL-5010. The study was also designed to assess the feasibility of preserving the cellular structure of skin lesions for subsequent histological exams. The study was completed in September 2010, and positive results were announced in December 2010. The results of the trial show that for 96.7% of patients, the treated lesion fell off within 30 days of a single application of BL-5010. The results also showed that BL-5010 has a good safety profile, as no persistent irreversible adverse effects were observed at the treated site.
BL-1021
Our fourth clinical-stage therapeutic candidate, BL-1021, is a new chemical entity in development for the treatment of neuropathic pain, or pain that results from damage to nerve fibers. Multiple preclinical
in vitro
and
in vivo
studies have shown the safety and efficacy of BL-1021. BL-1021 showed significant reduction in symptoms of neuropathic pain with an enhanced safety profile.
In December 2011, we completed a phase 1a clinical trial to assess safety, tolerability and pharmacokinetics of a single administration of BL-1021 at doses between 10mg and 80mg in healthy volunteers. This clinical trial was a single-site, double-blind, placebo controlled study, carried out at the Hadassah Clinical Research Center in Jerusalem, Israel. Study results demonstrated that a single administration of BL-1021 in the dose range examined was safe and well tolerated, with no significant changes noted in vital signs, ECG or laboratory safety parameters at any dose when compared either to baseline measurements or to the placebo group. In addition, preliminary modeling of the pharmacokinetic data collected in this trial predicts that a once daily administration of BL-1021 at the dose levels assessed will enable reaching effective doses in patients.
BL-7040
Our fifth clinical-stage therapeutic candidate, BL-7040, is an orally available, synthetic oligonucleotide which we intend to develop for the treatment of IBD. This synthetic oligonucleotide consisting of a sequence of nucleic acids, the building blocks of genetic material such as DNA, has unique dual activity. Multiple preclinical
in vivo
studies have shown the safety and efficacy of BL-7040. Previous phase 1b and 2a clinical studies were completed with no major adverse events being reported. We intend to develop the compound for the treatment of IBD and other inflammatory diseases. We plan to enter a phase 2 study of BL-7040 to evaluate the effectiveness of BL-7040 for the treatment of IBD during 2012.
|
Our Product Development Approach
As part of our business strategy, we continuously source, evaluate and in-license therapeutic candidates. We establish and maintain close relationships with research institutes, academic institutions and biotechnology companies in Israel and, more recently, in other countries to identify and in-license therapeutic candidates. Before in-licensing, each therapeutic candidate must pass through our thorough screening process. We evaluate each compound’s potential for success by looking at the candidate’s efficacy, safety profile, total estimated development costs, technological novelty, patent status, market need and approvability, among other information. Our Scientific Advisory Board and disease-specific third-party advisors are active in evaluating each therapeutic candidate. Our approach is consistent with our objective of proceeding only with therapeutic candidates that we believe exhibit a relatively high probability of therapeutic and commercial success. To date, we estimate we have evaluated over 1,500 compounds, and we have presented more than 60 candidates to our Scientific Advisory Board for consideration, initiated development of 41 therapeutic candidates and terminated 23 feasibility programs.
When possible, we make use of third-party funding to develop early-stage therapeutic candidates. In January 2005, we entered into an agreement with the OCS to operate a biotechnology incubator. We develop certain of our in-licensed candidates with financial assistance from the OCS and have received approximately $12.9 million as of June 30, 2010 in the form of loans that are forgiven unless a project reaches commercialization. We have also received $5.8 million in grants from the OCS outside of the incubator agreement as of September 30, 2011. We are not required to repay grants for terminated projects. Of our 18 current development projects, seven have been funded through the OCS: BL-1020, BL-1021, BL-1040, BL-5040, BL-6010, BL-6030 and BL-7020. Other than BL-1020, all of these projects were also funded through our incubator. In addition, in January 2007 we entered into an agreement with one of our existing shareholders, Pan Atlantic Bank and Trust Limited, or Pan Atlantic, pursuant to which Pan Atlantic committed to provide us with grants of up to $5.0 million to be used in connection with the in-licensing and development of early development stage therapeutic candidates.
Our Strategy
Our objective is to be a leader in developing and commercializing innovative pharmaceutical, medical device and biopharmaceutical products.
The key elements of our strategy include the following:
●
facilitate the successful development and commercialization of BL-1040 by Ikaria.
●
commercialize additional therapeutic candidates through out-licensing arrangements or, where appropriate, by ourselves.
●
design development programs that reach critical decisions quickly.
●
use our expertise and proprietary screening methodology to evaluate in-licensing opportunities.
●
leverage and expand our relationships with research institutes, academic institutions and biotechnology companies, including the specific strategic relationships that we have developed with Israeli research and academic institutions, to identify and in-license promising therapeutic candidates.
|
Year Ended December 31,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
Consolidated Statements Of Operations Data:
(1)
|
2006
|
2007
|
2008
|
2009
|
2010
|
2010
|
2011
|
2011
(2)
|
||||||||||||||||||||||||
(in thousands, except share and per share data)
|
||||||||||||||||||||||||||||||||
NIS
|
U.S.$
|
|||||||||||||||||||||||||||||||
Revenues
|
– | – | – | 63,909 | 113,160 | 113,160 | ||||||||||||||||||||||||||
Cost of revenues
|
– | – | – | (22,622 | ) | (25,571 | ) | (25,571 | ) | |||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Research and development, expenses
net
|
(42,193 | ) | (75,863 | ) | (106,156 | ) | (90,302 | ) | (54,966 | ) | (43,769 | ) | (30,044 | ) | (8,094 | ) | ||||||||||||||||
Sales and marketing expenses
|
– | – | – | (3,085 | ) | (4,609 | ) | (3,506 | ) | (2,431 | ) | (655 | ) | |||||||||||||||||||
General and administrative expenses
|
(6,357 | ) | (13,611 | ) | (13,083 | ) | (11,182 | ) | (14,875 | ) | (8,914 | ) | (9,546 | ) | (2,572 | ) | ||||||||||||||||
Gain on adjusting warrants to fair value
|
– | 27,557 | 3,658 | – | – | – | – | – | ||||||||||||||||||||||||
Capital loss, net
|
(121 | ) | – | – | – | – | – | – | – | |||||||||||||||||||||||
Operating profit (loss)
|
(48,671 | ) | (61,917 | ) | (115,581 | ) | (63,282 | ) | 13,139 | 31,400 | (42,021 | ) | (11,321 | ) | ||||||||||||||||||
Financial income
|
584 | 7,875 | 13,001 | 3,928 | 3,056 | 3,056 | 10,785 | 2,906 | ||||||||||||||||||||||||
Financial expenses
|
(834 | ) | (5,377 | ) | (12,269 | ) | (2,164 | ) | (8,755 | ) | (4,931 | ) | (4,750 | ) | (1,279 | ) | ||||||||||||||||
Net profit (loss)
|
(48,921 | ) | (59,419 | ) | (114,849 | ) | (61,518 | ) | 7,440 | 29,525 | (35,986 | ) | (9,694 | ) | ||||||||||||||||||
Net profit (loss) per ordinary share
(3)
|
(1,425.67
|
) | (0.88 | ) | (1.44 | ) | (0.63 | ) | 0.06 | 0.24 | (0.29 | ) | (0.08 | ) | ||||||||||||||||||
Number of ordinary shares used in computing profit (loss) per ordinary share
|
38,521 | 69,302,075 | 78,131,103 | 123,497,029 | 123,512,098 | 123,519,170 | 123,601,141 | 123,601,141 |
As of September 30,
|
||||||||
Consolidated Balance Sheet Data:
|
2011
|
2011
(2)
|
||||||
(in thousands NIS)
|
(in thousands U.S.$)
|
|||||||
Cash and cash equivalents
|
33,895 | 9,131 | ||||||
Short-term bank deposits | 78,564 | 21,165 | ||||||
Property, plant and equipment, net
|
4,076 | 1,098 | ||||||
Total assets
|
123,739 | 33,334 | ||||||
Total liabilities
|
25,020 | 6,739 | ||||||
Total shareholders’ equity
|
98,719 | 26,595 |
|
•
|
a therapeutic candidate or medical device may not prove safe or efficacious;
|
|
•
|
the results with respect to any therapeutic candidate may not confirm the positive results from earlier preclinical studies or clinical trials;
|
|
•
|
the results may not meet the level of statistical significance required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities; and
|
|
•
|
the results will justify only limited and/or restrictive uses, including the inclusion of warnings and contraindications, which could significantly limit the marketability and profitability of the therapeutic candidate.
|
|
•
|
our inability to recruit and retain adequate numbers of effective sales and marketing personnel;
|
|
•
|
the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our therapeutic candidates;
|
|
•
|
the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
|
|
•
|
unforeseen costs and expenses associated with creating and sustaining an independent sales and marketing organization.
|
|
•
|
we may not be able to control the amount and timing of resources that our licensees devote to our therapeutic candidates;
|
|
•
|
our licensees may experience financial difficulties;
|
|
•
|
our licensees may fail to secure adequate commercial supplies of our therapeutic candidates upon marketing approval, if at all;
|
|
•
|
our future revenues will depend heavily on the efforts of our licensees;
|
|
•
|
business combinations or significant changes in a licensee’s business strategy may adversely affect the licensee’s willingness or ability to complete its obligations under any arrangement with us;
|
|
•
|
a licensee could move forward with a competing therapeutic candidate developed either independently or in collaboration with others, including our competitors; and
|
|
•
|
out-licensing arrangements are often terminated or allowed to expire, which would delay the development and may increase the development costs of our therapeutic candidates.
|
|
•
|
attract suitable licensees on reasonable terms;
|
|
•
|
obtain and maintain necessary intellectual property rights to our therapeutic candidates;
|
|
•
|
where appropriate, enter into arrangements with third parties to manufacture our products, if any, on our behalf; and
|
|
•
|
deploy sales and marketing resources effectively or enter into arrangements with third parties to provide these services.
|
|
•
|
delays in securing clinical investigators or trial sites for the clinical trials;
|
|
•
|
delays in obtaining institutional review board and other regulatory approvals to commence a clinical trial;
|
|
•
|
slower than anticipated patient recruitment and enrollment;
|
|
•
|
negative or inconclusive results from clinical trials;
|
|
•
|
unforeseen safety issues;
|
|
•
|
uncertain dosing issues;
|
|
•
|
an inability to monitor patients adequately during or after treatment; and
|
|
•
|
problems with investigator or patient compliance with the trial protocols.
|
|
•
|
reliance on the third party for regulatory compliance and quality assurance;
|
|
•
|
limitations on supply availability resulting from capacity and scheduling constraints of the third parties;
|
|
•
|
impact on our reputation in the marketplace if manufacturers of our products, once commercialized, fail to meet customer demands;
|
|
•
|
the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
|
|
•
|
the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
|
|
•
|
restrictions on such product, manufacturer or manufacturing process;
|
|
•
|
warning letters from the FDA or other regulatory authorities;
|
|
•
|
withdrawal of the product from the market;
|
|
•
|
suspension or withdrawal of regulatory approvals;
|
|
•
|
refusal to approve pending applications or supplements to approved applications that we or our licensees submit;
|
|
•
|
voluntary or mandatory recall;
|
|
•
|
fines;
|
|
•
|
refusal to permit the import or export of our products;
|
|
•
|
product seizure or detentions;
|
|
•
|
injunctions or the imposition of civil or criminal penalties; or
|
|
•
|
adverse publicity.
|
|
•
|
difficulty in large-scale manufacturing;
|
|
•
|
low market acceptance by physicians, healthcare payors, patients and the medical community as a result of lower demonstrated clinical safety or efficacy compared to other products, prevalence and severity of adverse side effects, or other potential disadvantages relative to alternative treatment methods;
|
|
•
|
insufficient or unfavorable levels of reimbursement from government or third-party payors;
|
|
•
|
infringement on proprietary rights of others for which we or our licensees have not received licenses;
|
|
•
|
incompatibility with other therapeutic products;
|
|
•
|
other potential advantages of alternative treatment methods;
|
|
•
|
ineffective marketing and distribution support;
|
|
•
|
lack of cost-effectiveness; or
|
|
•
|
timing of market introduction of competitive products.
|
|
•
|
a covered benefit under its health plan;
|
|
•
|
safe, effective and medically necessary;
|
|
•
|
appropriate for the specific patient;
|
|
•
|
cost-effective; and
|
|
•
|
neither experimental nor investigational.
|
|
•
|
announcements of technological innovations or new products by us or others;
|
|
•
|
announcements by us of significant acquisitions, strategic partnerships, in-licensing, out-licensing, joint ventures or capital commitments;
|
|
•
|
expiration or terminations of licenses, research contracts or other collaboration agreements;
|
|
•
|
public concern as to the safety of drugs we, our licensees or others develop;
|
|
•
|
general market conditions;
|
|
•
|
the volatility of market prices for shares of biotechnology companies generally;
|
|
•
|
success of research and development projects;
|
|
•
|
departure of key personnel;
|
|
•
|
developments concerning intellectual property rights or regulatory approvals;
|
|
•
|
variations in our and our competitors’ results of operations;
|
|
•
|
changes in earnings estimates or recommendations by securities analysts, if our ordinary shares or ADSs are covered by analysts;
|
|
•
|
changes in government regulations or patent decisions;
|
|
•
|
developments by our licensees; and
|
|
•
|
general market conditions and other factors, including factors unrelated to our operating performance.
|
|
•
|
the failure to obtain regulatory approval or achieve commercial success of our therapeutic candidates, including BL-1020, BL-1021, BL-1040, BL-5010 and BL-7040;
|
|
•
|
our success in effecting out-licensing arrangements with third-parties;
|
|
•
|
our success in establishing other out-licensing arrangements;
|
|
•
|
the success of our licensees in selling products that utilize our technologies;
|
|
•
|
the results of our preclinical studies and clinical trials for our earlier stage therapeutic candidates, and any decisions to initiate clinical trials if supported by the preclinical results;
|
|
•
|
the costs, timing and outcome of regulatory review of our therapeutic candidates that progress to clinical trials;
|
|
•
|
the costs of establishing or acquiring specialty sales, marketing and distribution capabilities, if any of our therapeutic candidates are approved, and we decide to commercialize them ourselves;
|
|
•
|
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related claims;
|
|
•
|
the extent to which we acquire or invest in businesses, products or technologies and other strategic relationships; and
|
|
•
|
the costs of financing unanticipated working capital requirements and responding to competitive pressures.
|
|
·
|
the initiation, timing, progress and results of our preclinical studies, clinical trials, and other therapeutic candidate development efforts;
|
|
·
|
our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or clinical trials;
|
|
·
|
our receipt of regulatory approvals for our therapeutic candidates, and the timing of other regulatory filings and approvals;
|
|
·
|
the clinical development, commercialization, and market acceptance of our therapeutic candidates;
|
|
·
|
our ability to establish and maintain corporate collaborations;
|
|
·
|
the interpretation of the properties and characteristics of our therapeutic candidates and of the results obtained with our therapeutic candidates in preclinical studies or clinical trials;
|
|
·
|
the implementation of our business model, strategic plans for our business and therapeutic candidates;
|
|
·
|
the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates and our ability to operate our business without infringing the intellectual property rights of others;
|
|
·
|
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
|
|
·
|
competitive companies, technologies and our industry; and
|
|
·
|
statements as to the impact of the political and security situation in Israel on our business.
|
NIS per U.S. $
|
||||||||||||||||
Year Ended December 31,
|
High
|
Low
|
Average
|
Period End
|
||||||||||||
2011
|
3.821 | 3.363 | 3.578 | 3.821 | ||||||||||||
2010
|
3.894 | 3.549 | 3.730 | 3.549 | ||||||||||||
2009
|
4.256 | 3.690 | 3.923 | 3.775 | ||||||||||||
2008
|
4.022 | 3.230 | 3.586 | 3.802 | ||||||||||||
2007
|
4.342 | 3.830 | 4.110 | 3.846 | ||||||||||||
2006
|
4.725 | 4.176 | 4.453 | 4.225 |
NIS per U.S. $
|
||||||||||||||||
Month
|
High
|
Low
|
Average
|
Period End
|
||||||||||||
February 2012 (through February 27, 2012)
|
3.803
|
3.700 |
3.737
|
3.803
|
||||||||||||
January 2012
|
3.854 | 3.733 | 3.809 | 3.733 | ||||||||||||
December 2011
|
3.821 | 3.727 | 3.774 | 3.821 | ||||||||||||
November 2011
|
3.800 | 3.650 | 3.726 | 3.793 | ||||||||||||
October 2011
|
3.763 | 3.602 | 3.666 | 3.604 | ||||||||||||
September 2011
|
3.725 | 3.574 | 3.681 | 3.712 | ||||||||||||
August 2011
|
3.626 | 3.412 | 3.543 | 3.558 |
NIS
|
U.S.$
|
|||||||||||||||
Price Per
Ordinary Share
|
Price Per
Ordinary Share
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
Annual:
|
||||||||||||||||
2011
|
3.24 | 1.13 | 0.91 | 0.30 | ||||||||||||
2010
|
4.75 | 2.86 | 1.26 | 0.80 | ||||||||||||
2009
|
5.68 | 0.86 | 1.53 | 0.23 | ||||||||||||
2008
|
4.25 | 0.69 | 1.10 | 0.17 | ||||||||||||
2007 (from February 8, 2007)
|
6.65 | 3.80 | 1.57 | 0.89 | ||||||||||||
Quarterly:
|
||||||||||||||||
Fourth Quarter 2011
|
1.48 | 1.14 | 0.41 | 0.30 | ||||||||||||
Third Quarter 2011
|
1.92 | 1.13 | 0.56 | 0.30 | ||||||||||||
Second Quarter 2011
|
2.54 | 1.58 | 0.74 | 0.45 | ||||||||||||
First Quarter 2011
|
3.24 | 2.15 | 0.91 | 0.60 | ||||||||||||
Fourth Quarter 2010
|
3.59 | 2.86 | 0.99 | 0.80 | ||||||||||||
Third Quarter 2010
|
3.82 | 3.21 | 1.01 | 0.87 | ||||||||||||
Second Quarter 2010
|
4.69 | 3.00 | 1.27 | 0.78 | ||||||||||||
First Quarter 2010
|
4.75 | 3.80 | 1.26 | 1.03 | ||||||||||||
Fourth Quarter 2009
|
5.68 | 3.50 | 1.53 | 0.93 | ||||||||||||
Third Quarter 2009
|
4.60 | 1.74 | 1.22 | 0.44 | ||||||||||||
Second Quarter 2009
|
2.79 | 1.33 | 0.72 | 0.32 | ||||||||||||
First Quarter 2009
|
1.86 | 0.86 | 0.47 | 0.23 | ||||||||||||
Most Recent Six Months:
|
||||||||||||||||
February 2012 (through February 27, 2012)
|
1.87 |
1.21
|
0.50 |
0.32
|
||||||||||||
January 2012
|
2.12 | 1.16 | 0.56 | 0.30 | ||||||||||||
December 2011
|
1.29 | 1.14 | 0.34 | 0.30 | ||||||||||||
November 2011
|
1.35 | 1.15 | 0.37 | 0.30 | ||||||||||||
October 2011
|
1.48 | 1.18 | 0.41 | 0.31 | ||||||||||||
September 2011
|
1.39 | 1.13 | 0.39 | 0.30 | ||||||||||||
August 2011
|
1.62 | 1.17 | 0.48 | 0.33 | ||||||||||||
July 2011
|
1.92 | 1.65 | 0.56 | 0.48 |
U.S.$
|
||||||||
Price Per
ADS
|
||||||||
High
|
Low
|
|||||||
Annual:
|
||||||||
2011 (from July 25, 2011)
|
5.59 | 2.75 | ||||||
Quarterly:
|
||||||||
First Quarter 2012(through February 27, 2012)
|
5.55 | 2.90 | ||||||
Fourth Quarter 2011
|
4.21 | 3.01 | ||||||
Third Quarter 2011(from July 25, 2011)
|
5.59 | 2.75 | ||||||
Most Recent Six Months:
|
||||||||
February 2012 (through February 27, 2012)
|
4.45
|
3.10
|
||||||
January 2012
|
5.55 | 2.90 | ||||||
December 2011
|
3.38 | 3.01 | ||||||
November 2011
|
3.96 | 3.08 | ||||||
October 2011
|
4.21 | 2.85 | ||||||
September 2011
|
4.00 | 2.75 |
As of September, 2011
|
|||||||
(NIS
in thousands)
|
(U.S.$
in thousands)
(1)
|
||||||
Long-term liabilities:
|
|||||||
Long term loan, less current maturities
|
191
|
51
|
|||||
Shareholders’ equity:
|
|||||||
Ordinary shares
|
1,236
|
333
|
|||||
Warrants
|
6,549
|
1,764
|
|||||
Share premium
|
414,780
|
111,740
|
|||||
Capital reserve
|
30,023
|
8,088
|
|||||
Accumulated loss
|
(353,869
|
)
|
(95,330
|
)
|
|||
Total shareholder’s equity
|
98,719
|
26,595
|
|||||
Total capitalization (debt and equity)
|
98,910
|
26,646
|
Year Ended December 31, |
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
Consolidated Statements Of Operations Data: (1)
|
2006
|
2007
|
2008
|
2009
|
2010
|
2010
|
2011
|
2011 (2)
|
||||||||||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||
NIS |
U.S.$
|
|||||||||||||||||||||||||||||||
Revenues
|
- | - | - | 63,909 | 113,160 | 113,160 | - | - | ||||||||||||||||||||||||
Cost of revenues
|
- | - | - | (22,622 | ) | (25,571 | ) | (25,271 | ) | - | - | |||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Sales and marketing expenses
|
- | - | - | (3,085 | ) | (4,609 | ) | (3,506 | ) | (2,431 | ) | (655 | ) | |||||||||||||||||||
Research and development, expenses net
|
(42,193 | ) | (75,863 | ) | (106,156 | ) | (90,302 | ) | (54,966 | ) | (43,769 | ) | (30,044 | ) | (8,094 | ) | ||||||||||||||||
General and administrative expenses
|
(6,357 | ) | (13,611 | ) | (13,083 | ) | (11,182 | ) | (14,875 | ) | (8,914 | ) | (9,546 | ) | (2,572 | ) | ||||||||||||||||
Gain on adjusting warrants to fair value
|
- | 27,557 | 3,658 | - | - | - | - | - | ||||||||||||||||||||||||
Capital loss, net |
(121
|
) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Operating profit (loss)
|
(48,671 | ) | (61,917 | ) | (115,581 | ) | 63,282 | 13,139 | 31,400 | (42,021 | ) | (11,321 | ) | |||||||||||||||||||
Financial income
|
584 | 7,875 | 13,001 | 3,928 | 3,056 | 3,056 | 10,785 | 2,906 | ||||||||||||||||||||||||
Financial expenses
|
(834 | ) | (5,377 | ) | (12,269 | ) | (2,164 | ) | (8,755 | ) | (4,931 | ) | (4,750 | ) | (1,279 | ) | ||||||||||||||||
Net profit (loss)
|
(48,921 | ) | (59,419 | ) | (114,849 | ) | (61,158 | ) | 7,440 | 29,525 | (35,986 | ) | (9,694 | ) | ||||||||||||||||||
Net profit (loss) per ordinary share (3)
|
(1,425.67
|
) | (0.88 | ) | (1.44 | ) | (0.63 | ) | 0.06 | 0.24 | (0.29 | ) | (0.08 | ) | ||||||||||||||||||
Number of ordinary shares used in computing loss per ordinary share
|
38,521 | 69,302,075 | 78,131,103 | 123,497,029 | 123,558,660 | 123,519,170 | 123,601,141 | 123,601,141 |
As of September 30,
|
||||||||
Consolidated Balance Sheet Data:
|
2011
|
2011 (2)
|
||||||
(in thousands NIS)
|
(in thousands U.S.$)
|
|||||||
Cash and cash equivalents
|
33,895 | 9,131 | ||||||
Short-term bank deposits | 78,564 | 21,165 | ||||||
Property, plant and equipment, net
|
4,076 | 1,098 | ||||||
Total assets
|
123,739 | 33,334 | ||||||
Total liabilities
|
25,020 | 6,739 | ||||||
Total shareholders’ equity (capital deficiency)
|
98,719 | 26,595 |
(1)
|
Data on diluted loss per share was not presented in the financial statements because the effect of the exercise of the options is either immaterial or is anti-dilutive.
|
(2)
|
Calculated using the exchange rate reported by the Bank of Israel for September 30, 2011 at the rate of one U.S. dollar per NIS 3.712.
|
(3)
|
The net loss per share has been adjusted to reflect the benefit component related to the issuance of rights to investors in 2009.
|
|
•
|
BL-1020 is an orally available drug in development for the treatment of schizophrenia. In September 2009, we announced positive topline results from a phase 2b clinical trial of BL-1020. In June 2011, we commenced the CLARITY trial of BL-1020, which is currently being carried out at 14 clinical sites in Romania and 18 additional sites in India..
|
|
•
|
BL-1040 is a novel resorbable polymer solution for use in the prevention of cardiac remodeling that may occur in patients who have suffered an AMI. BL-1040 is being developed as a medical device. In March 2010, we announced positive results from a phase 1/2 clinical trial. We have entered into an exclusive, worldwide, royalty-bearing out-licensing arrangement with Ikaria with respect to the development, manufacture and commercialization of BL-1040. In December 2011, Ikaria commenced PRESERVATION 1, a CE Mark registration clinical trial of BL-1040 (now called by Ikaria “Bioabsorbable Cardiac Matrix,” or BCM).
|
|
•
|
BL-5010 is a novel therapeutic candidate for the non-surgical removal of skin lesions. In December 2010, we announced positive results from a phase 1/2 clinical trial of BL-5010. BL-5010 recently received European confirmation from the British Standards Institution Notified Body (BSI) in the UK, of the regulatory pathway classification as a Class IIa medical device. We are currently evaluating the most advantageous ways to progress with this therapeutic candidate from a regulatory, clinical and business perspective.
|
|
•
|
BL-1021 is a new chemical entity in development for the treatment of neuropathic pain. We recently completed a phase 1a clinical trial to assess safety, tolerability and pharmacokinetics of a single administration of BL-1021 at doses between 10 mg and 80 mg in healthy volunteers. Study results demonstrated that a single administration of BL-1021 in the dose range examined was safe and well tolerated, with no significant changes noted in vital signs, ECG or laboratory safety parameters at any dose when compared either to baseline measurements or to the placebo group. In addition, preliminary modeling of the pharmacokinetic data collected in this trial predicts that a once daily administration of BL-1021 at the dose levels assessed will enable reaching effective doses in patients.
|
|
•
|
BL-7040 is a synthetic oligonucleotide which we intend to develop for the treatment of IBD. It is an orally-available, synthetic oligonucleotide with unique dual activity on both the nervous and immune systems. We anticipate commencing a phase 2 study to evaluate the effectiveness of BL-7040 for the treatment of IBD during 2012.
|
Project
|
Status
|
Expected or Recent Near Term Milestone
|
||
BL-1020
|
Phase 2/3 CLARITY trial
|
CLARITY study results - H1 2013
|
||
BL-1040
|
CE registration pivotal trial
|
Study results - 2013
|
||
BL-5010
|
Completed phase 1/2
|
We are currently evaluating the most advantageous ways to progress with this therapeutic candidate from a clinical and business perspective.
|
||
BL-1021
|
Completed Phase 1a
|
Phase 1b multiple ascending dose study
|
||
BL-7040
|
Completed phase 1 and phase 2 for other indication
|
Phase 2 study to evaluate the effectiveness of BL-7040 for the treatment of IBD during 2012
|
(1)
|
Does not include indirect project costs and overhead, including payroll and related expenses (including stock-based compensation), facilities, depreciation and impairment of intellectual property, which are included in total research and development expenses in our financial statements.
|
|
•
|
the number of sites included in the clinical trials;
|
|
•
|
the length of time required to enroll suitable patients;
|
|
•
|
the number of patients that participate in the clinical trials;
|
|
•
|
the duration of patient follow-up;
|
|
•
|
whether the patients require hospitalization or can be treated on an out-patient basis;
|
|
•
|
the development stage of the therapeutic candidate; and
|
|
•
|
the efficacy and safety profile of the therapeutic candidate.
|
|
•
|
we have transferred to the licensee the significant risks and rewards of the rights to the patents and intellectual property;
|
|
•
|
we do not retain either the continuing managerial involvement to the degree usually associated with ownership or the effective control over the patents and intellectual property;
|
|
•
|
we can reliably measure the amount of revenue to be recognized;
|
|
•
|
it is probable that the economic benefits associated with the transaction will flow to us; and
|
|
•
|
we can reliably measure the costs incurred or to be incurred in respect of the out-licensing.
|
Three Months Ended
|
||||||||||||||||||||||||||||||||||||||||||||
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
March 31
|
June 30
|
Sept. 30
|
||||||||||||||||||||||||||||||||||
2009
|
2010
|
2011
|
||||||||||||||||||||||||||||||||||||||||||
(in thousands NIS)
|
||||||||||||||||||||||||||||||||||||||||||||
Consolidated statements of Operations
|
||||||||||||||||||||||||||||||||||||||||||||
Revenues
|
26,138 | 37,771 | 113,160 | |||||||||||||||||||||||||||||||||||||||||
Cost of revenues
|
(7,340 | ) | (15,282 | ) | (25,571 | ) | ||||||||||||||||||||||||||||||||||||||
Sales and marketing expenses
|
(423 | ) | (1,045 | ) | (329 | ) | (3,085 | ) | (959 | ) | (1,225 | ) | (1,322 | ) | (1,103 | ) | (750 | ) | (1,323 | ) | (358 | ) | ||||||||||||||||||||||
Research and development expenses, net
|
(26,486 | ) | (23,364 | ) | (32,636 | ) | (7,816 | ) | (10,736 | ) | (26,296 | ) | (6,737 | ) | (11,197 | ) | (6,384 | ) | (10,405 | ) | (13,255 | ) | ||||||||||||||||||||||
General and administrative expenses
|
(2,545 | ) | (1,771 | ) | (2,932 | ) | (2,137 | ) | (2,935 | ) | (3,289 | ) | (2,690 | ) | (5,961 | ) | (2,926 | ) | (3,348 | ) | (3,272 | ) | ||||||||||||||||||||||
Operating profit (loss)
|
(29,454 | ) | (26,180 | ) | (17,099 | ) | 9,451 | (14,630 | ) | (30,810 | ) | 76,840 | (18,261 | ) | (10,060 | ) | (15,076 | ) | (16,855 | ) | ||||||||||||||||||||||||
Financial income, net
|
3,790 | 9 | 63 | 66 | 193 | 2,685 | 178 | – | 1,183 | 637 | 8,965 | |||||||||||||||||||||||||||||||||
Financial expenses, net
|
(29 | ) | (1,710 | ) | (181 | ) | (244 | ) | (1,038 | ) | (24 | ) | (3,869 | ) | (3,824 | ) | (2,767 | ) | (1,965 | ) | (18 | ) | ||||||||||||||||||||||
Net profit (loss)
|
(25,693 | ) | (27,881 | ) | (17,217 | ) | 9,273 | (15,475 | ) | (28,149 | ) | 73,149 | (22,085 | ) | (11,644 | ) | (16,404 | ) | (7,938 | ) |
|
•
|
the progress and costs of our preclinical studies, clinical trials and other research and development activities;
|
|
•
|
the scope, prioritization and number of our clinical trials and other research and development programs;
|
|
•
|
the amount of revenues we receive under our collaboration or licensing arrangements;
|
|
•
|
the costs of the development and expansion of our operational infrastructure;
|
|
•
|
the costs and timing of obtaining regulatory approval of our therapeutic candidates;
|
|
•
|
the ability of our collaborators to achieve development milestones, marketing approval and other events or developments under our collaboration agreements;
|
|
•
|
the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
|
|
•
|
the costs and timing of securing manufacturing arrangements for clinical or commercial production;
|
|
•
|
the costs of establishing sales and marketing capabilities or contracting with third parties to provide these capabilities for us;
|
|
•
|
the costs of acquiring or undertaking development and commercialization efforts for any future product candidates;
|
|
•
|
the magnitude of our general and administrative expenses;
|
|
•
|
any cost that we may incur under current and future licensing arrangements relating to our therapeutic candidates; and
|
|
•
|
payments to the OCS.
|
Total
|
Less than
1 year
|
1 – 3 years
|
3 – 5 years
|
More than
5 years
|
||||||||||||||||
(in NIS)
|
||||||||||||||||||||
Car leasing obligations
|
2,232,000 | 1,104,000 | 1,128,000 | – | – | |||||||||||||||
Premises leasing obligations
|
1,073,000 | 874,000 | 199,000 | – | – | |||||||||||||||
Purchase commitments
|
5,468,000 | 5,468,000 | – | – | – | |||||||||||||||
Total
|
8,773,000 | 7,446,000 | 1,327,000 | – | – |
|
•
|
continually build our pipeline of therapeutic candidates;
|
|
•
|
advance those therapeutic candidates with the greatest potential;
|
|
•
|
quickly identify, and terminate the development of, unattractive therapeutic candidates; and
|
|
•
|
avoid dependency on a small number of therapeutic candidates.
|
|
•
|
Facilitate the successful development and commercialization of BL-1040 by Ikaria.
We intend to assist our licensee, Ikaria, to develop and commercialize BL-1040. We are currently meeting with Ikaria on a quarterly basis to facilitate the transition of our BL-1040 assets to its organization and intend to lend our assistance and provide our expertise in their development and commercialization efforts as necessary.
|
|
•
|
Commercialize additional therapeutic candidates through out-licensing arrangements or, where appropriate, by ourselves.
We intend to commercialize many of our products through out-licensing arrangements with third parties who may perform any or all of the following tasks: completing development, securing regulatory approvals, manufacturing and/or marketing. If appropriate, we may enter into co-development and similar arrangements with respect to any therapeutic candidate with third parties or commercialize a therapeutic candidate ourselves.
|
|
•
|
Design development programs that reach critical decisions quickly.
At each step of our screening process for therapeutic candidates, a candidate is subjected to rigorous feasibility testing and potential advancement or termination. We believe our feasibility approach reduces costs and increases the probability of commercial success by eliminate less promising candidates quickly before advancing them into more costly preclinical and clinical programs.
|
|
•
|
Use our expertise and proprietary screening methodology to evaluate in-licensing opportunities.
In order to review and select among various candidates efficiently and effectively, we employ a rigorous screening system we developed. Our Scientific Advisory Board and disease-specific third-party advisors evaluate each candidate. We intend to in-license a sufficient number of therapeutic candidates to allow us to move a new therapeutic candidate into clinical development every 12 to 24 months.
|
|
•
|
Leverage and expand our relationships with research institutes, academic institutions and biotechnology companies, including the specific strategic relationships that we have developed with Israeli research and academic institutions, to identify and in-license promising therapeutic candidates.
To date, we have successfully in-licensed compounds from many major Israeli universities, as well as from many Israeli hospitals, technology incubators and biotechnology companies. We continue to maintain close contacts with university technology transfer offices, research and development authorities, university faculty, and many biotechnology companies to actively seek out early stage compounds. In addition, we actively source and evaluate non-Israeli compounds although we currently do not have any compound in our pipeline that was sourced outside of Israel.
|
Endpoint
|
|
Placebo
|
BL-1020
(20 – 30mg)
|
Risperdal
|
||
PANSS
|
|
-14.4
|
-23.6
P=0.002 (vs. placebo)
P=0.39 (vs. Risperdal)
|
-26.2
P<0.001 (vs. placebo)
|
||
CGI-S
|
|
-0.68
|
-1.27
P<0.001 (vs. placebo)
P=0.607 (vs. Risperdal)
|
-1.35
P<0.001 (vs. placebo)
|
||
Strauss Carpenter Level of
Functioning Scale
|
|
0.20
|
1.93
P=0.017 (vs. placebo)
P=0.563 vs. Risperdal
|
2.35
P=0.003 (vs. placebo)
|
||
Clinical Responders
|
|
47.3%
|
70.8%
P=0.01 (vs. placebo)
P= 0.796 vs. Risperdal
|
72.5%
P<0.001 (vs. placebo)
|
Parameter
|
|
Placebo
|
BL-1020
(20 – 30mg)
|
Risperdal
|
||
BACS
(LS mean, LOCF)
|
|
6.01
|
9.27
|
6.2
|
||
P value vs. placebo
|
|
P=0.027
|
P=0.893
|
|||
P value vs. Risperdal
|
|
P=0.027
|
Parameter
|
|
Placebo
|
BL-1020
(20 – 30mg)
|
Risperdal
|
||
Severe Adverse Events
(SAE, % patients)
|
|
6.5
|
0
|
3.3
|
||
Discontinuation due to Adverse Events
(AE, %)
|
|
4.3
|
4.5
|
8.8
|
||
ESRS
|
|
1.6
|
10.8
|
10.8
|
||
Metabolic – weight gain
(% notable gain)
|
3.6
|
4.9
|
7.3
|
|||
Metabolic – cholesterol
|
No change
|
No change
|
No change
|
Therapeutic
|
||||||||
Candidate
|
Description
|
Indication
|
Status
|
In-Licensing Source
|
||||
BL-5040
|
Protein
|
IBD/Cachexia
|
Preclinical studies
|
Yissum Ltd.
|
||||
BL-6010
|
Small molecule
|
Type 2 Diabetes
|
Preclinical studies
|
Bar Ilan Research and Development
|
||||
BL-6020
|
Small molecule
|
Cancer Cachexia
|
Preclinical studies
|
Santhera Pharmaceuticals
|
||||
BL-6030
|
Small molecule
|
Bacterial Infection
|
Preclinical studies
|
Yissum Ltd.
|
||||
BL-6040
|
Small molecule
|
Rheumatoid Arthritis
|
Preclinical studies
|
Yissum Ltd.
|
||||
BL-7010
|
Polymer
|
Celiac Disease
|
Preclinical studies
|
Gestion Univalor, Limited Partnership
|
||||
BL-7020
|
Protein
|
Psoriasis
|
Preclinical studies
|
Tel Aviv Sourasky Medical Center and BioRap Technologies Ltd.
|
||||
BL-7030
|
Small molecule
|
Cancer
|
Preclinical studies
|
Algen Biopharmaceuticals Inc. (licensee of Yissum Ltd.)
|
||||
BL-7050
|
Small molecule
|
Neuropathic Pain
|
Preclinical studies
|
Ramot
|
||||
BL-7060
|
Peptide
|
Acute Myocardial Infarction
|
Preclinical studies
|
Compugen Ltd.
|
||||
BL-8010
|
Peptide
|
Retinopathy
|
Preclinical studies
|
Compugen Ltd.
|
||||
BL-8020
|
Small molecule
|
Hepatitis C
|
Preclinical studies
|
Genoscience
|
||||
BL-8030
|
Small molecule
|
Hepatitis C
|
Preclinical studies
|
Genoscience and RFS Pharma
|
|
•
|
Revenue sharing payments
. These are payments to be made to licensors with respect to revenue we receive from sub-licensing to third parties for further development and commercialization of our drug products. These payments are generally fixed at a percentage of the total revenues we earn from these sub-licenses.
|
|
•
|
Milestone payments
. These payments are generally linked to the successful achievement of milestones in the development and approval of drugs, such phases 1, 2 and 3 of clinical trials and approvals of new drug applications, or NDAs.
|
|
•
|
Royalty payments
. To the extent we elect to complete the development, licensing and marketing of a therapeutic candidate, we are generally required to pay our licensors royalties on the sales of the end drug product. These royalty payments are generally based on the net revenue from these sales. In certain instances, the rate of the royalty payments decrease upon the expiration of the drug’s underlying patent and its transition into a generic drug. Certain of our agreements provide that if a licensed drug product is developed and sold through a different corporate entity, the licensors may elect to receive shares in such company instead of a portion of the royalties.
|
|
•
|
Additional payments
. In addition to the above payments, certain of our in-license agreements provide for a one-time or periodic payment that is not linked to milestones. Periodic payments may be paid until the commercialization of the product, either by direct sales or sub-licenses to third parties. Other agreements provide for the continuation of these payments even following the commercialization of the licensed drug product.
|
|
•
|
With respect to BL-1020, we have an exclusive license to a patent family that covers the molecule that is the active ingredient of our proprietary anti-psychotic drug and methods of its use for the treatment of, e.g., schizophrenia. Patents of this family have been granted or received notice of allowance in the United States, Israel, Europe, Australia, Japan, China, India and South Korea. The patents and any patents to issue in the future based on pending patent applications in this family will expire, without extension, beginning in September 2022. In addition, we have an exclusive license to a patent family claiming the use of BL-1020 for improving cognitive functions. Any patents to issue in the future based on this international patent application will expire, without extension, in 2030. In addition we have an exclusive license to a patent family claiming a novel crystalline form of BL-1020. Any patents to issue in the future based on this international patent application will expire, without extension, in 2031.
|
|
•
|
With respect to BL-1040, we have an exclusive license to a patent family directed to the BL-1040 composition and methods of its use for the treatment of myocardial infarction. Patents of this family have been granted or received notice of allowance in the USA, India, China and Australia. Additional member patent applications are pending in Israel, Europe, Japan, Canada, and South Korea. The US patent will expire in 2026. Other issued patents and any patents to issue in the future based on pending patent applications in these families will expire, without an extension, in 2024.
|
|
•
|
With respect to BL-5010, we have an exclusive license to a patent family directed to the BL-5010 composition and its use for the removal and preservation of skin lesions. Patents and patent applications corresponding to the international patent application have been granted or are pending in the United States, Israel and Europe. The issued patents and any patents to issue in the future based on pending patent applications in these families will expire beginning in the end of 2021.
|
|
•
|
With respect to BL-1021, we have an exclusive license to a patent family that claims the molecule that is the active ingredient of our proprietary drug. Patents and patent applications corresponding to the international patent application have been granted or are pending in the United States, Israel, Europe, Australia, Japan, Canada, China, India, South Korea and Mexico. The patents and any patents to issue in the future based on pending patent applications in this family will expire, without extension, beginning in 2022. We also have an exclusive license to a patent family claiming the use of BL-1021 for the treatment of pain. Patents and patent applications corresponding to the international patent application are pending in the United States, Israel, Europe, Australia, Japan, Canada, China, India, South Korea and Mexico. The patents and any patents to issue in the future based on pending patent applications in this family will expire, without extension, beginning in 2027.
|
|
•
|
With respect to BL-7040, we have an exclusive license to a patent family that relates to the molecule that is the active ingredient of our proprietary drug. Patents and patent applications corresponding to the international patent application have been granted or are pending in the United States, Israel, Europe, Japan, Canada, New Zealand and India. The patents and any patents to issue in the future based on pending patent applications in this family will expire, without extension, beginning in 2021. We also have an exclusive license to a patent family claiming the use of BL-7040 for the treatment of inflammation such as IBD. Patents and patent applications corresponding to the international patent application are pending in the United States, Europe and Japan. The patents and any patents to issue in the future based on pending patent applications in this family will expire, without extension, beginning in 2023.
|
|
•
|
screen all potential in-licensing and current therapeutic candidates;
|
|
•
|
oversee our research and development programs; and
|
|
•
|
address specific scientific and technical issues relevant to our business.
|
Name
|
Position/Institutional Affiliation
|
|
J. Aaron Ciechanover, M.D., Ph.D.
|
Professor Ciechanover is a Nobel Prize laureate in Chemistry (2004) and a recipient of the Israel Prize (2000) in Biological Research and the prestigious Lasker Award (2000). Professor Ciechanover is the Director of the Rappaport Family Institute for Research in the medical sciences and is a professor of biochemistry at the Technion — Israel Institute of Technology.
|
|
Aliza Eshkol, Ph.D.
|
Dr. Eshkol is Vice President for Scientific Affairs, Serono International SA, Geneva, Switzerland.
|
|
David Ladkani, M.D.
|
Dr. Ladkani is the Chief Scientific Officer, Global Products Division, of Teva. Dr. Ladkani has received the prestigious Rothschild Award for innovation, and is widely published in the field of multiple sclerosis treatments.
|
|
Yaakov Naparstek, M.D.
|
Professor Naparstek is the Chairman of Medicine of Hadassah University Hospital. His main research interests are in the field of autoimmunity, systemic lupus erythematosus and autoimmune arthritis.
|
|
Moshe Phillip, M.D.
|
Professor Phillip has been our Vice President of Medical Affairs and Senior Clinical Advisor and a member of our Scientific Advisory Board since 2004. Professor Phillip is the Director of the Institute for Endocrinology and Diabetes of the Israel National Center for Childhood Diabetes at Schneider Children’s Medical Center of Israel and the Vice Dean for Research and Development at the Sackler School of Medical Education at Tel Aviv University.
|
|
Itamar Shalit, M.D.
|
Professor Shalit is the Director of the Pediatric Infectious Disease Unit at the Schneider Children’s Medical Center in Israel. Dr. Shalit is the author of over 70 publications in scientific journals and chapters in textbooks and currently serves as the Chairman of the Israeli Society for Infectious Diseases.
|
|
Yosef Yarden, Ph.D.
|
Professor Yarden is the Dean of the Feinberg Graduate School of the Weizmann Institute of Science. He serves on numerous national and international boards and the scientific advisory committees of several organizations, both academic and commercial, including serving as a Council Member of the European Association for Cancer Research.
|
|
•
|
preclinical laboratory tests, animal studies and formulation studies;
|
|
•
|
submission to the FDA of a request for an investigational new drug, or IND, to conduct human clinical testing;
|
|
•
|
adequate and well controlled clinical trials to determine the safety and efficacy of the drug for each indication;
|
|
•
|
submission to the FDA of a new drug application, or NDA;
|
|
•
|
a potential public hearing of an outside advisory committee to discuss the application;
|
|
•
|
satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is manufactured; and
|
|
•
|
FDA review and approval of the NDA.
|
|
•
|
Class I: general controls, such as labeling and adherence to Quality System Regulations, or QSRs;
|
|
•
|
Class II: general controls, pre-market notification (510(k)), and specific controls such as performance standards, patient registries, and postmarket surveillance; and
|
|
•
|
Class III: general controls and approval of a PMA.
|
|
•
|
having the same qualitative and quantitative composition in active substance as the reference medicinal product;
|
|
•
|
having the same pharmaceutical form as the reference medicinal product; and
|
|
•
|
whose bioequivalence with the reference medicinal product has been demonstrated by appropriate bioavailability studies.
|
Name
|
Age
|
Position(s)
|
||
Kinneret Savitsky, Ph.D.
|
44
|
Chief Executive Officer
|
||
Philip Serlin
|
51
|
Chief Financial Officer and Chief Operating Officer
|
||
Moshe Phillip, M.D.
|
57
|
Vice President of Medical Affairs and Senior Clinical Advisor
|
||
Leah Klapper, Ph.D.
|
47
|
General Manager, BioLine Innovations Jerusalem
|
||
David Malek
|
34
|
Vice President of Business Development
|
||
Aharon Schwartz, Ph.D.
|
69
|
Chairman of the Board
|
||
Raphael Hofstein, Ph.D.
|
62
|
Director
|
||
Yakov Friedman
|
43
|
Director
|
||
Michael J. Anghel, Ph.D.
|
72
|
Director
|
||
Avraham Molcho, M.D.
|
54
|
External Director
|
||
Nurit Benjamini
|
45
|
External Director
|
Salaries, fees, commissions and
bonuses (NIS)
|
Pension, retirement, options and other
similar benefits (NIS)
|
|||||||
All directors and senior management as a group, consisting of 9
(1)
persons
|
3,878,000 | 2,176,000 |
|
•
|
the majority of the shares that are voted at the meeting, including at least a majority of the shares held by non-controlling shareholders who do not have a personal interest in the election of the external director (other than a personal interest not deriving from a relationship with a controlling shareholder) who voted at the meeting, excluding abstentions, vote in favor of the election of the external director; or
|
|
•
|
the total number of shares held by non-controlling, disinterested shareholders (as described in the preceding bullet point) that are voted against the election of the external director does not exceed 2% of the aggregate voting rights in the company.
|
|
•
|
an employment relationship;
|
|
•
|
a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships);
|
|
•
|
control; and
|
|
•
|
service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the public offering.
|
|
•
|
the chairman of the company’s board of directors;
|
|
•
|
a controlling shareholder or a relative of a controlling shareholder of the company (as each such term is defined in the Israeli Companies Law); or
|
|
•
|
any director employed by the company, by a controlling shareholder of the company or by any other entity controlled by a controlling shareholder of the company, or any director who provides services to the company, to a controlling shareholder of the company or to any other entity controlled by a controlling shareholder of the company on a regular basis (other than as a member of the board of directors), or any other director whose main source of income derives from a controlling shareholder of the company.
|
|
•
|
he or she meets the qualifications for being appointed as an external director, except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications; and
|
|
•
|
he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in the service shall not be deemed to interrupt the continuation of the service.
|
|
•
|
oversight of the company’s independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of the company’s independent registered public accounting firm to the board of directors in accordance with Israeli law;
|
|
•
|
recommending the engagement or termination of the office of the company’s internal auditor; and
|
|
•
|
recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by the board of directors.
|
|
•
|
a person (or a relative of a person) who holds more than 5% of the company’s shares;
|
|
•
|
a person (or a relative of a person) who has the power to appoint a director or the general manager of the company;
|
|
•
|
an executive officer or director of the company; or
|
|
•
|
a member of the company’s independent accounting firm.
|
|
•
|
information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and
|
|
•
|
all other important information pertaining to these actions.
|
|
•
|
refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;
|
|
•
|
refrain from any activity that is competitive with the business of the company;
|
|
•
|
refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself or others; and
|
|
•
|
disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.
|
|
•
|
a transaction other than in the ordinary course of business;
|
|
•
|
a transaction that is not on market terms; or
|
|
•
|
a transaction that may have a material impact on the company’s profitability, assets or liabilities.
|
|
•
|
at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or
|
|
•
|
the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.
|
|
•
|
an amendment to the articles of association;
|
|
•
|
an increase in the company’s authorized share capital;
|
|
•
|
a merger; and
|
|
•
|
the approval of related party transactions and acts of office holders that require shareholder approval.
|
|
•
|
financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria;
|
|
•
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and
|
|
•
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent.
|
|
•
|
a breach of duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
|
•
|
a breach of duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; and
|
|
•
|
a financial liability imposed on the office holder in favor of a third party.
|
|
•
|
a breach of duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
|
•
|
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
|
•
|
an act or omission committed with intent to derive illegal personal benefit; or
|
|
•
|
a fine or forfeit levied against the office holder.
|
|
•
|
Distribution of annual and quarterly reports to shareholders
. Under Israeli law we are not required to distribute annual and quarterly reports directly to shareholders and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports publicly available through the website of the Israeli Securities Authority. In addition, we make our audited financial statements available to our shareholders at our offices and mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules.
|
|
•
|
Quorum
. While the Marketplace Rules of the Nasdaq Stock Market require that the quorum for purposes of any meeting of the holders of a listed company’s common voting stock, as specified in the company’s bylaws, be no less than 33 1/3% of the company’s outstanding common voting stock, under Israeli law, a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required for a quorum at a shareholders meeting. Our Articles of Association provide that a quorum of two or more shareholders holding at least 25% of the voting rights in person or by proxy is required for commencement of business at a general meeting. However, the quorum set forth in our articles of association with respect to an adjourned meeting consists of any number of shareholders present in person or by proxy.
|
|
•
|
Independent Directors
. Our Board of Directors includes two external directors in accordance with the provisions contained in Sections 239-249 of the Israeli Companies Law and Rule 10A-3 of the general rules and regulations promulgated under the Securities Act of 1933, rather than a majority of external directors. Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present. We are required, however, to ensure that all members of our Audit Committee are “independent” under the applicable Nasdaq and SEC criteria for independence (as a foreign private issuer we are not exempt from the SEC independence requirement), and we must also ensure that a majority of the members of our Audit Committee are unaffiliated directors as defined in the Israeli Companies Law. Furthermore, Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present, which the Marketplace Rules of the Nasdaq Stock Market otherwise require.
|
|
•
|
Audit Committee
. Our Audit Committee complies with all of the requirements under Israeli law, and is composed of two external directors, which are all of our external directors, and only one other director, who cannot be the chairman of the Board of Directors. Consistent with Israeli law, the independent auditors are elected at a meeting of shareholders instead of being appointed by the Audit Committee.
|
|
•
|
Nomination of our Directors
. With the exception of our external directors and directors elected by our Board of Directors due to vacancy, our directors are elected by a general or special meeting of our shareholders, to hold office until they are removed from office by the majority of our shareholders at a general or special meeting of our shareholders. See “— Board of Directors.” The nominations for directors, which are presented to our shareholders, are generally made by our directors, but nominations may be made by one or more of our shareholders as provided in our Articles of Association, under the Israeli Companies law or in an agreement between us and our shareholders. Currently, there is no agreement between us and any shareholder regarding the nomination of directors. In accordance with our Articles of Association, under the Israeli Companies Law, any one or more shareholders holding, in the aggregate, either (1) 5% of our outstanding shares and 1% of our outstanding voting power or (2) 5% of our outstanding voting power, may nominate one or more persons for election as directors at a general or special meeting by delivering a written notice of such shareholder’s intent to make such nomination or nominations to our registered office. Each such notice must set forth all of the details and information as required to be provided in our Articles of Association.
|
|
•
|
Compensation of Officers
. Provided that the executive officer does not serve on our board, Israeli law does not require and we do not require that independent members of our Board of Directors determine the compensation of an executive officer. If, however, an executive officer is also a director, the terms of compensation must be approved by our Audit Committee, our Board of Directors and shareholders. Furthermore, if the executive officer is also a controlling shareholder of our company (including an affiliate thereof), the compensation needs to be approved by our Audit Committee, Board of Directors and shareholders, provided that the shareholder approval includes the holders of a majority of the shares held by all shareholders who have no personal interest in the transaction and who are voting on the subject matter (with abstentions being disregarded) or, alternatively, the total shares of shareholders who have no personal interest in the transaction and who vote against the transaction must not represent more than 2% of the voting rights in our company. To the extent that any such transaction with a controlling shareholder is for a period extending beyond three years, approval is required once every three years, unless our Audit Committee determines that the duration of the transaction is reasonable given the circumstances related thereto. A director or executive officer of an Israeli company may not be present when the company’s audit committee or board of directors discusses or votes upon the terms of his or her compensation, unless the chairman of the audit committee or board of directors (as applicable) determines that he or she should be present to present the transaction that is subject to approval.
|
|
•
|
Approval of Related Party Transactions
. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transactions, set forth in sections 268 to 275 of the Israeli Companies Law, and the regulations promulgated thereunder, which require the approval of the audit committee, board of directors and shareholders, for specified transactions, rather than approval by the audit committee or other independent body of our Board of Directors as required under the Marketplace Rules of the Nasdaq Stock Market.
|
|
•
|
Shareholder Approval
. We seek shareholder approval for all corporate actions requiring such approval in accordance with the requirements of the Israeli Companies Law, which are different or in addition to the requirements for seeking shareholder approval under Nasdaq Listing Rule 5635, rather than seeking approval for corporation actions in accordance with such listing rules.
|
December 31,
|
|||||||
2009
|
2010
|
2011
|
|||||
Management and administration
|
12
|
12
|
12
|
||||
Research and development
|
33
|
34
|
37
|
||||
Sales and Marketing
|
2
|
3
|
3
|
Number of
|
||||||||
Shares
|
||||||||
Beneficially
|
Percent of
|
|||||||
Held
|
Class
|
|||||||
Directors
|
||||||||
Aharon Schwartz, Ph.D.
|
– | – | ||||||
Raphael Hofstein, Ph.D.
(1)
|
112,500 | * | ||||||
Yakov Friedman
|
– | – | ||||||
Michael J. Anghel
|
– | – | ||||||
Avraham Molcho, M.D.
(2)
|
25,000 | * | ||||||
Nurit Benjamini
(3)
|
25,000 | * | ||||||
Executive officers
|
||||||||
Kinneret Savitsky, Ph.D.
(4)
|
1,172,202 | * | ||||||
Moshe Phillip, M.D.
(5)
|
783,124 | * | ||||||
Philip Serlin
(6)
|
65,000 | * | ||||||
David Malek
(7)
|
– | * | ||||||
Leah Klapper
(8)
|
208,799 | * | ||||||
All directors and executive officers as a group (11 persons)
(9)
|
2,391,625 | 1.9 | % |
*
|
Less than 1.0%.
|
|
(1)
|
Includes 112,500 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 87,500 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(2)
|
Includes 25,000 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 25,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(3)
|
Includes 25,000 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 25,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(4)
|
Includes 256,170 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 500,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(5)
|
Includes 208,161 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 371,350 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(6)
|
Includes 65,000 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 489,200 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(7)
|
Does not include 250,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(8)
|
Includes 17,525 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 263,960 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(9)
|
Includes 780,190 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 2,296,566 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
·
|
each person or group of affiliated persons that, to our knowledge, beneficially owns more than 5.0% of our ordinary shares;
|
|
·
|
each of our directors and executive officers individually; and
|
|
·
|
all of our directors and executive officers as a group.
|
Shares Beneficially
Owned
|
||||||||
Number
|
Percent
|
|||||||
Directors
|
||||||||
Aharon Schwartz, Ph.D.
|
- | - | ||||||
Raphael Hofstein, Ph.D.
(1)
|
112,500 | * | ||||||
Yakov Friedman
|
- | - | ||||||
Michael J. Anghel
|
- | - | ||||||
Avraham Molcho, M.D.
(2)
|
29,167 | * | ||||||
Nurit Benjamini
(3)
|
29,167 | * | ||||||
Executive officers
|
||||||||
Kinneret Savitsky, Ph.D.
(4)
|
1,172,202 | * | ||||||
Moshe Phillip, M.D.
(5)
|
783,124 | * | ||||||
Philip Serlin
(6)
|
65,000 | * | ||||||
David Malek
(7)
|
- | * | ||||||
Leah Klapper
(8)
|
208,799 | * | ||||||
All directors and executive officers as a group (11 persons)
(9)
|
2,399,959 | 1.2 | ||||||
Principal shareholders:
|
||||||||
Pan Atlantic Bank and Trust Limited
(10)
|
37,421,793
|
20.4
|
||||||
Teva Pharmaceutical Industries Ltd.
(11)
|
11,889,535 | 5.9 | ||||||
Migdal Insurance and Financial Holdings Ltd
(12)
.
|
7,635,424 | 3.8 |
*
|
Less than 1.0%.
|
|
(1)
|
Includes 112,500 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 87,500 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 20, 2012.
|
(2)
|
Includes 29,167 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 20,233 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(3)
|
Includes 29,167 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 20,233 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(4)
|
Includes 256,170 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 500,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(5)
|
Includes 208,161 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 371,350 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(6)
|
Includes 65,000 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 489,200 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(7)
|
Does not include 250,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(8)
|
Includes 17,525 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 263,960 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(9)
|
Includes 717,690 ordinary shares issuable upon exercise of outstanding options within 60 days of February 22, 2012. Does not include 2,003,676 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of February 22, 2012.
|
|
(10)
|
Based upon information provided by the shareholder in its Schedule 13D filed with the SEC on February 27, 2012. Pan Atlantic Bank and Trust Limited is a wholly owned subsidiary of FCMI Financial Corporation (FCMI). All of the outstanding shares of FCMI are owned by Albert D. Friedberg, members of his family and trusts for the benefit of members of his family. Mr. Friedberg retains possession of the voting and dispositive power over the FCMI shares held by members of the Friedberg family and trusts for the benefit of members of his family and, as a result, controls and may be deemed the beneficial owner of 100% of the outstanding shares of and sole controlling person of FCMI. By virtue of his control of FCMI, Mr. Friedberg may be deemed to possess voting and dispositive power over the shares owned directly by its wholly-owned subsidiary, Pan Atlantic Bank and Trust Limited. The principal executive offices of Pan Atlantic are at “Whitepark House,” 1st Floor, Whitepark Road, St. Michael BB11135, Barbados, West Indies.
|
|
(11)
|
Based upon information provided by the shareholder in its Schedule 13G filed with the SEC on February 14, 2012. Teva is a publicly-traded Israeli company. Its principal executive offices are at 5 Basel Street, PO Box 3190, Petach Tikva, Israel 49131.
|
|
(12)
|
Based upon information provided by the shareholder in its Schedule 13G filed with the SEC on February 14, 2012. Migdal Insurance’s principal executive offices are at 4 Efal Street; P.O. Box 3063; Petach Tikva 49512, Israel.
|
Ordinary Shares Beneficially
|
Ordinary Shares
|
Ordinary Shares
|
||||||||||||||||||
Owned Before the Offering
|
Offered by Selling
|
After the Offering
|
||||||||||||||||||
Selling Shareholder
|
Number(1)
|
Percent(2)
|
Shareholders
|
Number
|
Percent(2)
|
|||||||||||||||
Ayer Capital Partners Kestrel Fund, LP(3)
|
320,750 | (4) | 0.16 | 320,750 | (4) | 0 | 0.0 | |||||||||||||
Ayer Capital Partners Master Fund, L.P.(5)
|
14,524,320 | (6) | 7.18 | 14,524,320 | (6) | 0 | 0.0 | |||||||||||||
Epworth – Ayer Capital(7)
|
889,200 | (8) | 0.44 | 889,200 | (8) | 0 | 0.0 | |||||||||||||
Kingsbrook Opportunities Master Fund LP(9)
|
2,250,000 | (10) | 1.11 | 2,250,000 | (10) | 0 | 0.0 | |||||||||||||
Lincoln Park Capital Fund, LLC(11)
|
2,622,380 | (12) | 1.3 | 2,622,380 | (12) | 0 | 0.0 | |||||||||||||
RRC Biofund, LP(13)
|
3,750,000 | (14) | 1.85 | 3,750,000 | (14) | 0 | 0.0 | |||||||||||||
DAFNA Lifescience LTD.(15)
|
432,000 | (16) | 0.21 | 432,000 | (16) | 0 | 0.0 | |||||||||||||
DAFNA Lifescience Market Neutral LTD(17)
|
354,000 | (18) | 0.18 | 354,000 | (18) | 0 | 0.0 | |||||||||||||
DAFNA Lifescience Select LTD(19)
|
525,200 | (20) | 0.26 | 525,200 | (20) | 0 | 0.0 | |||||||||||||
Empery Asset Master, LTD(21)
|
1,311,200 | (22) | 0.65 | 1,311,200 | (22) | 0 | 0.0 | |||||||||||||
Hartz Capital Investments, LLC(23)
|
1,311,200 | (24) | 0.65 | 1,311,200 | (24) | 0 | 0.0 | |||||||||||||
Senvest Master Fund, LP
|
5,244,750 | (25) | 2.59 | 5,244,750 | (25) | 0 | 0.0 | |||||||||||||
Senvest Israel Partners LP
|
5,244,750 | (26) | 2.59 | 5,244,750 | (26) | 0 | 0.0 | |||||||||||||
Cranshire Capital Master Fund, Ltd.(27)
|
1,720,280 | (28) | 0.85 | 1,720,280 | (28) | 0 | 0.0 | |||||||||||||
Freestone Advantage Partners II, LP(29)
|
115,380 | (30) | 0.06 | 115,380 | (30) | 0 | 0.0 | |||||||||||||
Iroquois Master Fund Ltd.(31)
|
1,500,000 | (32) | 0.74 | 1,500,000 | (32) | 0 | 0.0 | |||||||||||||
Pan Atlantic Bank and Trust Limited
|
37,421,793
|
(33) |
18.50
|
21,000,000 | (34) |
16,421,79
|
8.14 | |||||||||||||
Opus Point Healthcare Innovations Fund, LP(35)
|
655,610 | (36) | 0.32 | 655,610 | (36) | 0 | 0.0 | |||||||||||||
Opus Point Healthcare Low Net Fund, LP(37)
|
327,800 | (38) | 0.16 | 327,800 | (38) | 0 | 0.0 | |||||||||||||
Opus Point Healthcare Value Fund, LP(39)
|
327,800 | (40) | 0.16 | 327,800 | (40) | 0 | 0.0 | |||||||||||||
Capital Ventures International(41)
|
5,507,000 | (42) | 2.72 | 5,507,000 | (42) | 0 | 0.0 | |||||||||||||
Nextview Capital LP(43)
|
2,175,000 | (44) | 1.08 | 2,175,000 | (44) | 0 | 0.0 | |||||||||||||
Hudson Bay Master Fund Ltd.(45)
|
1,835660 | (46) | 0.91 | 1,835660 | (46) | 0 | 0.0 | |||||||||||||
Midsummer Small Cap Master, Ltd.(47)
|
2,097,900 | (48) | 1.04 | 2,097,900 | (48) | 0 | 0.0 | |||||||||||||
Prelude Israel Fund
|
524,480 | (49) | 0.26 | 524,480 | (49) | 0 | 0.0 | |||||||||||||
Rockmore Investment Master Fund Ltd.(50)
|
524,490 | (51) | 0.26 | 524,490 | (51) | 0 | 0.0 | |||||||||||||
Whalehaven Capital Fund Ltd.(52)
|
1,573,430 | (53) | 0.78 | 1,573,430 | (53) | 0 | 0.0 |
(1)
|
Number of ordinary shares includes ordinary shares, ordinary shares underlying ADSs, as well as ordinary shares underlying ADSs to be purchased by the exercise of the warrants.
|
(2)
|
Percentage ownership calculated based on the number of ordinary shares underlying the ADS, and on 123,613,141 ordinary shares of our common stock issued and outstanding as of February 22, 2012. The percentage ownership assumes that all ADSs issued to the investors in the private placement that closed on February 22, 2012 will be sold and that all warrants issued to the investors in such private placement have been exercised and the resulting ADSs will be sold.
|
(3)
|
Ayer Capital Management, LP, ACM Capital Partners, LLC, Jay Venkatesan, Ayer Capital Partners Master Fund, L.P. and Ayer Capital Partners, LLC may be considered the beneficial owner of any securities deemed to be beneficially owned by Ayer Capital Partners Kestrel Fund, L.P.
|
(4)
|
Includes 21,383 ADSs and warrants to purchase 10,692 ADSs purchased by Ayer Capital Partners Kestrel Fund, LP in the private placement that closed on February 22, 2012.
|
(5)
|
Ayer Capital Management, LP, ACM Capital Partners, LLC, Jay Venkatesan and Ayer Capital Partners, LLC may be considered the beneficial owner of any securities deemed to be beneficially owned by Ayer Capital Partners Master Fund, L.P
|
(6)
|
Includes 968,288 ADSs and warrants to purchase 484,144 ADSs purchased by Ayer Capital Partners Master Fund, L.P. in the private placement that closed on February 22, 2012.
|
(7)
|
Ayer Capital Management, LP, ACM Capital Partners, LLC, Jay Venkatesan, Ayer Capital Partners Master Fund, L.P. and Ayer Capital Partners, LLC may be considered the beneficial owner of any securities deemed to be beneficially owned by Epworth -- Ayer Capital.
|
(8)
|
Includes 59,280 ADSs and warrants to purchase 29,640 ADSs purchased by Epworth -- Ayer Capital in the private placement that closed on February 22, 2012.
|
(9)
|
Kingsbrook Partners LP (“Kingsbrook Partners”) is the investment manager of Kingsbrook Opportunities Master Fund LP (“Kingsbrook Opportunities”) and consequently has voting control and investment discretion over securities held by Kingsbrook Opportunities. Kingsbrook Opportunities GP LLC (“Opportunities GP”) is the general partner of Kingsbrook Opportunities and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Opportunities. KB GP LLC (“GP LLC”) is the general partner of Kingsbrook Partners and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Partners. Ari J. Storch, Adam J. Chill and Scott M. Wallace are the sole managing members of Opportunities GP and GP LLC and as a result may be considered beneficial owners of any securities deemed beneficially owned by Opportunities GP and GP LLC. Each of Kingsbrook Partners, Opportunities GP, GP LLC and Messrs. Storch, Chill and Wallace disclaim beneficial ownership of these securities.
|
(10)
|
Includes 150,000 ADSs and warrants to purchase 75,000 ADSs purchased by Kingsbrook Partners in the private placement that closed on February 22, 2012.
|
(11)
|
Josh Scheinfeld and Jonathan Cope, the principals of Lincoln Park Capital Fund, LLC (Lincoln Park Capital”), are deemed to be beneficial owners of all of the securities owned by Lincoln Park Capital. Messrs. Scheinfeld and Cope have shared voting and disposition power over the securities.
|
(12)
|
Includes 174,825 ADSs and warrants to purchase 87,413 ADSs purchased by Lincoln Park Capital in the private placement that closed on February 22, 2012.
|
(13)
|
As manager of RRC Management, LLC, the sole general partner of RRC BioFund, LP (“RRC Biofund”), James A. Silverman has the sole authority to vote and dispose of all of the shares held by RRC BioFund.
|
(14)
|
Includes 250,000 ADSs and warrants to purchase 125,000 ADSs purchased by RRC Biofund in the private placement that closed on February 22, 2012.
|
(15)
|
Nathan Fischel and Fariba Ghodsian share voting and investment power over these securities.
|
(16)
|
Includes 28,800 ADSs and warrants to purchase 14,400 ADSs purchased by DAFNA Lifescience LTD in the private placement that closed on February 22, 2012.
|
(17)
|
Nathan Fischel and Fariba Ghodsian share voting and investment power over these securities.
|
(18)
|
Includes 23,600 ADSs and warrants to purchase 11,800 ADSs purchased by DAFNA Lifescience Market Neutral LTD in the private placement that closed on February 22, 2012.
|
(19)
|
Nathan Fischel and Fariba Ghodsian share voting and investment power over these securities.
|
(20)
|
Includes 35,013 ADSs and warrants to purchase 17,507 ADSs purchased by DAFNA Lifescience Select LTD in the private placement that closed on February 22, 2012.
|
(21)
|
Empery Asset Management LP, the authorized agent of Empery Asset Master Ltd (“EAM”), has discretionary authority to vote and dispose of the shares held by EAM and may be deemed to be the beneficial owner of these shares. Martin Hoe and Ryan Lane, in their capacity as investment managers of Empery Asset Management LP, may also be deemed to have investment discretion and voting power over the shares held by EAM. Mr. Hoe and Mr. Lane disclaim any beneficial ownership of these shares.
|
(22)
|
Includes 87,413 ADSs and warrants to purchase 43,707 ADSs purchased by EAM in the private placement that closed on February 22, 2012.
|
(23)
|
Empery Asset Management LP, the authorized agent of Hartz Capital Investments, LLC (“HCI”), has discretionary authority to vote and dispose of the shares held by HCI and may be deemed to be the beneficial owner of these shares. Martin Hoe and Ryan Lane, in their capacity as investment managers of Empery Asset Management LP, may also be deemed to have investment discretion and voting power over the shares held by HCI. Mr. Hoe and Mr. Lane disclaim any beneficial ownership of these shares.
|
(24)
|
Includes 87,413 ADSs and warrants to purchase 43,707 ADSs purchased by HCI in the private placement that closed on February 22, 2012.
|
(25)
|
Includes 349,650 ADSs and warrants to purchase 174,825 ADSs purchased by Senvest Master Fund, LP in the private placement that closed on February 22, 2012.
|
(26)
|
Includes 349,650 ADSs and warrants to purchase 174,825 ADSs purchased by Senvest Israel Partners LP in the private placement that closed on February 22, 2012.
|
(27)
|
Cranshire Capital Advisors, LLC (“CCA”) is the investment manager of Cranshire Capital Master Fund, Ltd. (“Cranshire Master Fund”) and has voting control and investment discretion over securities held by Cranshire Master Fund. Mitchell P. Kopin (“Mr. Kopin”), the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Cranshire Master Fund.
CCA is also the investment manager for a managed account for Freestone Advantage Partners II, LP (“Freestone II”), and CCA has voting control and investment discretion over securities held Freestone II. Mr. Kopin, the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA also may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of an additional 115,380 ordinary shares of the issuer, consisting of (iv) 7,692 ADSs of the issuer that are held by Freestone II and (v) 3,846 ADSs of the issuer that are issuable upon exercise of warrants held by Freestone II.
|
(28)
|
Includes 114,685 ADSs and warrants to purchase 57,343 ADSs purchased by Cranshire Master Fund in the private placement that closed on February 22, 2012.
|
(29)
|
CCA is the investment manager of a managed account for Freestone II and has voting control and investment discretion over securities held in by Freestone II in such managed account. Mr. Kopin, the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Freestone II in such managed account.
CCA is also the investment manager Cranshire Master Fund and CCA has voting control and investment discretion over securities held by Cranshire Master Fund. Mr. Kopin, the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Cranshire Master Fund that are described in footnote 27.
|
(30)
|
Includes 7,692 ADSs and warrants to purchase 3,846 ADSs purchased by Freestone in the private placement that closed on February 22, 2012.
|
(31)
|
Iroquois Capital Management L.L.C (“Iroquois Capital”) is the investment manager for Iroquois Master Fund, Ltd. (“IMF”). Consequently, Iroquois Capital has voting control and investment discretion over securities held by IMF. As managing members of Iroquois Capital, Joshua Silverman and Richard Abbe make voting and investment decisions on behalf of Iroquois Capital in its capacity as investment manager to IMF. As a result of the foregoing, Mr. Silverman and Mr. Abbe may be deemed to have beneficial ownership of the securities held by IMF. Notwithstanding the foregoing, Mr. Silverman and Mr. Abbe disclaim such beneficial ownership.
|
(32)
|
Includes 100,000 ADSs and warrants to purchase 50,000 ADSs purchased by IMF in the private placement that closed on February 22, 2012.
|
(33)
|
Includes 16,421,793 Ordinary Shares owned by Pan Atlantic Bank and Trust Limited (“Pan Atlantic”) as of February 22, 2012, along with 1,400,000 ADSs and warrants to purchase 700,000 ADSs purchased by Pan Atlantic in the private placement that closed on February 22, 2012.
|
(34)
|
Includes 1,400,000 ADSs and warrants to purchase 700,000 ADSs purchased by Pan Atlantic in the private placement that closed on February 22, 2012.
|
(35)
|
Michael S. Weiss exercises sole voting and dispositive power over the securities held by Opus Point Healthcare Innovations Fund, LP.
|
(36)
|
Includes 43,707 ADSs and warrants to purchase 21,854 ADSs purchased by Opus Point Healthcare Innovations Fund, LP. in the private placement that closed on February 22, 2012.
|
(37)
|
Michael S. Weiss exercises sole voting and dispositive power over the securities held by Opus Point Healthcare Low Net Fund, LP.
|
(38)
|
Includes 21,853 ADSs and warrants to purchase 10,927 ADSs purchased by Opus Point Healthcare Low Net Fund, LP. in the private placement that closed on February 22, 2012.+
|
(39)
|
Michael S. Weiss exercises sole voting and dispositive power over the securities held by Opus Point Healthcare Value Fund, LP.
|
(40)
|
Includes 21,853 ADSs and warrants to purchase 10,927 ADSs purchased by Opus Point Healthcare Value Fund, LP. in the private placement that closed on February 22, 2012.
|
(41)
|
Heights Capital Management, Inc., the authorized agent of Capital Ventures International (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any beneficial ownership of the shares.
|
(42)
|
Includes 367,133 ADSs and warrants to purchase 183,567 ADSs purchased by CVI in the private placement that closed on February 22, 2012.
|
(43)
|
Stewart Flink is the portfolio manager of Nextview Capital, LP (“Nextview”) and has the sole voting and dispositive power over the securities held for the account of Nextview.
|
(44)
|
Includes 145,000 ADSs and warrants to purchase 72,500 ADSs purchased by Nextview in the private placement that closed on February 22, 2012.
|
(45)
|
Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd. (“Hudson Bay”), has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Sander Gerber disclaims beneficial ownership over these securities.
|
(46)
|
Includes 122,377 ADSs and warrants to purchase 61,189 ADSs purchased by Hudson Bay in the private placement that closed on February 22, 2012.
|
(47)
|
Each of Michel Amsalem and Joshua Thomas, as a Managing Member of Midsummer Small Cap Master, Ltd. (“Midsummer”), has sole voting and dispositive power of the shares beneficially owned by Midsummer.
|
(48)
|
Includes 139,860 ADSs and warrants to purchase 69,930 ADSs purchased by Midsummer in the private placement that closed on February 22, 2012.
|
(49)
|
Includes 34,695 ADSs and warrants to purchase 17,483 ADSs purchased by Prelude Israel Fund in the private placement that closed on February 22, 2012.
|
(50)
|
Rockmore Capital, LLC (“Rockmore Capital”) serves as the investment manager to Rockmore Investment Master Fund Ltd (“Rockmore Master Fund”) and in such capacity has investment discretion to vote and dispose of these shares. Mr. Bruce T. Bernstein and Mr. Brian Daly, as officers of Rockmore Capital, are responsible for the portfolio management decisions of Rockmore Master Fund and may be deemed to have investment discretion over these shares. Each of Rockmore Capital, Messrs. Bernstein and Daly, disclaims beneficial ownership of these shares.
|
(51)
|
Includes 34,966 ADSs and warrants to purchase 17,483 ADSs purchased by Rockmore Master Fund in the private placement that closed on February 22, 2012.
|
(52)
|
Michael Finklestein has the voting and dispositive power over the securities held for the account of Whalehaven Capital Fund Ltd (“Whalehaven”).
|
(53)
|
Includes 104,895ADSs and warrants to purchase 52,448 ADSs purchased by Whalehaven in the private placement that closed on February 22, 2012.
|
|
·
|
amendments to our Articles of Association;
|
|
·
|
appointment or termination of our auditors;
|
|
·
|
appointment of directors and appointment and dismissal of external directors;
|
|
·
|
approval of acts and transactions requiring general meeting approval pursuant to the Israeli Companies Law;
|
|
·
|
director compensation, indemnification and change of the principal executive officer;
|
|
·
|
increases or reductions of our authorized share capital;
|
|
·
|
a merger; and
|
|
·
|
the exercise of our Board of Director’s powers by a general meeting, if our Board of Directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
|
|
·
|
an appointment or removal of directors;
|
|
·
|
an approval of transactions with office holders or interested or related parties;
|
|
·
|
an approval of a merger or any other matter in respect of which there is a provision in the articles of association providing that decisions of the general meeting may also be passed by written ballot;
|
|
·
|
authorizing the chairman of the board of directors or his relative to act as the company’s chief executive officer or act with such authority; or authorize the company’s chief executive officer or his relative to act as the chairman of the board of directors or act with such authority; and
|
|
·
|
other matters which may be prescribed by Israel’s Minister of Justice.
|
|
•
|
make the rights available to all or certain holders of ADSs, by means of warrants or otherwise, if lawful and practically feasible; or
|
|
•
|
if it is not lawful or practically feasible to make the rights available, attempt to sell those rights or warrants or other instruments.
|
|
•
|
collect dividends and other distributions pertaining to deposited securities;
|
|
•
|
sell rights as described under the heading “Dividends, other distributions and rights — Rights to subscribe for additional shares and other rights” above; and
|
|
•
|
deliver deposited securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for surrendered ADSs.
|
(1)
|
taxes and other governmental charges;
|
|
(2)
|
any applicable transfer or registration fees;
|
|
(3)
|
certain cable, telex and facsimile transmission charges as provided in the Deposit Agreement;
|
|
(4)
|
any expenses incurred in the conversion of foreign currency;
|
|
(5)
|
a fee of $5.00 or less per 100 ADSs (or a portion thereof) for the execution and delivery of ADSs and the surrender of ADSs;
|
|
(6)
|
a fee of $.05 or less per ADS (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement;
|
|
(7)
|
a fee for the distribution of securities pursuant to the Deposit Agreement;
|
|
(8)
|
in addition to any fee charged under clause 6, a fee of $.05 or less per ADS (or portion thereof) per annum for depositary services, which will be payable as provided in clause 10 below;
|
|
(9)
|
a fee for the distribution of proceeds of rights that the Depositary sells pursuant to the Deposit Agreement; and
|
|
(10)
|
any other charges payable by the Depositary, any of the Depositary's agents, or the agents of the Depositary's agents in connection with the servicing of Shares or other Deposited Securities.
|
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing U.S. Investor’s holding period for the Shares;
|
|
•
|
the amount allocated to the current taxable year and any year prior to us becoming a PFIC would be taxed as ordinary income; and
|
|
•
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits investors;
|
|
·
|
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
|
·
|
to cover short sales made after the date that this registration statement is declared effective by SEC;
|
|
·
|
broker-dealers may agree with the selling shareholders to sell a specified number of such securities at a stipulated price per security;
|
|
·
|
a combination of any such methods of sale; and
|
|
·
|
any other method permitted pursuant to applicable law.
|
|
·
|
the judgments are obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel;
|
|
·
|
the prevailing law of the foreign state in which the judgments were rendered allows for the enforcement of judgments of Israeli courts;
|
|
·
|
adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence;
|
|
·
|
the judgments are not contrary to public policy of Israel, and the enforcement of the civil liabilities set forth in the judgment is not likely to impair the security or sovereignty of Israel;
|
|
·
|
the judgments were not obtained by fraud and do not conflict with any other valid judgments in the same matter between the same parties;
|
|
·
|
an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and
|
|
·
|
the judgment is enforceable according to the laws of Israel and according to the law of the foreign state in which the relief was granted.
|
Page
|
|
Unaudited Consolidated Financial Statements as of September 30, 2011
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-7
|
|
F-10
|
|
Audited Consolidated Financial Statements at December 31, 2010 and 2009 and for each of the three years in the period ended December 31, 2010
|
|
F-11
|
|
F-12
|
|
F-13
|
|
F-14
|
|
F-16
|
Convenience translation into USD
(Note 1b)
|
||||||||||||
December 31,
|
September 30,
|
September 30,
|
||||||||||
2010
|
2011
|
2011
|
||||||||||
NIS in thousands
|
In thousands
|
|||||||||||
Assets
|
||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
111,746 | 33,895 | 9,131 | |||||||||
Short-term bank deposits
|
28,037 | 78,564 | 21,165 | |||||||||
Prepaid expenses
|
46 | 317 | 85 | |||||||||
Other receivables
|
6,313 | 2,113 | 569 | |||||||||
Total current assets
|
146,142 | 114,889 | 30,950 | |||||||||
NON-CURRENT ASSETS
|
||||||||||||
Restricted deposits
|
2,414 | 3,401 | 916 | |||||||||
Long-term prepaid expenses
|
196 | 195 | 53 | |||||||||
Property and equipment, net
|
4,509 | 4,076 | 1,098 | |||||||||
Intangible assets, net
|
1,352 | 1,178 | 317 | |||||||||
Total non-current assets
|
8,471 | 8,850 | 2,384 | |||||||||
Total assets
|
154,613 | 123,739 | 33,334 | |||||||||
Liabilities and equity
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Current maturities of long-term bank loan
|
307 | 307 | 83 | |||||||||
Accounts payable and accruals:
|
||||||||||||
Trade
|
3,849 | 5,551 | 1,495 | |||||||||
OCS
|
5,993 | 5,993 | 1,614 | |||||||||
Licensors
|
1,491 | - | - | |||||||||
Other
|
10,551 | 12,948 | 3,488 | |||||||||
Total current liabilities
|
22,191 | 24,799 | 6,680 | |||||||||
LONG-TERM LIABILITIES
|
||||||||||||
Long-term bank loan, net of current maturities
|
432 | 191 | 51 | |||||||||
Retirement benefit obligations
|
30 | 30 | 8 | |||||||||
Total non-current liabilities
|
462 | 221 | 59 | |||||||||
Total liabilities
|
22,653 | 25,020 | 6,739 | |||||||||
EQUITY
|
||||||||||||
Ordinary shares
|
1,236 | 1,236 | 333 | |||||||||
Warrants
|
6,549 | 6,549 | 1,764 | |||||||||
Share premium
|
414,435 | 414,780 | 111,740 | |||||||||
Capital reserve
|
27,623 | 30,023 | 8,088 | |||||||||
Accumulated deficit
|
(317,883 | ) | (353,869 | ) | (95,330 | ) | ||||||
Total equity
|
131,960 | 98,719 | 26,595 | |||||||||
Total liabilities and equity
|
154,613 | 123,739 | 33,334 |
Convenience translation
into USD
(Note 1b)
|
||||||||||||||||||||||||
Three months
|
Nine months
|
|||||||||||||||||||||||
Three months ended
September
30,
|
Nine months ended
September
30,
|
ended
September
30,
|
ended
September
30,
|
|||||||||||||||||||||
2010
|
2011
|
2010
|
2011
|
2011
|
2011
|
|||||||||||||||||||
NIS in thousands
|
In thousands
|
|||||||||||||||||||||||
NET SALES
|
113,160 | - | 113,160 | - | - | - | ||||||||||||||||||
COST OF SALES
|
(25,571 | ) | - | (25,571 | ) | - | - | - | ||||||||||||||||
GROSS PROFIT
|
87,589 | - | 87,589 | - | - | - | ||||||||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
(6,737 | ) | (13,255 | ) | (43,769 | ) | (30,044 | ) | (3,571 | ) | (8,094 | ) | ||||||||||||
SALES AND MARKETING EXPENSES
|
(1,322 | ) | (358 | ) | (3,506 | ) | (2,431 | ) | (96 | ) | (655 | ) | ||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
(2,690 | ) | (3,272 | ) | (8,914 | ) | (9,546 | ) | (881 | ) | (2,572 | ) | ||||||||||||
OPERATING PROFIT (LOSS)
|
76,840 | (16,885 | ) | 31,400 | (42,021 | ) | (4,548 | ) | (11,321 | ) | ||||||||||||||
FINANCIAL INCOME
|
178 | 8,965 | 3,056 | 10,785 | 2,415 | 2,906 | ||||||||||||||||||
FINANCIAL EXPENSES
|
(3,869 | ) | (18 | ) | (4,931 | ) | (4,750 | ) | (5 | ) | (1,279 | ) | ||||||||||||
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD
|
73,149 | (7,938 | ) | 29,525 | (35,986 | ) | (2,138 | ) | (9,694 | ) | ||||||||||||||
NIS
|
USD
|
|||||||||||||||||||||||
EARNINGS (LOSS) PER ORDINARY SHARE - BASIC
|
0.59 | (0.06 | ) | 0.24 | (0.29 | ) | (0.02 | ) | (0.08 | ) | ||||||||||||||
EARNINGS PER ORDINARY SHARE - DILUTED
|
0.59 | - | 0.24 | - | - | - |
Convenience translation
into USD
(Note 1b)
|
||||||||||||
Nine months ended September 30,
|
Nine months ended
September 30,
|
|||||||||||
2010
|
2011
|
2011
|
||||||||||
NIS in thousands
|
In thousands
|
|||||||||||
CASH FLOWS - OPERATING ACTIVITIES
|
||||||||||||
Net income (loss) for the period
|
29,525 | (35,986 | ) | (9,694 | ) | |||||||
Adjustments required to reflect net cash provided by (used in) operating activities (see appendix below)
|
19,283 | 9,092 | 2,449 | |||||||||
Net cash provided by (used in) operating activities
|
48,808 | (26,894 | ) | (7,245 | ) | |||||||
CASH FLOWS - INVESTING ACTIVITIES
|
||||||||||||
Investment in short-term deposits
|
- | (76,351 | ) | (20,569 | ) | |||||||
Investment in restricted deposits
|
(206 | ) | (1,000 | ) | (269 | ) | ||||||
Maturities of short-term deposits
|
27,463 | 7,398 | ||||||||||
Maturities of restricted deposits
|
1,353 | |||||||||||
Purchase of property and equipment
|
(1,310 | ) | (716 | ) | (193 | ) | ||||||
Purchase of intangible assets
|
(95 | ) | (131 | ) | (35 | ) | ||||||
Net cash used in investing activities
|
(258 | ) | (50,735 | ) | (13,668 | ) | ||||||
CASH FLOWS - FINANCING ACTIVITIES
|
||||||||||||
Proceeds from bank loan
|
1,020 | - | - | |||||||||
Repayments of bank loan
|
(202 | ) | (230 | ) | (62 | ) | ||||||
Proceeds from exercise of employee stock options
|
- | 1 | - | |||||||||
Net cash provided by (used in) financing activities
|
818 | (229 | ) | (62 | ) | |||||||
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
|
49,368 | (77,858 | ) | (20,975 | ) | |||||||
CASH AND CASH EQUIVALENTS – BEGINNING
OF PERIOD
|
105,890 | 111,746 | 30,104 | |||||||||
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS
|
(2,925 | ) | 7 | 2 | ||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
152,333 | 33,895 | 9,131 |
Convenience translation
into USD
(Note 1b)
|
||||||||||||
Nine months ended September 30,
|
Nine months ended
September 30,
|
|||||||||||
2010
|
2011
|
2011
|
||||||||||
NIS in thousands
|
In thousands
|
|||||||||||
Adjustments required to reflect net cash used in operating activities:
|
||||||||||||
Income and expenses not involving cash flows:
|
||||||||||||
Depreciation and amortization
|
1,371 | 1,170 | 315 | |||||||||
Impairment of intangible assets
|
1,550 | 80 | 22 | |||||||||
Long-term prepaid expenses
|
(24 | ) | 1 | * | ||||||||
Exchange differences on cash and cash equivalents
|
2,925 | (7 | ) | (2 | ) | |||||||
Share-based compensation
|
4,870 | 2,744 | 739 | |||||||||
Interest and exchange differences on short-term deposits
|
- | (1,639 | ) | (442 | ) | |||||||
Interest and linkage on bank loan
|
- | (11 | ) | (3 | ) | |||||||
Interest and exchange differences on restricted deposits
|
151 | 13 | 4 | |||||||||
10,843 | 2,351 | 633 | ||||||||||
Changes in operating asset and liability items:
|
||||||||||||
Decrease in trade accounts receivable and
other receivables
|
28,903 | 3,929 | 1,058 | |||||||||
Increase (decrease) in accounts payable and accruals
|
(20,463 | ) | 2,812 | 758 | ||||||||
8,440 | 6,741 | 1,816 | ||||||||||
19,283 | 9,092 | 2,449 | ||||||||||
Supplementary information on interest received in cash
|
593 | 1,334 | 359 |
a.
|
General
|
b.
|
Convenience translation into U.S. dollars (“dollars”, “USD” or “$”)
|
c.
|
The condensed consolidated interim financial statements of the Company for the three months and nine months ended September 30, 2011 were approved by the Board of Directors of the Company on November 24, 2011, and signed on its behalf by the Chairman of the Board, by the Company's CEO, and the Company's CFO.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2010
|
2011
|
2010
|
2011
|
|||||||||||||
NIS in thousands
|
NIS in thousands
|
|||||||||||||||
|
||||||||||||||||
Grants received from related party, offset against research and development expenses
|
513 | 1,014 | 2,149 | 2,522 |
Tel Aviv, Israel
|
Kesselman & Kesselman
|
|
March 27, 2011
|
Certified Public Accountants (Isr.)
|
|
Member of PricewaterhouseCoopers
|
||
International Ltd.
|
Note
|
December 31,
|
Convenience
translation into
USD
(Note 1b)
|
||||||||||||||
2009
|
2010
|
December 31,
2010
|
||||||||||||||
NIS in thousands
|
In thousands
|
|||||||||||||||
Assets
|
||||||||||||||||
CURRENT ASSETS
|
||||||||||||||||
Cash and cash equivalents
|
2i, 5a | 105,890 | 111,746 | 32,102 | ||||||||||||
Short-term bank deposits
|
5b | – | 28,037 | 8,054 | ||||||||||||
Prepaid expenses
|
1,094 | 46 | 13 | |||||||||||||
Trade accounts receivable
|
2k, 15 | 37,750 | – | – | ||||||||||||
Other receivables
|
14a | 2,313 | 6,313 | 1,814 | ||||||||||||
Total current assets
|
147,047 | 146,142 | 41,983 | |||||||||||||
NON-CURRENT ASSETS
|
||||||||||||||||
Restricted deposits
|
2j, 12b(1) | 3,704 | 2,414 | 693 | ||||||||||||
Long-term prepaid expenses
|
14b | 1,150 | 196 | 56 | ||||||||||||
Property and equipment, net
|
6 | 4,175 | 4,509 | 1,295 | ||||||||||||
Intangible assets, net
|
7 | 3,042 | 1,352 | 388 | ||||||||||||
Asset in respect of retirement benefit obligations
|
2s | 49 | – | – | ||||||||||||
Total non-current assets
|
12,120 | 8,471 | 2,432 | |||||||||||||
Total assets
|
159,167 | 154,613 | 44,415 | |||||||||||||
Liabilities and equity
|
||||||||||||||||
CURRENT LIABILITIES
|
3a | |||||||||||||||
Current maturities of long-term bank loan
|
8 | – | 307 | 88 | ||||||||||||
Accounts payable and accruals:
|
||||||||||||||||
Trade
|
14c(1) | 6,452 | 3,849 | 1,106 | ||||||||||||
OCS
|
14,005 | 5,993 | 1,722 | |||||||||||||
Licensors
|
10,570 | 1,491 | 428 | |||||||||||||
Other
|
14c(2) | 10,203 | 10,551 | 3,031 | ||||||||||||
Total current liabilities
|
41,230 | 22,191 | 6,375 | |||||||||||||
NON-CURRENT LIABILITIES
|
||||||||||||||||
Long term bank loan, net of current maturities
|
8 | 432 | 124 | |||||||||||||
Retirement benefit obligations
|
2s(1) | – | 30 | 8 | ||||||||||||
Total non-current liabilities
|
– | 462 | 132 | |||||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES
|
12 | |||||||||||||||
Total liabilities
|
41,230 | 22,653 | 6,507 | |||||||||||||
EQUITY
|
9 | |||||||||||||||
Ordinary shares
|
1,235 | 1,236 | 355 | |||||||||||||
Share premium
|
412,513 | 414,435 | 119,056 | |||||||||||||
Warrants
|
6,549 | 6,549 | 1,881 | |||||||||||||
Capital reserve
|
22,963 | 27,623 | 7,935 | |||||||||||||
Accumulated deficit
|
(325,323 | ) | (317,883 | ) | (91,319 | ) | ||||||||||
Total equity
|
117,937 | 131,960 | 37,908 | |||||||||||||
Total liabilities and equity
|
159,167 | 154,613 | 44,415 |
Note
|
Year ended December 31,
|
Convenience translation into USD
(Note 1b)
|
||||||||||||||||||
2008
|
2009
|
2010
|
2010
|
|||||||||||||||||
NIS in thousands
|
In thousands
|
|||||||||||||||||||
REVENUES
|
15, 16 | – | 63,909 | 113,160 | 32,508 | |||||||||||||||
COST OF REVENUES
|
14d | – | (22,622 | ) | (25,571 | ) | (7,346 | ) | ||||||||||||
GROSS PROFIT
|
– | 41,287 | 87,589 | 25,162 | ||||||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
14e | (106,156 | ) | (90,302 | ) | (54,966 | ) | (15,790 | ) | |||||||||||
SALES AND MARKETING EXPENSES
|
14f | – | (3,085 | ) | (4,609 | ) | (1,324 | ) | ||||||||||||
GENERAL AND ADMINISTRATIVE
EXPENSES
|
14g | (13,083 | ) | (11,182 | ) | (14,875 | ) | (4,273 | ) | |||||||||||
GAIN ON ADJUSTMENT OF WARRANTS TO FAIR VALUE
|
2l | 3,658 | – | – | – | |||||||||||||||
OPERATING INCOME (LOSS)
|
(115,581 | ) | (63,282 | ) | 13,139 | 3,775 | ||||||||||||||
FINANCIAL INCOME
|
14h | 13,001 | 3,928 | 3,056 | 877 | |||||||||||||||
FINANCIAL EXPENSES
|
14i | (12,269 | ) | (2,164 | ) | (8,755 | ) | (2,515 | ) | |||||||||||
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE YEAR
|
(114,849 | ) | (61,518 | ) | 7,440 | 2,137 | ||||||||||||||
NIS
|
USD
|
|||||||||||||||||||
EARNINGS (LOSS) PER ORDINARY SHARE – BASIC
|
11 | (1.44 | ) | (0.63 | ) | 0.06 | 0.02 | |||||||||||||
EARNINGS PER ORDINARY SHARE – DILUTED
|
11 | – | – | 0.06 | 0.02 |
Year ended December 31,
|
Convenience translation into USD
(Note 1b)
|
|||||||||||||||
2008
|
2009
|
2010
|
2010
|
|||||||||||||
NIS in thousands
|
In thousands
|
|||||||||||||||
CASH FLOWS – OPERATING ACTIVITIES
|
||||||||||||||||
Net income (loss) for the year
|
(114,849 | ) | (61,518 | ) | 7,440 | 2,137 | ||||||||||
Adjustments required to reflect net cash used in operating activities (see appendix below)
|
21,080 | (22,978 | ) | 33,231 | 9,546 | |||||||||||
Net cash provided by (used in) operating activities
|
(93,769 | ) | (84,496 | ) | 40,671 | 11,683 | ||||||||||
CASH FLOWS – INVESTING ACTIVITIES
|
||||||||||||||||
Proceeds from sale of financial assets at fair value through profit or loss
|
27,851 | 30,837 | – | – | ||||||||||||
Proceeds from sale of financial assets at fair value through profit or loss – restricted
|
– | 3,767 | – | – | ||||||||||||
Purchase of financial assets at fair value through profit or loss
|
(58,327 | ) | – | – | – | |||||||||||
Purchase of financial assets at fair value through profit or loss – restricted
|
(3,757 | ) | – | – | – | |||||||||||
Investment in short-term deposits
|
– | – | (28,333 | ) | (8,139 | ) | ||||||||||
Investment in restricted deposits
|
– | (3,147 | ) | (206 | ) | (59 | ) | |||||||||
Withdrawal of restricted deposits
|
5,977 | 251 | 1,353 | 389 | ||||||||||||
Purchase of property and equipment
|
(3,255 | ) | (235 | ) | (1,853 | ) | (532 | ) | ||||||||
Grants received in respect of property and equipment
|
28 | – | – | – | ||||||||||||
Proceeds from sale of property and equipment
|
– | 3 | – | – | ||||||||||||
Purchase of intangible assets
|
(1,790 | ) | (628 | ) | (492 | ) | (141 | ) | ||||||||
Net cash provided by (used in) investing activities
|
(33,273 | ) | 30,848 | (29,531 | ) | (8,482 | ) | |||||||||
CASH FLOWS – FINANCING ACTIVITIES
|
||||||||||||||||
Issuance of share capital and warrants, net of issuance expenses
|
– | 97,551 | – | – | ||||||||||||
Proceeds of bank loan
|
1,020 | 293 | ||||||||||||||
Repayments of bank loan
|
– | – | (281 | ) | – | |||||||||||
Proceeds from exercise of warrants
|
– | 3 | – | – | ||||||||||||
Proceeds from exercise of employee stock options
|
– | 116 | 26 | 7 | ||||||||||||
Net cash provided by financing activities
|
– | 97,670 | 765 | 219 | ||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(127,042 | ) | 44,022 | 11,905 | 3,420 | |||||||||||
CASH AND CASH EQUIVALENTS – BEGINNING OF YEAR
|
193,798 | 60,379 | 105,890 | 30,420 | ||||||||||||
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS
|
(6,377 | ) | 1,489 | (6,049 | ) | (1,738 | ) | |||||||||
CASH AND CASH EQUIVALENTS – END OF YEAR
|
60,379 | 105,890 | 111,746 | 32,102 |
Year ended December 31,
|
Convenience translation into USD
(Note 1b)
|
|||||||||||||||
2008
|
2009
|
2010
|
2010
|
|||||||||||||
NIS in thousands
|
In thousands
|
|||||||||||||||
APPENDIX
|
||||||||||||||||
Adjustments required to reflect net cash used in operating activities:
|
||||||||||||||||
Income and expenses not involving cash flows:
|
||||||||||||||||
Depreciation and amortization
|
1,676 | 1,754 | 1,814 | 521 | ||||||||||||
Impairment of intangible assets
|
603 | 584 | 1,846 | 530 | ||||||||||||
Retirement benefit obligations
|
– | (63 | ) | 79 | 23 | |||||||||||
Long-term prepaid expenses
|
(103 | ) | (880 | ) | 954 | 274 | ||||||||||
Gain on adjusting warrants to fair value
|
(3,658 | ) | – | – | – | |||||||||||
Loss on sale of property and equipment
|
– | 1 | – | – | ||||||||||||
Exchange differences on cash and cash equivalents
|
6,377 | (1,489 | ) | 6,049 | 1,738 | |||||||||||
Gain on fair value adjustments to financial assets at fair value through profit or loss
|
(273 | ) | (98 | ) | – | – | ||||||||||
Share-based compensation
|
9,035 | 3,399 | 6,557 | 1,884 | ||||||||||||
Interest and exchange differences on short-term deposits
|
296 | 85 | ||||||||||||||
Interest and exchange differences on restricted deposits
|
156 | (204 | ) | 143 | 41 | |||||||||||
13,813 | 3,004 | 17,738 | 5,096 | |||||||||||||
Changes in operating asset and liability items:
|
||||||||||||||||
Decrease (increase) in trade accounts receivable and other receivables
|
(9,812 | ) | (29,877 | ) | 34,798 | 9,996 | ||||||||||
Increase (decrease) in accounts payable and accruals
|
17,079 | 3,895 | (19,305 | ) | (5,546 | ) | ||||||||||
7,267 | (25,982 | ) | 15,493 | 4,450 | ||||||||||||
21,080 | (22,978 | ) | 33,231 | 9,546 | ||||||||||||
Supplementary information on investing and financing activities not involving cash flows:
|
||||||||||||||||
Credit received in connection with purchase of property and equipment
|
104 | 30 | ||||||||||||||
Credit received in connection with purchase of intangible assets
|
238 | 245 | 100 | 29 | ||||||||||||
Warrants reclassified from liabilities to equity
|
947 | – | – | – | ||||||||||||
Supplementary information on interest received in cash
|
3,901 | 443 | 1,013 | 291 |
|
a.
|
General
|
|
b.
|
Convenience translation into US dollars (“dollars” or “USD”)
|
|
c.
|
Approval of consolidated financial statements
|
|
a.
|
Basis of presentation
|
|
b.
|
Consolidation of the financial statements
|
|
c.
|
Functional and presentation currency
|
|
d.
|
Property and equipment
|
%
|
||||
Computers and communications equipment
|
20 – 33 | |||
Office furniture and equipment
|
6 – 15 | |||
Laboratory equipment
|
15 – 20 |
|
e.
|
Intangible assets
|
|
f.
|
Impairment of non-financial assets
|
|
g.
|
Government grants
|
|
h.
|
Financial assets
|
|
1)
|
Classification
|
|
a)
|
Financial assets at fair value through profit or loss
|
|
b)
|
Loans and receivables
|
|
2)
|
Recognition and measurement
|
|
3)
|
Offsetting financial instruments
|
|
i.
|
Cash equivalents
|
|
j.
|
Restricted deposits
|
|
k.
|
Trade receivables
|
|
l.
|
Warrants
|
|
m.
|
Share capital
|
|
n.
|
Trade payables
|
|
o.
|
Deferred taxes
|
|
p.
|
Revenue recognition
|
|
•
|
The Group has transferred to the buyer the significant risks and rewards of ownership of the patents and intellectual property.
|
|
•
|
The Group does not retain either the continuing managerial involvement to the degree usually associated with ownership or the effective control over the patent and intellectual property.
|
|
•
|
The amount of revenue can be measured reliably.
|
|
•
|
It is probable that the economic benefits associated with the transaction will flow to the Group.
|
|
•
|
The costs incurred or to be incurred in respect of the sale can be measured reliably.
|
|
q.
|
Research and development expenses
|
|
•
|
technical feasibility exists for completing development of the intangible asset so that it will be available for use or sale.
|
|
•
|
it is management’s intention to complete development of the intangible asset for use or sale.
|
|
•
|
the Company has the ability to use or sell the intangible asset.
|
|
•
|
it is probable that the intangible asset will generate future economic benefits, including existence of a market for the output of the intangible asset or the intangible asset itself or, if the intangible asset is to be used internally, the usefulness of the intangible asset.
|
|
•
|
adequate technical, financial and other resources are available to complete development of the intangible asset, as well as the use or sale thereof.
|
|
•
|
the Company has the ability to reliably measure the expenditure attributable to the intangible asset during its development.
|
|
r.
|
Government participation in research and development expenses
|
|
s.
|
Employee benefits
|
|
1)
|
Pension and severance pay obligations
|
|
2)
|
Vacation days and recreation pay
|
|
3)
|
Share-based payments
|
|
•
|
including any market performance conditions (for example, the Company’s share price);
|
|
•
|
excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and the employee remaining with the entity over a specified time period); and
|
|
•
|
excluding the impact of any non-vesting conditions.
|
|
t.
|
Earnings (loss) per share
|
|
1)
|
Basic
|
|
2)
|
Diluted
|
|
u.
|
Changes in accounting policy and disclosures
|
|
1)
|
New and amended standards adopted during 2010
|
|
a)
|
IAS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognized in profit or loss. The Group did not carry out any transactions with non-controlling interests during 2010 and, accordingly, the initial adoption of IAS 27 (revised) did not have any impact on the Group’s financial statements.
|
|
b)
|
IFRS 3 (revised), “Business Combinations” is effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. The revised standard continues to apply the acquisition method to business combinations but with some significant changes compared with IFRS 3. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs are expensed. The Group elected to adopt IFRS 3 (revised) on a prospective basis for all business combinations, effective January 1, 2010. The initial adoption of IFRS 3 (revised) did not have an effect on the Group’s financial statements.
|
|
c)
|
IAS 1 (amendment), “Presentation of Financial Statements,” clarifies that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of current liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could be required by the counterparty to settle in shares at any time. The Group adopted IAS 1 (amendment) effective January 1, 2010. The initial adoption of IAS 1 (amendment) did not have an effect on the Group’s financial statements.
|
|
d)
|
IFRS 7 “Financial Instruments — Disclosures” (amendment), requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements in accordance with a fair value measurement hierarchy. The amendment did not have a material impact on the Group’s financial statements for the periods reported herein.
|
|
e)
|
IAS 38 (amendment), “Intangible Assets,” is part of the IASB’s annual improvements project published in May 2008. The amendment provides that a prepayment may only be recognized in the event that payment has been made in advance of obtaining the right of access to goods or receipt of services.
|
|
2)
|
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group, and which are not expected to have a material impact on the Group’s financial statements
|
|
a.
|
Market risks
|
|
1)
|
Concentration of currency risks
|
December 31, 2010
|
||||||||||||||||||||
Income (loss)
|
Income (loss)
|
|||||||||||||||||||
Sensitive instrument
|
10%
increase
|
5%
increase
|
Value on
balance sheet
|
5%
decrease
|
10% decrease
|
|||||||||||||||
NIS in thousands
|
||||||||||||||||||||
Dollar-linked balances:
|
||||||||||||||||||||
Cash and cash equivalents
|
7,339 | 3,670 | 73,394 | (3,670 | ) | (7,339 | ) | |||||||||||||
Short-term bank deposits
|
2,804 | 1,402 | 28,037 | (1,402 | ) | (2,804 | ) | |||||||||||||
Restricted deposits*
|
57 | 28 | 569 | (28 | ) | (57 | ) | |||||||||||||
Other receivables
|
529 | 265 | 5,294 | (265 | ) | (529 | ) | |||||||||||||
Trade payables
|
(179 | ) | (90 | ) | (1,792 | ) | 90 | 179 | ||||||||||||
Payable to licensors
|
(149 | ) | (75 | ) | (1,491 | ) | 75 | 149 | ||||||||||||
Total dollar-linked balances
|
10,401 | 5,200 | 104,011 | (5,200 | ) | (10,401 | ) | |||||||||||||
Euro-linked trade payables
|
(41 | ) | (20 | ) | (406 | ) | 20 | 41 | ||||||||||||
Total
|
10,360 | 5,180 | 103,605 | (5,180 | ) | (10,360 | ) |
*
|
See also Note 12b(1).
|
December 31, 2009
|
||||||||||||||||||||
Income (loss)
|
Income (loss)
|
|||||||||||||||||||
Sensitive instrument
|
10%
increase
|
5%
increase
|
Value on
balance sheet
|
5%
decrease
|
10% decrease
|
|||||||||||||||
NIS in thousands
|
||||||||||||||||||||
Dollar-linked balances:
|
||||||||||||||||||||
Cash and cash equivalents
|
3,367 | 1,684 | 33,674 | (1,684 | ) | (3,367 | ) | |||||||||||||
Restricted deposits*
|
60 | 30 | 604 | (30 | ) | (60 | ) | |||||||||||||
Trade receivables
|
3,775 | 1,888 | 37,750 | (1,888 | ) | (3,775 | ) | |||||||||||||
Trade payables
|
(299 | ) | (149 | ) | (2,987 | ) | 149 | 299 | ||||||||||||
Payable to licensors
|
(1,057 | ) | (528 | ) | (10,570 | ) | 528 | 1,057 | ||||||||||||
Total dollar-linked balances
|
5,846 | 2,925 | 58,471 | (2,925 | ) | (5,846 | ) | |||||||||||||
Euro-linked balances:
|
||||||||||||||||||||
Cash and cash equivalents
|
155 | 77 | 1,550 | (77 | ) | (155 | ) | |||||||||||||
Trade payables
|
(219 | ) | (110 | ) | (2,196 | ) | 110 | 219 | ||||||||||||
(64 | ) | (33 | ) | (646 | ) | 33 | 64 | |||||||||||||
Trade payables linked to pound sterling
|
40 | 20 | 399 | (20 | ) | (40 | ) | |||||||||||||
Total
|
5,882 | 2,912 | 58,224 | (2,912 | ) | (5,822 | ) |
*
|
See also Note 12b(1).
|
Exchange rate of
USD 1
|
Exchange rate of
€ 1
|
Exchange rate of
£ 1
|
Israeli CPI*
|
|||||||||||||
NIS
|
NIS
|
NIS
|
Points
|
|||||||||||||
As of December 31:
|
||||||||||||||||
2009
|
3.775 | 5.442 | 6.111 | 122.57 | ||||||||||||
2010
|
3.549 | 4.738 | 5.493 | 125.83 | ||||||||||||
Percentage increase (decrease) in:
|
||||||||||||||||
2009
|
(0.7 | )% | 2.7 | % | 10.2 | % | 3.9 | % | ||||||||
2010
|
(6.0 | )% | (12.9 | )% | (10.1 | )% | 2.7 | % |
*
|
Based on the index for the month ending on each balance sheet date, on the basis of 2000 average = 100.
|
December 31, 2009
|
December 31, 2010
|
|||||||||||||||||||||||
Dollar
|
Other
currencies
|
NIS
|
Dollar
|
Other
currencies
|
NIS
|
|||||||||||||||||||
NIS in thousands
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Cash and cash
equivalents
|
33,674 | 1,949 | 70,267 | 73,394 | 320 | 38,032 | ||||||||||||||||||
Short term bank deposits
|
– | – | – | 28,037 | – | – | ||||||||||||||||||
Other receivables
|
– | – | 2,313 | 5,294 | – | 1,019 | ||||||||||||||||||
Trade receivables
|
37,750 | – | – | – | – | – | ||||||||||||||||||
Non-current assets:
|
||||||||||||||||||||||||
Restricted deposits
|
604 | – | 3,100 | 569 | – | 1,845 | ||||||||||||||||||
Total assets
|
72,028 | 1,949 | 75,680 | 107,294 | 320 | 40,896 | ||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Current maturities of bank loan:
|
– | – | – | – | – | 307 | ||||||||||||||||||
Accounts payable and accruals:
|
||||||||||||||||||||||||
Trade
|
2,987 | 2,221 | 1,244 | 1,792 | 515 | 1,542 | ||||||||||||||||||
OCS
|
– | – | 14,005 | – | – | 5,993 | ||||||||||||||||||
Licensors
|
10,570 | – | – | 1,491 | – | – | ||||||||||||||||||
Other
|
– | – | 7,307 | – | – | 6,775 | ||||||||||||||||||
Non-current liabilities:
|
||||||||||||||||||||||||
Long-term bank loan, net of current maturities
|
– | – | – | – | – | – | ||||||||||||||||||
Total liabilities
|
13,557 | 2,221 | 22,556 | 3,283 | 515 | 14,617 | ||||||||||||||||||
Net asset value
|
58,471 | (272 | ) | 53,124 | 104,011 | (195 | ) | 26,279 |
|
2)
|
Fair value of financial instruments
|
|
3)
|
Exposure to market risks and the management thereof
|
|
4)
|
Interest rate risks
|
|
b.
|
Credit risks
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
NIS in thousands
|
||||||||
Assets:
|
||||||||
Cash and cash equivalents
|
105,890 | 111,746 | ||||||
Short term bank deposits
|
– | 28,037 | ||||||
Trade accounts receivable
|
37,750 | – | ||||||
Other receivables
|
2,313 | 6,313 | ||||||
Restricted deposits
|
3,704 | 2,414 | ||||||
Total
|
149,657 | 148,510 |
|
c.
|
Liquidity risks
|
|
d.
|
Financial instruments
|
|
a.
|
Development expenses
|
|
b.
|
Grants/loans from the OCS
|
|
c.
|
Revenue recognition
|
|
a.
|
Cash and cash equivalents
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
NIS in thousands
|
||||||||
Cash on hand and in bank
|
700 | 1,642 | ||||||
Short-term bank deposits
|
105,190 | 110,104 | ||||||
105,890 | 111,746 |
|
b.
|
Short-term bank deposits
|
Cost
|
Accumulated depreciation
|
Net book value
|
||||||||||||||||||||||||||||||||||||||
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
|||||||||||||||||||||||||||||||||
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2007
|
2008
|
|||||||||||||||||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
||||||||||||||||||||||||||||||||||||||
Composition in 2008
|
||||||||||||||||||||||||||||||||||||||||
Office furniture and equipment
|
446 | 250 | – | 696 | 76 | 35 | – | 111 | 370 | 585 | ||||||||||||||||||||||||||||||
Computers and communications equipment
|
1,137 | 314 | – | 1,451 | 705 | 292 | – | 997 | 432 | 454 | ||||||||||||||||||||||||||||||
Laboratory equipment,
net*
|
1,654 | 1,346 | – | 3,000 | 459 | 374 | – | 833 | 1,195 | 2,167 | ||||||||||||||||||||||||||||||
Leasehold improvements
|
2,830 | 1,317 | – | 4,147 | 1,097 | 772 | – | 1,869 | 1,733 | 2,278 | ||||||||||||||||||||||||||||||
6,067 | 3,227 | – | 9,294 | 2,337 | 1,473 | – | 3,810 | 3,730 | 5,484 | |||||||||||||||||||||||||||||||
* Item is net of OCS grants received – see b. below
|
(2,222 | ) | (28 | ) | – | (2,250 | ) | 478 | 334 | – | 812 | (1,744 | ) | (1,438 | ) |
Cost
|
Accumulated depreciation
|
Net book value
|
||||||||||||||||||||||||||||||||||||||
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
|||||||||||||||||||||||||||||||||
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2009
|
2010
|
|||||||||||||||||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
||||||||||||||||||||||||||||||||||||||
Composition in 2010
|
||||||||||||||||||||||||||||||||||||||||
Office furniture and equipment
|
696 | 28 | – | 724 | 169 | 42 | – | 211 | 527 | 513 | ||||||||||||||||||||||||||||||
Computers and communications equipment
|
1,549 | 372 | (772 | ) | 1,149 | 1,251 | 234 | (772 | ) | 713 | 298 | 436 | ||||||||||||||||||||||||||||
Laboratory equipment,
net*
|
3,136 | 1,510 | – | 4,646 | 1,300 | 611 | – | 1,911 | 1,836 | 2,735 | ||||||||||||||||||||||||||||||
Leasehold improvements
|
4,147 | 47 | – | 4,194 | 2,633 | 736 | – | 3,369 | 1,514 | 825 | ||||||||||||||||||||||||||||||
9,528 | 1,957 | (772 | ) | 10,713 | 5,353 | 1,623 | (772 | ) | 6,204 | 4,175 | 4,509 | |||||||||||||||||||||||||||||
* Item is net of OCS grants received – see Note 12a(1)d
|
(2,250 | ) | – | – | (2,250 | ) | 1,150 | 338 | – | 1,488 | (1,100 | ) | (762 | ) |
Cost
|
Accumulated depreciation and impairment
|
Net book value
|
||||||||||||||||||||||||||||||||||||||
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
|||||||||||||||||||||||||||||||||
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2007
|
2008
|
|||||||||||||||||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
||||||||||||||||||||||||||||||||||||||
Composition in 2008
|
||||||||||||||||||||||||||||||||||||||||
Intellectual property
|
1,568 | 1,856 | – | 3,424 | – | – | 603 | 603 | 1,568 | 2,821 | ||||||||||||||||||||||||||||||
Computer software
|
549 | 172 | – | 721 | 134 | 203 | – | 337 | 415 | 384 | ||||||||||||||||||||||||||||||
2,117 | 2,028 | – | 4,145 | 134 | 203 | 603 | 940 | 1,983 | 3,205 |
Cost
|
Accumulated depreciation
|
Net book value
|
||||||||||||||||||||||||||||||||||||||
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
|||||||||||||||||||||||||||||||||
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2008
|
2009
|
|||||||||||||||||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
||||||||||||||||||||||||||||||||||||||
Composition in 2009
|
||||||||||||||||||||||||||||||||||||||||
Intellectual property
|
3,424 | 589 | (436 | ) | 3,577 | 603 | – | 148 | 751 | 2,821 | 2,826 | |||||||||||||||||||||||||||||
Computer software
|
721 | 39 | – | 760 | 337 | 207 | – | 544 | 384 | 216 | ||||||||||||||||||||||||||||||
4,145 | 628 | (436 | ) | 4,337 | 940 | 207 | 148 | 1,295 | 3,205 | 3,042 |
Cost
|
Accumulated depreciation
|
Net book value
|
||||||||||||||||||||||||||||||||||||||
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
Balance at
beginning
of year
|
Additions
during
year
|
Deletions
during
year
|
Balance at
end of
year
|
|||||||||||||||||||||||||||||||||
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2009
|
2010
|
|||||||||||||||||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
||||||||||||||||||||||||||||||||||||||
Composition in 2010
|
||||||||||||||||||||||||||||||||||||||||
Intellectual property
|
3,577 | – | (1,846 | ) | 1,731 | 751 | – | – | 751 | 2,826 | 980 | |||||||||||||||||||||||||||||
Computer software
|
760 | 347 | – | 1,107 | 544 | 191 | – | 735 | 216 | 372 | ||||||||||||||||||||||||||||||
4,337 | 347 | (1,846 | ) | 2,838 | 1,295 | 191 | – | 1,486 | 3,042 | 1,352 |
|
a.
|
Composition:
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
NIS in thousands
|
||||||||
Loan balance
|
– | 739 | ||||||
Less current maturities
|
– | (307 | ) | |||||
– | 432 |
|
b.
|
Future repayments of long-term bank loans (other than current maturities) in the years subsequent to the balance sheet date are as follows:
|
2012
|
307
|
|||
2013
|
125
|
|||
432
|
|
a.
|
Share capital
|
Number of Ordinary Shares
|
||||||||
December 31,
|
||||||||
2009
|
2010
|
|||||||
Authorized share capital
|
250,000,000 | 250,000,000 | ||||||
Issued share capital
|
123,497,029 | 123,558,660 | ||||||
Paid-up share capital
|
123,497,029 | 123,558,660 |
In NIS
|
||||||||
December 31,
|
||||||||
2009
|
2010
|
|||||||
Authorized share capital
|
2,500,000 | 2,500,000 | ||||||
Issued share capital
|
1,234,970 | 1,235,587 | ||||||
Paid-up share capital
|
1,234,970 | 1,235,587 |
|
b.
|
Rights related to shares
|
|
c.
|
Changes in the Company’s equity
|
|
1)
|
In February 2007, the Company conducted an initial public offering on the TASE of 28,690,000 Ordinary Shares and 14,345,000 Series 1 warrants. The net proceeds to the Company from the issuance amounted to approximately NIS 198,000,000.
|
|
2)
|
In July 2009, the Company issued 46,667,719 Ordinary Shares in a public rights offering. The total net proceeds from the offering amounted to NIS 51,800,000, after deducting NIS 900,000 of issuance costs. The rights offering included an embedded benefit of 25% to the Company’s shareholders (such embedded benefit being essentially a stock dividend for financial statement purposes).
|
|
3)
|
In December 2009, the Company issued 11,293,419 Ordinary shares and 7,528,946 Series 2 warrants in a public offering. Each warrant is exercisable into one Ordinary Share at an exercise price of NIS 6.08 (not linked). The warrants are exercisable for a period of two years from the date that they were registered for trading.
|
|
d.
|
Share-based payments
|
|
1)
|
In 2003, the Company’s Board of Directors approved a stock compensation plan for employees and consultants pursuant to which 1,328,500 Ordinary Shares were reserved for issuance upon the exercise of options. In 2005, the Company’s Board of Directors approved an expansion of the stock compensation plan for employees and consultants to allow the allotment of an additional up to 2,136,022 options exercisable into Ordinary Shares. In 2007, the Company’s Board of Directors approved a grant to employees and consultants of 9,996,566 shares and options exercisable into Ordinary Shares.
|
|
2)
|
Employee stock options
|
Year ended December 31,
|
||||||||||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||||||||||
Number of
options
|
Weighted
average
exercise price
(in NIS)
|
Number of
options
|
Weighted
average
exercise price
(in NIS)
|
Number of
options
|
Weighted
average
exercise price
(in NIS)
|
|||||||||||||||||||
Outstanding at beginning of year
|
5,071,486 | 1.02 | 5,509,986 | 1.16 | 2,053,551 | 2.44 | ||||||||||||||||||
Granted
|
491,500 | 2.98 | 198,330 | 2.31 | 4,905,400 | 4.11 | ||||||||||||||||||
Forfeited
|
(53,000 | ) | 4.25 | (658,137 | ) | 2.61 | (443,873 | ) | 4.89 | |||||||||||||||
Exercised
|
– | – | (2,996,628 | ) | 0.04 | (53,103 | ) | 0.46 | ||||||||||||||||
Outstanding at end of year
|
5,509,986 | 1.16 | 2,053,551 | 2.44 | 6,461,975 | 3.56 | ||||||||||||||||||
Exercisable at end of year
|
2,972,124 | 0.67 | 689,946 | 2.92 | 1,120,270 | 1.69 |
As of December 31,
|
Number of
options
outstanding
|
Range of
exercise
prices
(in NIS)
|
Weighted
average
remaining
contractual life
(in years)
|
|||||||||
2008
|
5,509,986 | 0.04 – 5.04 | 7.45 | |||||||||
2009
|
2,053,551 | 0.04 – 5.04 | 6.56 | |||||||||
2010
|
6,461,975 | 0.04 – 5.04 | 4.69 |
2008
|
2009
|
2010
|
||||||||||
Expected dividend yield
|
0 | % | 0 | % | 0 | % | ||||||
Expected volatility*
|
70 | % | 64 | % | 66 | % | ||||||
Risk-free interest rate
|
5 | % | 5 | % | 4 | % | ||||||
Expected life of options (in years)
|
7 | 7 | 5 |
*
|
Expected volatility has been computed on the basis of specific Company market data, as well as the data of similar companies operating in the same industry.
|
|
3)
|
Stock options to consultants
|
|
4)
|
See Note 16 regarding the option provided to Cypress Bioscience to pay up to half of the first milestone payment in consideration for the issuance of the Company’s Ordinary Shares.
|
|
a.
|
Corporate taxation in Israel
|
|
b.
|
Tax rates
|
|
c.
|
Tax loss carryforwards
|
|
d.
|
Tax assessments
|
|
e.
|
Theoretical taxes
|
Year ended December 31,
|
||||||||||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||||||||||
NIS in
thousands
|
NIS in
thousands
|
NIS in
thousands
|
||||||||||||||||||||||
Income (loss) before taxes
|
27 | % | (114,849 | ) | 26 | % | (61,518 | ) | 25 | % | 7,440 | |||||||||||||
Theoretical tax expense (tax benefit)
|
(31,009 | ) | (15,995 | ) | 1,860 | |||||||||||||||||||
Disallowed deductions (tax exempt income):
|
||||||||||||||||||||||||
Gain on adjusting warrants to fair value
|
(988 | ) | – | – | ||||||||||||||||||||
Share-based compensation
|
2,439 | 852 | 1,639 | |||||||||||||||||||||
Other
|
52 | 51 | 25 | |||||||||||||||||||||
Difference between the measurement basis of income reported for tax purposes and the measurement basis of income for financial reporting purposes (see Note 10)
|
(2,491 | ) | (10 | ) | – | |||||||||||||||||||
Realization of tax loss carryforwards for which deferred taxes were not created
|
– | – | (3,652 | ) |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in
thousands
|
NIS in
thousands
|
NIS in
thousands
|
||||||||||
Increase in taxes for tax losses and timing differences incurred in the reporting year for which deferred taxes were not recognized
|
31,997 | 15,102 | 128 | |||||||||
Taxes on income for the reported year
|
– | – | – |
|
f.
|
Deductible temporary differences
|
|
g.
|
Value-added tax (VAT)
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Income (loss) as reported in financial statements
|
(114,849 | ) | (61,518 | ) | 7,440 | |||||||
Income (loss) attributed to ordinary shares
|
(114,849 | ) | (61,518 | ) | 7,440 | |||||||
Number of shares used in basic calculation (in thousands)
|
78,131 | 96,693 | 123,512 | |||||||||
Adjustment for incremental dilutive shares from the theoretical exercise of options and warrants
|
– | – | 1,035 | |||||||||
Number of shares used in diluted calculation (in thousands)
|
– | – | 124,547 |
NIS
|
||||||||||||
Basic earnings (loss) per ordinary share*
|
(1.44 | ) | (0.63 | ) | 0.06 | |||||||
Diluted earnings (loss) per ordinary share*
|
– | – | 0.06 |
*
|
The loss per share and the number of shares for the years 2008 and 2009 have been retroactively adjusted in order to give retroactive effect to the benefit embedded in the rights offering, as detailed in Note 9c(2). The embedded benefit, which is the equivalent of a stock dividend, in such rights offering was 25%.
|
|
a.
|
Commitments
|
|
1)
|
Agreement with the State of Israel for the operation of a biotechnology incubator (the “Incubator”)
|
|
•
|
In the three years of a project’s incubator stage, the loan is repayable, plus accrued interest.
|
|
•
|
In the subsequent two years, the loan is repayable under the same terms, provided that the Incubator undertakes to maintain the advancement of the project at a rate similar to that of the preceding years.
|
|
•
|
In the three following years, the loan is repayable with the addition of a double interest charge, provided that the Incubator undertakes to continue advancing the project at a rate similar to that of the preceding years.
|
|
(a)
|
Period of the agreement
|
|
(b)
|
Scope of Incubator operations
|
|
(c)
|
Summary of the Group’s obligations
|
|
(d)
|
Summary of OCS obligations
|
|
(e)
|
The different tracks
|
|
(f)
|
Primary restrictions imposed on the Group and the Incubator
|
|
(g)
|
Repayment of loans
|
|
(h)
|
Security
|
|
(i)
|
To the best knowledge of the Company’s management, as of the date of approval of these financial statements, the Group is in compliance with its material obligations to the OCS under the Incubator Agreement.
|
|
2)
|
Obligation to pay royalties to the Government of Israel
|
|
3)
|
Licensing agreements
|
|
4)
|
Lease agreements
|
|
a)
|
The Company has entered into an operating lease agreement in connection with the lease of its premises. The agreement expires on December 15, 2012. The Group has an option to extend the lease agreement for two additional periods of 24 months each. The annual lease fees are linked to the dollar and amount to approximately NIS 921,000. As to bank deposits pledged to secure the Company’s liability under the lease agreement, see Note 12b(2).
|
|
b)
|
The Company has entered into operating lease agreements in connection with a number of vehicles. The lease periods are generally for three years. The annual lease fees, linked to the dollar, are approximately NIS 1,816,000. To secure the terms of the lease agreements, the Group has made certain prepayments to the leasing companies, representing approximately two months of lease payments. These amounts were recorded as prepaid expenses. See also Note 14b.
|
|
5)
|
Early Development Program (“EDP”) agreement
|
|
b.
|
Contingent liabilities
|
|
1)
|
As part of the Group’s obligations under the Incubator Agreement and to secure the Group’s liabilities to the OCS, the Company has provided a NIS 8,100,000 bank guarantee (linked to the CPI) in favor of Israel’s Ministry of Finance.
|
|
2)
|
To secure the Company’s liability to the lessor of its premises, the Group has pledged several dollar-denominated bank deposits in the amount of USD 160,000 (NIS 569,000), which are presented under non-current assets.
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Participation in EDP project funding (see below)
|
(2,525 | ) | (3,297 | ) | (2,997 | ) | ||||||
Benefits to related parties:
|
||||||||||||
Compensation and benefits to senior management, including benefit component of option grants
|
10,561 | 7,039 | 8,208 | |||||||||
Number of individuals to which this benefit related
|
5 | 6 | 5 | |||||||||
Compensation and benefits to directors, including benefit component of option grants
|
1,074 | 584 | 858 | |||||||||
Number of individuals to which this benefit related
|
3 | 3 | 3 |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Salaries and other short-term employee benefits
|
4,084 | 5,115 | 5,609 | |||||||||
Post-employment benefits
|
365 | 320 | 343 | |||||||||
Other long-term benefits
|
42 | 36 | 42 | |||||||||
Share-based compensation
|
7,144 | 2,152 | 3,072 | |||||||||
11,635 | 7,623 | 9,066 |
|
a.
|
Other receivables
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
NIS in thousands
|
||||||||
Withholding tax*
|
– | 5,294 | ||||||
Institutions
|
1,991 | 649 | ||||||
Grants receivable from the OCS
|
322 | 370 | ||||||
2,313 | 6,313 |
*
|
See Note 15.
|
|
b.
|
Long-term prepaid expenses
|
|
c.
|
Accounts payable and accruals
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
NIS in thousands
|
||||||||
1) Trade:
|
||||||||
Accounts payable:
|
||||||||
In Israel
|
1,224 | 1,539 | ||||||
Overseas
|
5,208 | 2,307 | ||||||
Checks payable
|
20 | 3 | ||||||
6,452 | 3,849 | |||||||
2) Other:
|
||||||||
Payroll and related expenses
|
1,318 | 1,496 | ||||||
Accrual for vacation and recreation pay
|
881 | 1,092 | ||||||
Accrued expenses
|
4,924 | 4,176 | ||||||
Grants on account of EDP project development financing not yet recognized in income
|
2,896 | 3,776 | ||||||
Other
|
184 | 11 | ||||||
10,203 | 10,551 |
|
d.
|
Cost of revenues
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Payments to licensors*
|
– | 17,817 | 25,571 | |||||||||
Payment to the OCS*
|
– | 4,369 | – | |||||||||
Intellectual property dispositions
|
– | 436 | – | |||||||||
– | 22,622 | 25,571 |
|
*
|
See Notes 15 and 16
|
|
e.
|
Research and development expenses — net
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Payroll and related expenses, including vehicles
|
21,161 | 16,384 | 18,566 | |||||||||
Depreciation and amortization
|
2,180 | 1,633 | 1,705 | |||||||||
Impairment of intellectual property
|
– | 148 | 1,846 | |||||||||
Patent related expenses
|
3,841 | 2,907 | 1,770 | |||||||||
Research and development services
|
95,665 | 66,534 | 16,265 | |||||||||
Professional fees
|
594 | 1,113 | 1,999 | |||||||||
Materials
|
1,693 | 248 | 301 | |||||||||
Overseas travel
|
2,231 | 471 | 215 | |||||||||
Office supplies and telephone
|
2,699 | 2,661 | 2,682 | |||||||||
Payments to the OCS (see Notes 15, 16)
|
– | 8,739 | 17,438 | |||||||||
Other
|
1,691 | 187 | 360 | |||||||||
131,755 | 101,025 | 63,147 | ||||||||||
Less – OCS participations in research and development costs – see also Notes 12a(1) and (2)
|
(23,074 | ) | (7,426 | ) | (5,184 | ) | ||||||
Less – participations in research and development costs by a related party – see Note 13
|
(2,525 | ) | (3,297 | ) | (2,997 | ) | ||||||
106,156 | 90,302 | 54,966 |
|
f.
|
Sales and marketing expenses
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Payroll and related expenses
|
– | 1,396 | 2,090 | |||||||||
Marketing
|
– | 1,400 | 2,258 | |||||||||
Overseas travel
|
– | 289 | 261 | |||||||||
– | 3,085 | 4,609 |
|
g.
|
General and administrative expenses
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Payroll and related expenses, including vehicles
|
7,863 | 6,792 | 6,205 | |||||||||
Professional fees
|
3,707 | 2,499 | 6,540 | |||||||||
Office supplies and telephone
|
170 | 121 | 111 | |||||||||
Office maintenance
|
100 | 117 | 69 | |||||||||
Depreciation
|
99 | 121 | 109 | |||||||||
Other
|
1,144 | 1,532 | 1,841 | |||||||||
13,083 | 11,182 | 14,875 |
|
h.
|
Finance income
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Gain on change in fair value of financial assets at fair value through profit or loss
|
273 | 98 | – | |||||||||
Income from interest and exchange differences on deposits
|
12,728 | 3,830 | 3,056 | |||||||||
13,001 | 3,928 | 3,056 |
|
i.
|
Finance expenses
|
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
NIS in thousands
|
||||||||||||
Exchange differences
|
12,172 | 2,064 | 8,696 | |||||||||
Bank commissions
|
97 | 100 | 59 | |||||||||
12,269 | 2,164 | 8,755 |
|
a.
|
In January 2011, the Group announced its intention to transfer its business development activities to Israel from the US.
|
|
b.
|
In February 2011, the Company granted 15,000 options to an employee, exercisable into Ordinary Shares at an exercise price of NIS 2.873 per share. The options vest over a four-year period.
|
|
c.
|
(Unaudited) In May 2011, the Company signed an agreement, effective June 1, 2011, to reacquire all development and commercialization rights to BL-1020 granted to Cypress Bioscience pursuant to the license agreement signed in June 2010 (see Note 16), as well as terminate the license agreement. In consideration for the reacquisition of such rights, including substantially all materials required for timely commencement of the BL-1020 clinical trial expected to commence in June 2011, the Company is obligated to pay Cypress Bioscience a 1% royalty on worldwide net sales of BL-1020 up to an aggregate cumulative amount of USD 80,000,000. In addition, the Company is obligated to pay Cypress Bioscience 10% of all future one-time payments received in respect of BL-1020, not to exceed an aggregate cumulative amount of USD 10,000,000, as reimbursement for costs that Cypress Bioscience incurred in developing the intellectual property portfolio, designing the clinical trial and conducting substantially all preparations to launch the trial.
|
|
·
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and
|
|
·
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for a crime that does not require proof of criminal intent.
|
|
·
|
a breach of duty of care to the company or to a third party, including a breach arising out of the negligent conduct of an office holder;
|
|
·
|
a breach of duty of loyalty to the company, provided the director or officer acted in good faith and had a reasonable basis to believe that the act would not prejudice the interests of the company; and
|
|
·
|
financial liabilities imposed on the office holder for the benefit of a third party.
|
|
·
|
a breach of duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
|
·
|
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
|
·
|
an act or omission committed with intent to derive illegal personal benefit; or
|
|
·
|
a fine levied against the office holder.
|
(b)
|
Financial Statement Schedules
|
(a)
|
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6 hereof, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
|
(b)
|
The undersigned Registrant hereby undertakes:
|
|
(1)
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
i.
|
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
|
ii.
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
|
|
iii.
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
|
|
(2)
|
That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
|
(3)
|
That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
(4)
|
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
|
BIOLINERX LTD.
|
|||
|
By:
|
/s/ Kinneret Savitsky | |
Kinneret Savitsky, Ph.D. | |||
Chief Executive Officer
|
Name
|
Title
|
Date
|
/s/ Kinneret Savitsky
|
Chief Executive Officer
(principal executive officer)
|
February 29, 2012
|
Kinneret Savitsky, Ph.D.
|
||
/s/ Philip Serlin
|
Chief Financial Officer and Chief Operating Officer
|
|
Philip Serlin
|
(principal financial officer and principal accounting officer)
|
February 29, 2012
|
/s/ Aharon Schwartz
|
Chairman of the Board
|
|
Aharon Schwartz, Ph.D.
|
February 29, 2012
|
|
/s/ Raphael Hofstein
|
Director
|
|
Raphael Hofstein, Ph.D.
|
February 29, 2012
|
|
/s/ Yakov Friedman
|
Director
|
|
Yakov Friedman
|
February 29, 2012
|
|
/s/ Avraham Molcho
|
Director
|
|
Avraham Molcho, M.D.
|
February 29, 2012
|
|
/s/ Nurit Benjamini
|
Director
|
|
Nurit Benjamini
|
February 29, 2012
|
|
/s/ Michael J. Anghel
|
Director
|
|
Michael J. Anghel, Ph.D.
|
February 29, 2012
|
|
/s/ Isaac Muller
|
Authorized United States Representative
|
|
Vcorp Agent Services, Inc.
Isaac Muller, President
|
February 29, 2012
|
Exhibit Number
|
Exhibit Description
|
||
2.1
|
Articles of Association of the Registrant, as amended November 17, 2011.
|
||
2.2
(2)
|
Form of Deposit Agreement dated as of ____________, 2011 among BioLineRx, Ltd., The Bank of New York Mellon, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder.
|
||
2.3
(2)
|
Form of American Depositary Receipt; the Form is Exhibit A of the Form of Depositary Agreement.
|
||
3.1
(1)
|
Registration Rights Agreement by and among Star Group, Yehuda Zisapel, Jerusalem Development Authority, the Company, Teva Pharmaceutical Industries Ltd., the Pitango Group, the Giza Group, and Hadasit Medical Research Services and Development Ltd. dated January 25, 2007.
|
||
4.2
(1)
|
Employment Agreement with Moshe Phillip, M.D., dated January 8, 2004.
|
||
4.3
(1)
|
Employment Agreement with Kinneret Savitsky, Ph.D., dated October 13, 2004.
|
||
4.5
(1)
|
Employment Agreement with Philip Serlin, dated May 24, 2009.
|
||
4.6†
(1)
|
License Agreement entered into as of January 10, 2005, by and between BioLine Innovations Jerusalem L.P. and B.G. Negev Technologies and Applications Ltd.
|
||
4.7
(1)
|
Assignment Agreement dated as of January 1, 2009 entered into by and between BioLine Innovations Jerusalem L.P. and BioLineRx Ltd.
|
||
4.8†
(1)
|
Research and License Agreement entered into as of April 15, 2004 by and among BioLineRx Ltd., Bar Ilan Research and Development Company Ltd., and Ramot and Tel Aviv University.
|
||
4.9
(1)
|
First Amendment, dated as of June 2004, of Research and License Agreement, dated April 15, 2004, by and among the Registrant, Ramot at Tel Aviv University Ltd. and Bar Ilan Research and Development Company Ltd.
|
||
4.10
(1)
|
Amendment Agreement dated as of December 20, 2005 entered into by and between the Registrant, Bar Ilan Research and Development Company Ltd. and Ramot at Tel Aviv University Ltd.
|
||
4.11
(1)
|
Amendment Agreement dated as of March 7, 2006, entered into by and between the Registrant, Bar Ilan Research and Development Company Ltd. and Ramot at Tel Aviv University Ltd.
|
||
4.12†
(1)
|
Assignment Agreement dated as of July 2, 2006 entered into by and between BioLineRx Ltd., Bar Ilan Research and Development Company Ltd., and Ramot and Tel Aviv University.
|
||
4.13
(1)
|
Incubator agreement with the Office of the Chief Scientist, January 2005.
|
||
4.14
(1)
|
Bridge Loan Agreement with Pan Atlantic Investments Limited dated January 10, 2007.
|
||
4.15
(1)
|
Early Development Program Agreement with Pan Atlantic Investments Limited, dated January 10, 2007.
|
||
4.16†
(1)
|
License Agreement between Innovative Pharmaceutical Concepts, Inc. and BioLineRx Ltd. dated November 25, 2007.
|
||
4.17†
(1)
|
Amended and Restated License and Commercialization Agreement by and among Ikaria Development Subsidiary One LLC and BioLineRx Ltd. and BioLine Innovations Jerusalem L.P. dated August 26, 2009.
|
4.18
(1)
|
BioLineRx Ltd. 2003 Share Option Plan.
|
||
4.19
(1)
|
Lease Agreement between Kaps-Pharma Ltd. and BioLine Innovations Jerusalem L.P., dated July 10, 2005, and Extension to Lease Agreement, dated December 4, 2008.
|
||
4.20
(1)
|
Amendment to Employment Agreement with Kinneret Savitsky, Ph.D., dated January 2, 2004.
|
||
4.21
(1)
|
Employment Agreement with Leah Klapper, Ph.D., dated January 27, 2005.
|
||
4.22
(1)
|
Rights Reacquisition Agreement entered into on May 10, 2011 between Cypress Bioscience, Inc. and BioLineRx Ltd.
|
||
4.24†
(1)
|
Amended and Restated License Agreement entered into on June 20, 2010 between Cypress Bioscience, Inc. and BioLineRx Ltd.
|
||
4.25†
(1)
|
Payment Date Extension Amendment by and among Ikaria Development Subsidiary One LLC and BioLineRx Ltd. and BioLine Innovations Jerusalem L.P., dated April 21, 2010.
|
||
4.26
(1)
|
Amendment to the Amended and Restated license and Commercialization Agreement by and among Ikaria Development Subsidiary One LLC and BioLineRx Ltd. and BioLine Innovations Jerusalem L.P., dated April 21, 2010.
|
||
4.27
(1)
|
Extension agreement dated January 2, 2011 to the Incubator Agreement with the Office of the Chief Scientist.
|
||
4.28
(1)
|
Sponsored Research Agreement entered into as of June 23, 2011 by and between Yissum Research Development Company of the Hebrew University of Jerusalem Ltd. and BioLineRx Ltd.
|
||
4.29
(1)
|
License Agreement entered into as of June 23, 2011 by and between Yissum Research Development Company of the Hebrew University of Jerusalem Ltd. and BioLineRx Ltd.
|
||
4.30
|
Employment Agreement with David Malek, dated August 8, 2011
|
||
4.31
(3)
|
Form of Warrant to purchase American Depositary Shares
|
||
5.1
|
Opinion of Yigal Arnon & Co., Israeli counsel to the Registrant
|
||
10.1
(3)
|
Form of Purchase Agreement between BioLineRx Ltd. and the Purchasers named therein, dated February 15, 2012
|
||
23.1
|
Consent of Kesselman & Kesselman, Certified Public Accountant (Isr.), a member of PricewaterhouseCoopers International Limited, independent registered public accounting firm for the Registrant.
|
||
23.2
|
Consent of Opinion of Yigal Arnon and Co., Israeli counsel to the Registrant (included in Exhibit 5.1).
|
||
†
|
Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
|
(1)
|
Incorporated by reference to the Registrant’s Registration Statement on Form 20-F (No. 001-35223) filed on July 1, 2011.
|
(2)
|
Incorporated by reference to Exhibit 1 of the Registration Statement on Form F-6 (No. 333-175360) filed by the Bank of New York Mellon with respect to the Registrant’s American Depositary Receipts.
|
(3)
|
Incorporated by reference to the Registrant’s Form 6-K filed on February 15, 2012.
|
BioLineRX Ltd.
Articles of Association of a Public Company
In accordance with
The Companies Law, 5759-1999
As of November 17, 2011
BioLineRX Ltd.
|
1.
|
Name of Company
|
|
The name of the Company is BioLineRX Ltd.
|
2.
|
Goals of the Company
|
|
The goal of the Company is to engage in any lawful business.
|
3.
|
Interpretation
|
|
3.1
|
Any statement in the singular shall also include the plural and vice versa; any statement in the masculine shall also include the feminine and vice versa.
|
|
3.2
|
Except insofar as these Articles include special definitions of certain terms, any word and expression in these Articles shall have the meaning attributed thereto in the Companies Law, 5759-1999 (in these Articles – “
the Companies Law
,”) unless this contradicts the written matter or the content thereof.
|
|
3.3
|
To prevent doubt it is clarified that regarding matters regulated in the Companies Law in such manner that the arrangements in these matters may be conditioned in the Articles, and in cases in which these Articles do not include different provisions from those in the Companies Law, the provisions of the Companies Law shall apply.
|
|
3.4
|
It is hereby clarified that the provisions of the Articles of Association of the Company as detailed below are subject to the provisions of the Companies Law, the Securities Law, and any law.
|
4.
|
The Share Capital of the Company and the Rights Attached to Shares
|
|
4.1
|
The registered capital of the Company is NIS 2,500,000, divided into 250,000,000 ordinary shares with a nominal value of NIS 0.01 each.
|
|
4.2
|
The ordinary shares shall entitle their owners to –
|
|
4.2.1
|
An equal right to participate in and vote at the general meetings of the Company, whether ordinary meetings or extraordinary meetings. Each of the shares in the Company shall entitle its owner present at the meeting and participating in the vote in person, by proxy, or by means of a letter of voting, to one vote;
|
|
4.2.2
|
An equal right to participate in the distribution of dividends, whether in cash or in benefit shares, in the distribution of assets, or in any other distribution, according to the proportionate nominal value of the shares held thereby;
|
|
4.2.3
|
An equal right to participate in the distribution of the surplus assets of the Company in the event of its liquidation in accordance with the proportionate nominal value of the shares held thereby.
|
|
4.3
|
The Board of Directors is entitled to issue shares and other convertible securities or securities that may be realized as shares up to the limit of the Company’s registered capital. For the purpose of calculating the limit of the registered capital, convertible securities or securities that may be realized as shares shall be considered to have been converted or realized as of their date of issue.
|
5.
|
Limited Liability
|
|
The liability of the shareholders for the Company’s debts shall be limited to the full amount (nominal value with the addition of premium) they shall be required to pay the Company for the shares and which they have not yet paid.
|
6.
|
Joint Shares and Share Certificates
|
|
6.1
|
The owner of a share registered in the registry of shareholders is entitled to receive from the Company, without payment and within a period of three months following the allocation or the registration of transfer, one share certificate stamped with the Company’s stamp regarding all the shares registered in his name, which certificate shall detail the number of shares. In the event of a jointly owned share, the Company shall issue one share certificate for all the joint owners of the share, and the delivery of such a certificate to one of the partners shall be considered delivery to them all.
|
Each share certificate shall bear the signature of at least one director, together with the Company stamp or its printed name.
|
|
6.2
|
A share certificate that has been defaced, destroyed, or lost may be renewed on the basis of such proof and guarantees as shall be required by the Company from time to time.
|
7.
|
The Company’s Reliefs relating to Shares that Have Not Been Fully Paid
|
|
7.1
|
If any or all of the remuneration the shareholder undertook to pay the Company in return for his shares has not been paid by such date and on such conditions as established in the conditions for the allocation of his shares and/or in the payment request as stated in section 7.2 below, the Company is entitled, by way of a decision of the Board of Directors, to forfeit the shares whose remuneration has not been fully paid. The forfeiture of shares shall take place provided that the Company has sent the shareholder written warning of its intention to forfeit the shares after at least 7 days from the date of receipt of the warning, insofar as payment shall not be made during the period determined in the letter of warning.
|
|
|
The Board of Directors is entitled, at any time prior to the date on which the forfeited share is sold, reallocated, or otherwise transferred, to nullify the forfeiture on such conditions as it shall see fit.
|
|
The forfeited shares shall be held by the Company as retired shares or shall be sold to another.
|
|
7.2
|
If, in accordance with the conditions of allocation of the shares, there is no fixed date for the payment of any part of the price to be paid on account thereof, the Board of Directors is entitled, from time to time, to present payment requests to the shareholders on account of monies not yet removed for the shares they hold, and each shareholder shall be obliged to pay the Company the amount requested on the date determined as stated, provided that he shall receive prior notice of 14 days of the date and place of payment (hereinafter – “
the Payment Request
.”) The notification shall specify that non-payment by or before the determined date and in the specified place may lead to the forfeiture of the shares regarding which payment is requested. A Payment Request may be nullified or postponed to another date, all as shall be decided by the Board of Directors.
|
|
7.3
|
Unless otherwise determined in the conditions of allocations of the shares, a shareholder shall not be entitled to receive a dividend or to exercise any right as a shareholder on account of shares that have not yet been fully paid.
|
|
7.4
|
Persons who are the joint owners of a share shall be liable jointly and severally for payment of the amounts due to the Company on account of the share.
|
|
7.5
|
The content of this section shall not derogate from any other relief of the Company vis-à-vis a shareholder who fails to pay his debt to the Company on account of his shares.
|
8.
|
Transfer of Shares
|
|
8.1
|
The Company’s shares are transferable.
|
|
8.2
|
The transfer of shares must be made in writing, and it shall be recorded only if –
|
|
8.2.1
|
A proper certificate for the transfer of shares, together with the certificates of the share intended for transfer, if such were issued, is delivered to the Company at its registered office. The certificate of transfer shall be signed by the transferor and by a witness confirming the signature of the transferor. In the event of the transfer of shares that are not fully paid as of the date of transfer, the certificate of transfer shall also be signed by the recipient of the share and by a witness testifying to the signature of the recipient; or
|
|
8.2.2
|
A court order for the amendment of the registration shall be delivered to the Company; or
|
|
8.2.3
|
It shall be proved to the Company that lawful conditions pertain for the transfer of the right to the share.
|
|
8.3
|
The transfer of shares that have not been fully paid requires the authorization of the Board of Directors, which is entitled to refuse to grant its authorization at its absolute discretion and without stating grounds therefore.
|
|
8.4
|
The recipient of the transfer shall be considered the shareholder regarding the transferred shares from the moment of the registration of his name in the registry of shareholders.
|
9.
|
Changes in Capital
|
|
9.1
|
The general meeting is entitled to increase the Company’s registered share capital by creating new shares of an existing type or a new type, all as shall be determined in the decision of the general meeting.
|
|
9.2
|
The general meeting is entitled to nullify registered share capital that has not yet been allocated, provided that there is no commitment, including a conditioned commitment, by the Company to allocate the shares.
|
|
9.3
|
The general meeting shall be entitled, subject to the provisions of any law:
|
|
9.3.1
|
To unify and redivide its share capital, or any part thereof, into shares of a nominal value greater than the nominal value of the existing shares.
|
|
9.3.2
|
To divide, by way of the redivision of any or all of the existing shares, its share capital into shares of a nominal value smaller than the nominal value of the existing shares.
|
|
9.3.3
|
To reduce its share capital and any reserved fund for the repayment of capital in such manner and on such conditions and with the receipt of such authorization as shall be required by the Companies Law.
|
10.
|
Changes in the Rights of Share Types
|
|
10.1
|
Unless otherwise stated in the conditions of issue of the shares, and subject to the provisions of any law, the rights of any share type may be changed following a decision of the Company’s Board of Directors, and with the authorization of the general meeting of shareholders of that type, or with the written consent of all the shareholders of that type. The provisions of the Company’s Articles of Association regarding general meetings shall apply,
mutatis mutandis
, to a general meeting of type shareholders.
|
|
10.2
|
The rights granted to the holders of shares of a specific type issued with special rights shall not be considered to have been changed by virtue of the creation or issue of additional shares of equal grade, unless otherwise conditioned in the conditions of issue of the said shares.
|
11.
|
General Meetings
|
|
11.1
|
Company decisions on the following matters shall be taken at the general meeting –
|
|
11.1.1
|
Changes to the Articles;
|
|
11.1.2
|
Exercising the authorities of the Board of Directors in the event that the Board of Directors is unable to perform its function;
|
|
11.1.3
|
Appointment of the auditing accountant of the Company and the cessation of employment thereof;
|
|
11.1.4
|
Appointment of directors, including external directors;
|
|
11.1.5
|
Authorization of actions and transactions requiring the authorization of the general meeting in accordance with the provisions of the Companies Law and any other law;
|
|
11.1.6
|
Increasing and decreasing the registered share capital;
|
|
11.1.7
|
Merger as defined in the Companies Law.
|
|
11.2
|
Subject to the provisions of the law, the general meeting is entitled to assume authorities granted to another organ in the Company, including the Board of Directors, for a particular matter or for a given period of time.
|
|
If the general meeting has assumed authorities granted to the Board of Directors in accordance with the Companies Law, the shareholders shall bear the same rights, obligations, and liability as apply to the Board of Directors regarding the exercising of those same authorities, as detailed in Article 50 of the Companies Law, as this shall be amended from time to time.
|
12.
|
Convening of General Meetings
|
|
12.1
|
General meetings shall be convened at least once a year at such a venue and on such a date as shall be determined by the Board of Directors, and subject to the provisions of the law, but not later than 15 months after the previous general meeting. These general meetings shall be called “annual meetings.” The remaining meetings of the Company shall be called “extraordinary meetings.”
|
|
12.2
|
The agenda at the annual meeting shall include discussion of the report of the Board of Directors and financial statements as required by law. The annual meeting shall appoint an auditing accountant; shall appoint the directors in accordance with these Articles; and shall discuss all other matters to be discussed at the annual meeting of the Company in accordance with these Articles or in accordance with the Companies Law, as well as any other matter as shall be determined by the Board of Directors.
|
|
12.3
|
The Board of Directors is entitled to convene an extraordinary meeting in accordance with its decision, and must convene a general meeting if a written request is received from any of the following (hereinafter – “
Request to Convene
:”)
|
|
12.3.1
|
Two directors or one-fourth of the incumbent directors; and/or
|
|
12.3.2
|
One or more shareholders holding at least five percent of the issued capital and at least one percent of the voting rights in the Company; and/or
|
|
12.3.3
|
One or more shareholders holding at least five percent of the voting rights in the Company.
|
|
12.4
|
Any Request to Convene must specify the goals for whose purpose the meeting is to be convened, and shall be signed by those requesting the convening and delivered at the Company’s registered office. The request may consist of a number of documents of identical format, each signed by one or more individuals making the request.
|
|
12.5
|
A Board of Directors required to convene an extraordinary meeting shall convene such meeting within twenty-one days from the date on which the Request to Convene was submitted thereto, for a date determined in an invitation in accordance with section 12.6 below and subject to any law.
|
|
12.6
|
Notification of the members of the Company regarding the convening of a general meeting shall be published or delivered to all the shareholders registered in the registry of shareholders in the Company in accordance with the requirements of the law. The notification shall include the agenda, the proposed decisions, and arrangements regarding voting in writing.
|
13.
|
Discussion at General Meetings
|
|
13.1
|
The discussion at the general meeting shall be opened only if a legal quorum is present at the time the discussion begins. A legal quorum is the presence of at least two shareholders holding at least 25 percent of the voting rights (including presence by means of proxy or through a letter of voting) within one half-hour from the time specified for the opening of the meeting.
|
|
13.2
|
If, at the end of one half-hour from the time specified for the opening of the meeting, no legal quorum is present, the meeting shall be postponed by one week, to the same day, the same hour, and the same venue, or to a later date, if specified on the invitation to the meeting or in the notification of the meeting (hereinafter – “
the Postponed Meeting
.”) Notification and invitation regarding a Postponed Meeting postponed for a period of not more than 21 days shall be made not later than seventy-two hours prior to the Postponed Meeting. Notification of a Postponed Meeting shall be made as stated in section 12.6,
mutatis mutandis
.
|
|
13.3
|
The legal quorum for commencing a Postponed Meeting shall be any number of participants.
|
|
13.4
|
The chairperson of the Board of Directors shall serve as the chairperson of the general meeting. If the chairperson of the Board of Directors is absent from the meeting after 15 minutes from the time specified for the meeting, or if he refuses to serve as the chairperson of the meeting, the chairperson shall be elected by the general meeting.
|
|
13.5
|
A general meeting with a legal quorum is entitled to decide on the postponement of the meeting to another date and to such venue as shall be determined and, in this case, notifications and invitations to the Postponed Meeting shall be made as stated in section 13.2 above.
|
14.
|
Voting at a General Meeting
|
|
14.1
|
A shareholder in the Company shall be entitled to vote at general meetings in person or by means of a proxy or a letter of voting.
|
|
Shareholders entitled to participate in and vote at the general meeting are the shareholders as of such date as shall be determined by the Board of Directors in the decision to convene the general meeting, and subject to any law.
|
|
14.2
|
In any vote, each shareholder shall have a number of votes equivalent to the number of shares in their possession entitling the holder to a vote.
|
|
14.3
|
A decision at the general meeting shall be taken by an ordinary majority unless another majority is determined in the Companies Law or in these Articles.
|
|
14.4
|
The declaration by the chairperson of the meeting that a decision has been adopted unanimously or by a given majority, or rejected or not adopted by a given majority, shall constitute prima facie evidence of the content thereof.
|
|
14.5
|
If the votes at the meeting are equally divided, the chairperson of the meeting shall not have an additional or casting opinion and the decision presented for voting shall be rejected.
|
|
14.6
|
Subject to any law, the shareholders in the Company are entitled to vote in any matter on the agenda of a general meeting (including type meetings) by means of a letter of voting, provided that the Board of Directors, subject to any law, has not negated in its decision to convene the general meeting the possibility of voting by means of a letter of voting on that matter.
|
|
If the Board of Directors has prohibited voting by means of a letter of voting, the fact of the negation of the possibility of voting by means of a letter of voting shall be stated in the notification of the convening of the meeting in accordance with section 12.6 above.
|
|
14.7
|
A shareholder is entitled to state the manner of his vote in the letter of voting and to deliver this to the Company up to 48 hours prior to the time of commencement of the meeting. A letter of voting stating the manner of voting of the shareholder reaching the Company at least 48 hours prior to the time of commencement of the meeting shall be considered tantamount to presence at the meeting, including for the matter of the presence of the legal quorum as stated in section 13.1 above.
|
|
14.8
|
Appointment of a proxy shall be in writing, signed by the appointer (hereinafter – “
Power of Attorney
.”) A corporation shall vote by means of its representatives, who shall be appointed in a document signed properly by the corporation (hereinafter – “
Letter of Appointment
.”)
|
|
14.9
|
A vote in accordance with the conditions of a Power of Attorney shall be lawful even if the appointer dies before the voting, or becomes legally incompetent, is liquidated, becomes bankrupt, nullifies the Letter of Appointment, or transfers the share regarding which it was given, unless written notification is received at the Company’s office prior to the meeting that the shareholder has died, become legally incompetent, been liquidated, become bankrupt, or has nullified the Letter of Appointment or transferred the shares as stated.
|
|
14.10
|
The Letter of Appointment and the Power of Attorney, or a copy authorized by an attorney, shall be deposited at the Company’s registered offices at least forty eight (48) hours prior to the time determined for the meeting or for the Postponed Meeting at which the person mentioned in the document intends to vote in accordance therewith.
|
|
14.11
|
A shareholder in the Company shall be entitled to vote at the Company’s meetings by means of several proxies appointed thereby, provided that each proxy shall be appointed on account of different sections of the shares held by the said shareholder. There shall be no impediment to each proxy as stated voting in a different manner in the Company’s meetings.
|
|
14.12
|
If a shareholder is legally incompetent, he is entitled to vote by means of his trustees, the recipient of his assets, his natural guardian or other legal guardian, and these are entitled to vote in person or by proxy or a Letter of Voting.
|
|
14.13
|
When two or more persons are the joint owners of a share, in a vote on any matter the vote of the person whose name is registered first in the registry of shareholders as the owner of that share shall be accepted, whether in person or by proxy, and he is entitled to deliver Letters of Voting to the Company.
|
15.
|
The Board of Directors
|
|
The Board of Directors shall set the Company’s policy, supervise the execution of the functions and actions of the general director, and, within this, shall act and shall enjoy all the authorities detailed in Article 92 of the Companies Law. In addition, any authority not granted in the Companies Law or in these Articles to another organ may be exercised by the Board of Directors, in addition to the authorities and functions of the Board of Directors in accordance with the content of any law.
|
16.
|
Appointment of the Board of Directors and Cessation of Office Thereof
|
|
16.1
|
The number of directors in the Company shall be determined from time to time by the annual general meeting, provided that this shall not be fewer than 5 and not more than 10 directors, including external directors. The number of external directors in the Company shall not be less than the number determined in the Companies Law.
|
|
16.2
|
The directors in the Company shall be elected at an annual meeting and/or an extraordinary meeting, and shall serve in their office for so long as they have not been replaced by the shareholders of the Company at an annual meeting and/or at an extraordinary meeting, or until they cease to serve in their office in accordance with the provisions of the Articles or any law, whichever is the earlier.
|
|
16.3
|
In addition to the content of section 16.2 above, the Board of Directors is entitled to appoint a director in place of a director whose position has become vacant and/or by way of an addition to the Board of Directors, subject to the maximum number of directors on the Board of Directors as stated in section 16.1 above. The appointment of a director by the Board of Directors shall remain valid through the next annual meeting or until the director shall cease to serve in their office in accordance with the provisions of these Articles or of any law, whichever is the earlier.
|
|
16.4
|
A director whose period of office has expired may be reelected, with the exception of an external director, who may be reelected for an additional period of office subject to the provisions of the law.
|
|
16.5
|
The office of a director shall commence on the date of their appointment by the annual meeting and/or the extraordinary meeting and/or the Board of Directors, or on a later date if this date is determined in the decision of appointment of the annual meeting and/or the extraordinary meeting and/or the Board of Directors.
|
|
16.6
|
The Board of Directors shall elect one of its members as the chairperson of the Board of Directors. The elected chairperson shall run the meetings of the Board of Directors and shall sign the minutes of the discussion. If no chairperson is elected, or if the chairperson of the Board of Directors is not present after 15 minutes from the time set for the meeting, the directors present shall choose one of their number to serve as the chairperson at that meeting, and the chosen member shall run the meeting and sign the minutes of the discussion.
|
The chairperson of the Board of Directors shall not be the general director of the Company unless the conditions stipulated in Article 121(C) of the Companies Law apply.
|
|
16.7
|
The general meeting is entitled to transfer any director from their office prior to the end of the period of their office, inter alia whether the director was appointed thereby in accordance with section 16.2 above or was appointed by the Board of Directors in accordance with section 16.3 above, provided that the director shall be given a reasonable opportunity to state their case before the general meeting.
|
|
16.8
|
Any director is entitled, with the agreement of the Board of Directors, to appoint a substitute for themselves (hereinafter – “
a Substitute Director
,”) provided that a person who is not competent shall not be appointed to serve as a Substitute Director, nor a person who has been appointed as a Substitute Director for another director and/or a person who is already serving as a director in the Company.
|
The appointment or cessation of office of a Substitute Director shall be made in a written document signed by the director who appointed him; in any case, however, the office of a Substitute Director shall be terminated if one of the cases stipulated in the paragraphs in section 16.9 below shall apply, or if the office of the member of the Board of Directors for whom he serves as a substitute shall become vacant for any reason.
|
A Substitute Director is considered tantamount to a director and all the legal provisions and the provisions of these Articles shall apply, with the exception of the provisions regarding the appointment and/or dismissal of a director as established in these Articles.
|
|
16.9
|
The office of a director shall become vacant in any of the following cases:
|
|
16.9.1
|
He resigns from his office by means of a letter signed in his hand, submitted to the Company and detailing the reasons for his resignation;
|
|
16.9.2
|
He is removed from his office by the general meeting;
|
|
16.9.3
|
He is convicted of an offense as stated in Article 232 of the Companies Law;
|
|
16.9.4
|
In accordance with a court decision as stated in Article 233 of the Companies Law;
|
|
16.9.5
|
He is declared legally incompetent;
|
|
16.9.6
|
He is declared bankrupt and, if the director is a corporation – it opted for voluntary liquidation or a liquidation order was issued against it.
|
|
16.10
|
In the event that the position of a director becomes vacant, the remaining directors shall be entitled to continue to act, provided the number of directors remaining shall not be less than the minimum number of directors as stated above in section 16.1 above. If the number of directors falls below the above-mentioned minimum number, the remaining directors shall be entitled to act solely in order to fill the place of the director that has become vacant as stated in section 16.3 above, or in order to convene a general meeting of the Company, and pending the convening of the general meeting of the Company as stated they may act to manage the Company’s affairs solely in matters that cannot be delayed.
|
|
16.11
|
The conditions of office of the members of the Board of Directors shall be authorized in accordance with the provisions of the Companies Law.
|
17.
|
Meetings of the Board of Directors
|
|
17.1
|
The Board of Directors shall convene for a meeting in accordance with the needs of the Company, and at least once every three months.
|
|
17.2
|
The chairperson of the Board of Directors is entitled to convene the Board at any time. In addition, the Board of Directors shall hold a meeting on such subject as shall be specified in the following cases:
|
|
17.2.1
|
In accordance with the request of two directors; however, if at the time the Board of Directors comprises five directors or less – in accordance with the request of one director;
|
|
17.2.2
|
In accordance with the request of one director if, in his request to convene the Board, he states that he has learned of a matter in the Company ostensibly entailing a violation of the law or infringement of proper business practice;
|
|
17.2.3
|
If a general director has been appointed in the Company or if a notification or report by the general director require an action on the part of the Board of Directors;
|
|
17.2.4
|
If the auditing accountant has informed the chairperson of the Board of Directors – or, in the event that no chairperson was appointed for the Board of Directors, has informed the Board of Directors – of substantial defects in the accounting control of the Company.
|
|
17.3
|
Notification of the meeting of the Board of Directors shall be delivered to all members of the Board at least three days prior to the date of convening of the Board, or with shorter prior notice insofar as the chairperson of the Board decided that, in the circumstances of the matter, it is vital and reasonable to convene the Board of Directors with notice shorter than three days. Notification shall be delivered to the address of the director as forwarded to the Company in advance, and shall stipulate the time of the meeting and the venue at which it shall convene, as well as reasonable detail of all subjects on the agenda.
|
Notwithstanding the above, the Board of Directors is entitled to convene a meeting without notification, with the consent of all the directors.
|
|
17.4
|
The agenda of the meetings of the Board of Directors shall be determined by the chairperson of the Board and shall include: Subjects determined by the chairperson of the Board; subjects deriving from the report of the general director and/or the auditing accountant; any subject a director of the general director have requested of the chairperson of the Board to include on the agenda, at least two days prior to the convening of the meeting of the Board.
|
If no chairperson has been appointed for the Board of Directors, the agenda for the meetings of the Board shall be determined by the directors in such manner that each director shall send to the Company, at least two days before the convening of the meeting of the Board, the subjects that, in his opinion, should be included in the meeting of the Board. The agenda for the meetings of the Board shall also include subjects deriving from the report of the general director and/or the auditing accountant.
|
|
17.5
|
The details of the subjects on the agenda as stated in section 17.4 above do not prevent discussion of a subject or subjects not mentioned in the notification of the meeting of the Board of Directors (hereinafter: “
a New Subject
.”)
|
If a New Subject is discussed at the meeting of the Board of Directors, a director not present at the meeting of the Board of Directors at which the New Subject was discussed may express in writing his opposition to the decision and/or request that the subject be discussed again, within three days from the date on which he received a copy of the decision. If a further discussion is requested as stated, this shall be held by the Board of Directors on such date as shall determined by the chairperson of the Board of Directors or, in his absence, by the Board of Directors, and not later than seven days after the receipt of the request. However, the objection of the director to the decision on the New Subject shall not impair the validity of actions regarding third parties undertaken on the basis thereof.
|
|
17.6
|
The legal quorum for the commencement of a meeting of the Board of Directors shall be a majority of the members of the Board of Directors. If, at the end of one half-hour from the time set for the commencement of the meeting, no quorum is present, the meeting shall be postponed to another date as decided by the chairperson of the Board, or, in his absence, by the directors present at the convened meeting, provided that prior notification of three days shall be given to all directors regarding the date of the Postponed Meeting. The legal quorum for the opening of a Postponed Meeting shall be any number of participants.
|
|
17.7
|
The Board of Directors is entitled to hold meetings by use of any means of communication, providing that all the participating directors can hear each other simultaneously.
|
|
17.8
|
The Board of Directors is entitled to take decisions without actually convening, provided that all the directors entitled to participate in the discussion and to vote on the subject brought for decision agree thereto. If decisions are made as stated in this section, the chairperson of the Board of Directors shall record minutes of the decisions stating the manner of voting of each director on the subjects brought for decision, as well as the fact that all the directors agreed to take the decision without convening.
|
18.
|
Voting on the Board of Directors
|
|
18.1
|
Each director shall have one vote when voting on the Board of Directors.
|
|
18.2
|
Decisions of the Board of Directors shall be taken by a majority vote. The chairperson of the Board of Directors shall not have any additional or casting opinion, and in the event of a tie vote, the decision brought for voting shall be rejected.
|
19.
|
Committees of the Board of Directors
|
|
19.1
|
The Board of Directors is entitled to establish committees and to appoint members thereto (hereinafter – “
the Committees of the Board of Directors
.”) If Committees of the Board of Directors are established, the Board of Directors shall determine, in the conditions of empowerment thereof, whether specific authorities of the Board of Directors shall be delegated to the Committees of the Board of Directors, in such manner that the decision of the Committee of the Board of Directors shall be considered tantamount to a decision of the Board of Directors, or whether the decision of the Committee of the Board of Directors shall merely constitute a recommendation, subject to the authorization of the Board of Directors; provided that authorities to make decisions in the matters stated in Article 112 of the Companies Law shall not be delegated to a committee.
|
|
19.2
|
A person who is not a director shall not serve in a Committee of the Board of Directors to which the Board of Directors has delegated authorities. Persons who are not members of the Board of Directors may serve in a Committee of the Board of Director whose function is merely to advise or submit recommendations to the Board of Directors.
|
|
19.3
|
The provisions included in these Articles relating to the meetings of the Board of Directors and voting therein shall apply,
mutatis mutandis
and subject to the decisions of the Board of Directors regarding the procedures for the meetings of the committee (if any), to any Committee of the Board of Directors comprising two or more members.
|
20.
|
Audit Committee
|
|
20.1
|
The Board of Directors of the Company shall appoint an audit committee from among its members. The number of members of the audit committee shall be not less than three, and any external director may be a member thereof. The chairperson of the Board of Directors or any director employed by the Company, or providing it with services on a regular basis, or a controlling shareholder in the Company, or a relative thereof shall not be appointed to the committee.
|
|
20.2
|
The functions of the audit committee shall be –
|
|
20.2.1
|
To identify defects in the business management of the Company, inter alia through consultation with the internal auditor of the Company or the auditing accountant, and to propose methods to the Board of Directors for correcting these;
|
|
20.2.2
|
To decide whether to authorize actions and transactions requiring the authorization of the audit committee in accordance with the Companies Law.
|
21.
|
General Director
|
|
The Board of Directors of the Company shall appoint a general director, and is entitled to appoint more than one general director. The general director shall be responsible for the routine management of the Company’s affairs within the framework of the policy set by the Board of Directors and subject to its guidelines.
|
22.
|
Exemption, Insurance, and Indemnification
|
|
22.1
|
enter into a contract for the insurance of the liability, in whole or in part, of any of its “Office Holders” (as defined in the Companies Law) with respect to an obligation imposed on such Office Holder due to an act performed by the Office Holder in the Office Holder’s capacity as an Office Holder of the Company arising from any of the following:
|
|
22.1.1
|
a breach of duty of care to the Company or to any other person;
|
|
22.1.2
|
a breach of the duty of loyalty to the Company provided that the Office Holder acted in good faith and had reasonable grounds to assume that the act would not harm the interests of the Company;
|
|
22.1.3
|
a financial liability imposed on such Office Holder in favor of any other person:
|
|
22.1.4
|
reasonable litigation expenses, including attorneys fees, incurred by the Office Holder as a result of an ongoing administrative enforcement proceeding instituted against him in accordance with the Israeli Securities Law. Without derogating from the generality of the foregoing, such expenses will include, and the Company may procure insurance for, a payment imposed on the Office Holder in favor of an injured party as set forth in Section 52CIV(a)(1)(a) of the Israeli Securities Law and expenses that the Office Holder incurred in connection with a proceeding under Chapters VIII”3, VIII”4 or IX”1 of the Israeli Securities Law, including reasonable legal expenses, which term includes attorney fees; and
|
|
22.1.5
|
any other incident for which it is or shall be permitted to insure the liability of an officer.
|
|
22.2
|
undertake, in advance to indemnify, or may indemnify retroactively, an Office Holder of the Company with respect to any of the following liabilities or expenses that arise from an act performed by the Office Holder by virtue of being an Office Holder of the Company:
|
|
22.2.1
|
a financial liability imposed on an Office Holder in favor of another person by any judgment, including a judgment given as a result of a settlement or an arbitrator’s award which has been confirmed by a court;
|
|
22.2.2
|
reasonable litigation expenses including attorney’s fees, incurred by him as a result of an investigation or proceeding instituted against him by an authority empowered to conduct an investigation or proceedings, which are concluded without the filing of an indictment against the Office Holder and without the levying of a monetary obligation in lieu of criminal proceedings upon the Office Holder, or which are concluded without the filing of an indictment against the Office Holder but with levying a monetary obligation in substitute of such criminal proceedings upon the Office Holder for a crime that does not require proof of criminal intent; or in connection with an administrative enforcement proceeding or a financial sanction. Without derogating from the generality of the foregoing, such expenses will include, and the Company may undertake to indemnify an Office Holder of the Company as aforesaid, for a payment imposed on the Office Holder in favor of an injured party as set forth in Section 52LIV(a)(1)(a) of the Israeli Securities Law and expenses that the Office Holder incurred in connection with a proceeding under Chapters VIII”3, VIII”4 or IX’1 of the Israeli Securities Law, including reasonable legal expenses, which term includes attorney fees; and
|
|
22.2.3
|
reasonable litigation expenses, including attorney’s fees, expended by an Office Holder or which were imposed on an Office Holder by a court in proceedings filed against the Office Holder by the Company or in its name or by any other person or in a criminal charge on which the Office Holder was acquitted or in a criminal charge on which the Office Holder was convicted for an offense which did not require proof of criminal intent; and
|
|
22.2.4
|
any other obligation or expense for which it is or shall be permitted to indemnify an officer, provided however, that in the event the Company wishes to indemnify an Office Holder in advance for financial liabilities under Article 22 it may only do so if the undertaking to indemnify the Office Holder for such liabilities was restricted to those events that the Board may deem foreseeable in light of the Company’s actual activities, at the time of giving of such undertaking, and to a specific sum or a reasonable criterion under such circumstances as determined by the Board.
|
23.
|
Subject to the provisions of the Law and the Israeli Securities Law, the Company hereby releases, in advance, its Office Holders from liability to the Company for damage that arises from the breach of the Office Holder’s duty of care to the Company.
|
24.
|
The provisions of Articles 22 and 23 are not intended, and shall not be interpreted, to restrict the Company in any manner in respect of the procurement of insurance or in respect of indemnification (i) in connection with any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder, or (ii) in connection with any Office Holder to the extent that such insurance and/ or indemnification is not specifically prohibited under the Companies Law; provided that the procurement of any such insurance or the provision of any such indemnification shall be approved by the Board. Any modification of Articles 22 through 24, and any amendment to the Companies Law, the Israeli Securities Law or any other applicable law, shall be prospective in effect and shall not affect the Company’s obligation or ability to indemnify an Office Holder for any act or omission occurring prior to such modification or amendment, unless otherwise provided by the Companies Law, the Israeli Securities Law or such applicable law.
|
25.
|
Internal Auditor
|
|
25.1
|
The Board of Directors of the Company shall appoint an internal auditor in accordance with the proposal of the audit committee. A person who is an interested party in the Company, an office holder therein, or the relative or either of the above, as well as the auditing accountant or any person on his behalf, shall not serve as an internal auditor in the Company.
|
|
25.2
|
The Board of Directors shall determine which office holder shall be organizationally accountable for the internal auditor and, in the absence of such determination; this shall be the chairperson of the Board of Directors.
|
|
25.3
|
The internal audit plan prepared by the auditor shall be submitted to the audit committee for authorization; however, the Board of Directors is permitted to determine that the plan shall be submitted to the Board of Directors for authorization.
|
26.
|
Auditing Accountant
|
|
26.1
|
The general meeting shall appoint an auditing accountant for the Company. The auditing accountant shall service in his office through the end of the following annual meeting, or for a longer period as determined by the annual meeting, provided that the period of office shall not be extended beyond the end of the third annual meeting following that at which he was appointed.
|
|
26.2
|
The fee of the auditing accountant for the auditing operations shall be determined by the Board of Directors. The Board of Directors shall report to the annual meeting on the fee of the auditing accountant.
|
27.
|
Signing in the Company’s Name
|
|
27.1
|
The rights to sign in the Company’s name shall be determined from time to time by the Board of Directors of the Company.
|
|
27.2
|
The Company’s authorized signatory shall do so together with the Company’s stamp, or alongside its printed name.
|
28.
|
Dividend and Benefit Shares
|
|
28.1
|
The decision by the Company to allocate a dividend and/or to allocate benefit shares shall be taken by the Company’s Board of Directors.
|
|
28.2
|
Unless determined otherwise by the Board of Directors, it shall be permitted to pay any dividend by way of check or payment order to be sent by mail in accordance with the registered address of the shareholder or the personal eligible thereto or, in the case of joint registered owners of the same share, to that shareholder whose name is mentioned first in the registry of shareholders with regard to the joint ownership. Any such check shall be made out to order of the person to whom it is sent. A receipt from a person whose name, as of the date of declaration of the dividend, is registered in the registry of shareholders as the owner of any share or, in the case of joint owners, of one of the joint owners, shall serve as authorization regarding all payments made in connection with that share and regarding which the receipt was received.
|
|
28.3
|
For the purpose of executing any decision in accordance with the provisions of this section, the Board of Directors is entitled to resolve as it sees fit any difficulty that emerges regarding distribution of the dividend and/or the benefit shares, including determining the value for the purpose of the said division of certain assets, and to determine that payments in cash shall be made to members on the basis of the value so determined; to determine provisions regarding fractions of shares; or to determine that sums of less than NIS 50 shall not be paid to a shareholder.
|
29.
|
Redeemable Securities
|
|
The Company is entitled, subject to any law, to issue redeemable securities on such conditions as shall be determined by the Board of Directors, provided that the general meeting shall approve the recommendation of the Board of Directors and the conditions established thereby.
|
30.
|
Donations
|
|
The Company is entitled to donate a reasonable sum of money for a fit purpose. The Board of Directors of the Company is entitled to determine, at its discretion, rules for the making of donations by the Company.
|
31.
|
Accounts
|
|
31.1
|
The Company shall maintain accounts and shall prepare financial statements in accordance with the Securities Law and in accordance with any law.
|
|
31.2
|
The account ledgers shall be held at the Company’s registered offices or in any other place as the directors shall see fit, and shall always be open for inspection by the directors.
|
32.
|
Notifications
|
|
32.1
|
Subject to any law, a notification or any other document that shall be delivered by the Company, and which it is entitled or required to issue in accordance with the provisions of the Articles and/or the Companies Law, the Securities Law, or any law, shall be delivered by the Company to any person in one of the following manners as decided by the Company in each individual case: (A) By dispatch by registered mail in a letter addressed in accordance with the registered address of that shareholder in the registry of shareholders, or in accordance with such address as stated by the shareholder in a letter to the Company as the letter for the delivery of notifications or other documents; or (B) By dispatch by facsimile in accordance with the number stated by the shareholder as the number for the delivery of facsimile notifications; or (C) By way of publication in two daily newspapers appearing in Israel; or (D) By way of publication in the distribution site of the Securities Authority and the Tel Aviv Stock Exchange Ltd.
|
|
32.2
|
Any notification to be made to shareholders shall be made, regarding jointly owned shares, to that person whose name is mentioned first in the registry of shareholders as the holder of that share, and any notification made in this manner shall be sufficient notification for the holders of that share.
|
|
32.3
|
Any notification or other document sent in accordance with the provisions of section 30.1 above shall be considered to have reached its destination: (A) Within 3 business days – if sent by registered mail in Israel; or (B) On the first business day after its dispatch, if delivered by hand or sent by facsimile; or (C) On the date of publication, if published in a newspaper or on the distribution site of the Securities Authority and the Tel Aviv Stock Exchange Ltd.
|
|
In proving delivery, it shall be sufficient to prove that the letter sent by mail included the notification and that the document was addressed properly and was delivered to the post office as a letter bearing stamps, or as a registered letter bearing stamps, and, regarding a facsimile, it shall be sufficient to produce a dispatch confirmation sheet from the dispatching facsimile machine.
|
|
32.4
|
Any record made in an ordinary manner in the company’s registry shall be considered prima facie evidence of dispatch as recorded in that registry.
|
|
32.5
|
When it is necessary to provide prior notification of a certain number of days, or when notification is valid for a certain period, the date of delivery shall be included in reckoning the number of days or the period.
|
1.
|
Employment
.
|
|
1.1.
|
The Executive shall serve in the position described in
Exhibit A
commencing on October 16, 2011 (the “
Commencement Date
”). The Executive shall be under the direct supervision of and comply with the directives of the CEO of BioLine and/or any such individual designated by BioLine at its sole discretion (the “
Supervisor
”). The Executive shall perform the duties, undertake the responsibilities and exercise the authority as determined from time to time by the Supervisor diligently, conscientiously and in furtherance of BioLine’s best interests. Executive’s duties and responsibilities hereunder may also include other services performed for affiliates of BioLine.
|
|
1.2.
|
During the Employment Period, Executive shall honestly, diligently, skillfully and faithfully serve BioLine, and undertakes to devote all of Executive’s efforts and the best of his/her qualifications and skills to promoting the business and affairs of BioLine, and shall at all times act in a manner suitable of his position and status in BioLine.
|
|
1.3.
|
The Executive agrees and undertakes to inform BioLine, immediately after becoming aware of any matter that may in any way raise a conflict of interest between Executive and BioLine. Executive shall not receive during any payment, compensation or benefit from any third party in connection, directly or indirectly, with the execution of Executive’s position in BioLine.
|
|
1.4.
|
Executive will be employed on a full time basis. Executive shall not undertake or accept any other paid or unpaid employment or occupation or engage in any other business activity except with the prior written consent of BioLine, which shall not be unreasonably withheld.
|
|
1.5.
|
Executive hereby confirms and declares that his/her position is one that requires a special measure of personal trust and loyalty. Accordingly, the provisions of the Hours of Work and Rest Law-1951 shall not apply to Executive, and Executive shall not be entitled to any compensation for working more than the maximum number of hours per week set forth in said law or any other applicable law.
|
|
1.6.
|
The Executive may also work outside of regular working hours and outside of regular working days, as may be required by BioLine from time to time.
|
|
1.7.
|
The parties hereby confirm that this is an agreement for personal services and that the relationship between the parties shall not be subject to any general or special collective employment agreement or any custom or practice of BioLine with respect to any of its other Executives or contractors.
|
2.
|
Place of Performance
. Executive shall be based at BioLine’s facilities in Israel or at such other place as is otherwise appropriate to the functions being performed by BioLine. Executive acknowledges and agrees that his/her position may involve significant domestic and international travel.
|
______________________
BioLine
|
______________________
Employee
|
3.
|
Executive’s Representations and Warranties
. Executive represents and warrants that the execution and delivery of this Agreement and the fulfillment of all its terms: (i) will not constitute a default under or conflict with any agreement or other instrument to which Executive is a party or by which Executive is bound; and (ii) do not require the consent of any person or entity. Further, with respect to any past engagement Executive may have had with third parties and with respect to any allowed engagement Executive may have with any third party during the term of his/her engagement with BioLine (for purposes hereof, such third parties shall be referred to as “
Other Employers
”), Executive represents, warrants and undertakes that: (a) Executive’s engagement with BioLine is and will not be in breach of Executive’s undertakings towards Other Employers, and (b) Executive will not disclose to BioLine, or use, in provision of any services to BioLine, any proprietary or confidential information belonging to any Other Employers. Executive further represents and warrants that: (c) he/she does not suffer from any medical condition that may prevent from complying with duties and obligations under this Agreement; (d)
based on the Executive's best knowledge regarding his current physical condition
, the employment by BioLine will not cause any hazard to Executive’s health.
|
4.
|
Proprietary Information; Confidentiality and Non-Competition
. The Executive is obligated to keep all the terms and covenants of this Agreement under strict confidentiality. By executing this Agreement, Executive agrees to the provisions of BioLine’s Proprietary Information, Confidentiality and Non-Competition Agreement attached as
Exhibit B
hereto. The terms of Executive’s employment are personal and confidential, and Executive undertakes to keep such terms in confidence and shall refrain from disclosing such terms to any third party.
|
5.
|
Period of Employment
. Executive’s employment by BioLine commences on the Commencement Date for an initial period of three (3) months (the “
Initial Period
”) and shall then continue, unless terminated in accordance with the provisions of this Agreement (the Initial Period together with subsequent periods of employment pursuant to this Agreement shall be referred to as the “
Employment Period
”).
|
|
5.1.
|
Death or Disability
. The Executive’s employment will terminate upon the death of the Executive, and BioLine may terminate the Executive’s employment after having established the Executive’s disability. For purposes of this Agreement, “disability” means a physical or mental infirmity which impairs the Executive’s ability to substantially perform Executive’s duties under this Agreement which continues for a period of at least ninety (90) consecutive days. Upon termination for disability, the Executive shall be entitled to severance pay required by law, in accordance with the terms of this Agreement.
|
|
5.2.
|
Termination at Will
. Either party may terminate the employment relationship hereunder at any time by giving the other party prior written notice, as set forth in Exhibit A
(the “
Notice Period
”).
|
|
5.3.
|
Termination for Cause
. In the event of a termination for Cause (as defined below), BioLine may immediately terminate the employment relationship effective as of the time of notice of the same, and without payment in lieu of prior notice. “
Cause
” means (i) a serious breach of trust including but not limited to theft, embezzlement, self-dealing, prohibited disclosure to unauthorized persons or entities of confidential or proprietary information of or relating to BioLine or its affiliates, and the engaging by Executive in any prohibited business competitive to the business of BioLine; (ii) any willful failure to perform or failure to perform competently any of Executive’s fundamental functions or duties hereunder, which was not cured within thirty (30) days after receipt by Executive of written notice thereof; (iii) any breach of this Agreement by the Executive; and (iv) any other cause justifying termination or dismissal without severance payment under applicable law.
|
______________________
BioLine
|
______________________
Employee
|
|
5.4.
|
Notice Period; End of Relations
. During the Notice Period, the employment relationship hereunder shall remain in full force and effect and there shall be no change in Executive’s position with BioLine, the Salary, or in any other obligations of either party hereunder, unless otherwise determined by BioLine in a written notice to Executive, and Executive shall cooperate with BioLine and assist BioLine with the integration into BioLine of the person who will assume Executive’s responsibilities. At the option of BioLine, the Executive shall during such period either continue with Executive’s duties or remain absent from BioLine’s premises. However, BioLine, at its own discretion, may terminate this Agreement and the employment relationship at any time immediately upon a written notice and pay Executive an amount equal to the Salary referred to in Section 6 below that would have been paid to Executive during the Notice Period in lieu of the prior notice.
|
|
5.5.
|
Without derogating from all of BioLine’s rights according to the provisions of this Agreement and the law, upon the termination of this Agreement, BioLine shall have the right to deduct from any payment to be paid to the Executive any sum owed by the Executive to BioLine.
|
6.
|
Salary
.
|
|
6.1.
|
BioLine shall pay or cause to be paid to the Executive during the term of this Agreement a gross salary in the amount set forth in
Exhibit A
per month (the “
Base
Salary
”).
|
|
6.2.
|
The Salary will be paid no later then the 9
th
day of each calendar month after the month for which the Salary is paid, after deduction of any and all taxes and charges applicable to Executive, as may be in effect or which may hereafter be enacted or required by law. Executive shall notify BioLine of any change which may affect Executive’s tax liability.
|
7.
|
Bonus Plan
|
|
7.1.
|
During the Employment Period, the Executive shall be eligible to receive one or more bonus payments determined in accordance with the terms specified below.
|
|
7.2.
|
For the purposes of this section 7:
|
|
7.2.1.
|
For each Significant Out-Licensing Deal signed and closed, the Executive shall be eligible to receive a one-time Bonus payment equal to 35% of Annual Salary.
|
|
7.2.2.
|
For each “Strategic Deal” signed and closed, the Executive shall be eligible to receive a one-time payment equal to 17% of the Annual Salary.
|
|
7.2.3.
|
The payments aforementioned in section 7.2.1 and 7.2.2 shall be payable with the salary payment immediately following the closure of the deal, and in each case subject to review and approval of BioLine’s Board of Directors.
|
______________________
BioLine
|
______________________
Employee
|
8.
|
Relocation costs loan
|
|
8.1.
|
The loan shall be provided within 7 days after the date that this Agreement is signed, and shall bear linkage to the consumer price index + annual interest at the lowest rate allowed in accordance with the rules for employee loans currently in effect as established by the Israeli Income Tax Authority.
|
|
8.2.
|
After completion of one year of Employment, 33% of the loan (including accrued interest) shall be forgiven.
|
|
8.3.
|
After completion of two years of employment, 100% of the loan (including accrued interest) shall be forgiven.
|
|
8.4.
|
In the event that the Executive decides to terminate the employment arrangement prior to completion of two years of employment, the balance amount of loan then in effect (including accrued interest) shall become payable within 30 day of termination, and the Executive hereby agrees that the balance amount shall be deducted from the Executive's Salary and/or any other payment due to the Executive by BioLine. In the event that BioLine decides to terminate the employment arrangement, other than for cause (as defined herein), the entire loan balance (including accrued interest) shall be immediately forgiven.
|
|
8.5.
|
The Executive will be responsible for all income taxes that may be payable upon forgiveness of the loan and accrued interest.
|
9.
|
Insurance and Social Benefits
.
|
|
9.1.
|
Manager’s Insurance; Pension Fund
. Subsequent to the Initial Period, and subject to the continued employment of Executive following the Initial Period, BioLine will insure Executive, retroactive to the Commencement Date, under a “Manager’s Insurance Scheme” or pension fund to be selected by BioLine in coordination with Executive (unless otherwise agreed to by the parties) (collectively the “
Policy
”), such that BioLine will pay an amount equal to 13⅓% of the Salary towards a such Policy, of which 5% shall be for pension fund payments and 8⅓% shall serve to cover severance compensation. In addition, BioLine shall deduct from the Salary an amount equal to 5% of the Salary, and forward the same to the Policy. Any tax payable in respect of such contributions to the Policy shall be borne and paid by the Executive.
|
|
9.2.
|
The Executive hereby agrees and acknowledges that all of the payments that BioLine shall make to the abovementioned Policy shall be instead of any severance pay to which the Executive or Executive’s successors shall be entitled to receive from BioLine with respect to the salary from which these payments were made and the period during which they were
made, in accordance with Section 14 of the Severance Pay Law 5723-1963 (the “
Law
”). The parties hereby adopt the General Approval of the Minister of Labor and Welfare, published in the Official Publications Gazette No. 4659 on June 30, 1998, attached hereto as
Exhibit C
. BioLine hereby waives in advance any claim it has or may have to be refunded any of the payments made to the manager’s insurance policy, unless (i) the Executive’s right to severance pay is invalidated by a court ruling on the basis of Sections 16 or 17 of the Law (and in such case only to the extent it is invalidated), or (ii) the Executive withdrew funds from the manager’s insurance policy for reasons other than an “Entitling Event”. An “Entitling Event” means death, disability or retirement at the age of sixty (60) or more.
|
______________________
BioLine
|
______________________
Employee
|
|
9.3.
|
Disability Insurance
. In addition to the foregoing, during the Employment Period BioLine will bear the cost of disability insurance with an insurance company (
Ovdan Kosher Avoda
). The amount paid by BioLine for such insurance shall be as generally accepted, but shall not exceed 2.5% of the Salary.
|
|
9.4.
|
Advanced Study Fund
. At the end of the Initial Period, and subject to the continued employment of Executive following the Initial Period, BioLine will maintain an advanced study fund (
Keren Hishtalmut
) recognized by the Israeli Income Tax Authorities, retroactive to the Commencement Date, such that BioLine and Executive shall contribute to such fund an amount equal to 7.5% of the Salary and 2.5% of the Salary, respectively. Any tax payable in respect of such contributions to such fund shall be borne and paid by the Executive. All payments and contributions of BioLine with respect to these benefits shall be limited to the Salary and up to the highest amount recognized by the tax authorities.
|
|
9.5.
|
Convalescence
. During the Employment Period, Executive shall be entitled to receive convalescence allowance (
Dmei Havra’a
) pursuant to applicable law.
|
|
9.6.
|
Sick Leave
. The Executive shall be
entitled to be
absent from work each year due to illness for the number of days allowed pursuant to the Sick Pay Law 5736 - 1976, and shall be entitled to fully paid sick leave upon presentation of appropriate medical documentation regarding said illness. Any amounts paid to the Executive on account of the disability insurance indicated in subsection 7.3 above, will be on account of sick leave payment.
|
|
9.7.
|
Reserve Service
. During the Employment Period, BioLine shall pay the full salary of the Executive during the period of the Executive’s military reserve service. National Insurance Institute transfers in connection with such military reserved duty shall be retained by BioLine.
|
|
9.8.
|
Vacation
. During the Employment Period, Executive shall be entitled to vacation in the number of working days per year as set forth in
Exhibit A
, as adjusted in accordance with applicable law. A “working day” shall mean Sunday to Thursday inclusive, and the use of said vacation days will be coordinated with BioLine. Executive shall be entitled to accumulation and redemption of vacation days in accordance with BioLine’s Executives’ handbook, which may be amended from time to time in BioLine’s sole discretion.
|
|
9.9.
|
Mobile Phone; Computer
. During the Employment Period, the Executive shall be entitled to receive a mobile phone. Executive shall use the mobile phone in a standard and reasonable manner, and in accordance with BioLine’s policies. During the Employment Period, the Executive may be entitled to receive a laptop computer. Executive shall use such computer in a standard and reasonable manner, and in accordance with BioLine’s policies. The mobile phone and computer (together hereinafter: "
The Equipment
") shall at all times remain the property of BioLine. The Executive hereby agrees that any amount due by the Executive to BioLine in connection with the equipment (including charges for use above the authorized limit, compensation for loss or damage of the equipment etc.) shall be deducted from the Executive's Salary.
|
|
9.10.
|
Automobile.
For purposes of performance of Executive’s duties and tasks, and during the Employment Period, BioLine shall make available to Executive a company vehicle, leased or owned by BioLine of a type to be elected by BioLine, in accordance with its policies which may be amended from time to time (the “
Company Car
”). Executive shall use the Company Car in accordance with BioLine’s car policy then in effect, as well as the requirements of the leasing company and the insurance company. BioLine shall bear the cost of maintenance and repairs, and any insurance deductibles for the Company Car, in accordance with its policies and a separate Car Agreement which will be signed between Executive and BioLine. Fuel expenses will be covered by BioLine in accordance with the Company’s policy. Executive shall be liable for paying for fuel usage exceeding the limit determined in accordance with the Company’s policy, as well as any parking and/or traffic fines received in connection herewith, and for any damages and expenses in case of negligent use of the Company Car and/or use of the Company Car not in accordance with BioLine’s applicable policies. All taxes arising out of the use of the Company Car shall be borne by Executive, and Executive acknowledges that such taxes will be withheld from Executive’s salary as required by law. Executive further acknowledges that the tax treatment of the use of the Company Car by Executive is subject to change without notice, and any economic impact resulting from such changes will be Executive’s sole responsibility. For the avoidance of doubt, Executive agrees that the cost of the leasing and/or the cost of the use of the Company Car shall not constitute a component of Executive’s Salary, including with regard to social benefits and/or any other right to which Executive is entitled by virtue of this Agreement or under law. The Executive shall be required to follow rules and regulations as to the usage of the Company Car as described in the “Company Car Lease Agreement” or “Car Addendum” provided to the Executive prior to receipt of the Company Car. The Company Car will remain in BioLine’s ownership, and will be returned to BioLine immediately upon termination of Executive’s employment with BioLine for any reason, as of the date of termination. The Executive shall not be entitled to use a Company Car during unpaid leaves or absences, unless specifically approved by BioLine in writing.
|
______________________
BioLine
|
______________________
Employee
|
10.
|
BioLine Property
. Executive acknowledges and agrees that the computer, telephone, email account and any other device providing for transmittal and storage of information, which are placed at Executive’s disposal by BioLine during the Employment Period are and shall remain the property of BioLine. Executive confirms its understanding that BioLine regularly reviews email correspondence and other information transmitted and stored by using the equipment stated above, and BioLine reserves the right to copy, store, present to others, and use such information.
|
11.
|
Expenses
. Executive shall be reimbursed for all direct business expenses borne by Executive, in accordance with BioLine’s policies as determined by BioLine from time to time, provided that such expenses were approved by Executive’s Supervisor in advance. As a condition to reimbursement, Executive shall be required to provide BioLine with all invoices, receipts and other evidence of expenditures as may be reasonably required by BioLine from time to time.
|
12.
|
Options
. Subject to the approval of the Board of Directors of BioLine. Executive shall be granted options to purchase Ordinary Shares par value NIS 0.01 each of BioLine, in the amount set forth in Exhibit A, to be granted pursuant to, and in accordance with, the terms and conditions of the share option plan adopted by BioLine (the “
Options
”).
|
13.
|
General
.
|
|
13.1.
|
The laws of the State of Israel shall apply to this Agreement and the sole and exclusive place of jurisdiction in any matter arising out of or in connection with this Agreement shall be the Jerusalem Regional Labor Court. The provisions of this Agreement are in lieu of the provisions of any collective bargaining agreement, and therefore, no collective bargaining agreement shall apply with respect to the relationship between the parties hereto (subject to the applicable provisions of law).
|
______________________
BioLine
|
______________________
Employee
|
|
13.2.
|
This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements with respect to the subject matter hereof. This Agreement may not be modified except by written instrument signed by a duly authorized representative of each party. No failure, delay of forbearance of either party in exercising any power or right hereunder shall in any way restrict or diminish such party’s rights and powers under this Agreement, or operate as a waiver of any breach or nonperformance by either party of any terms of conditions hereof. In the event that it shall be determined under any applicable law that a certain provision set forth in this Agreement is invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement.
|
|
13.3.
|
This Agreement may be assigned by BioLine. Executive may not assign or delegate his/her duties under this Agreement without the prior written consent of BioLine. This agreement shall be binding upon the heirs, successors and permitted assignees of Executive. The provisions of this Agreement shall survive the termination of the Employment Period and the assignment of this Agreement by BioLine to any successor or other assignee.
|
/s/ Philip Serlin
BioLineRx Ltd.
By: Philip Serlin
Title: CFO/COO
|
/s/ David Malek
Executive
Name: David Malek
|
______________________
BioLine
|
______________________
Employee
|
1.
|
Name of Executive:
|
David Malek
|
2.
|
ID No. of Executive:
|
034371252
|
3.
|
Address of Employee:
|
19 Stephan Weis, Haifa
|
4.
|
Position in BioLine:
|
VP of Business Development
|
5.
|
Commencement Date:
|
October 16, 2011
|
6.
|
Notice Period:
|
a.During the Initial Period – 14 days.
b.Following the Initial Period – 60 days
|
7.
|
Base Salary:
|
NIS 42,000
The Base Salary shall be increased to NIS 44,000 on January 1, 2012
|
8.
|
Options
|
250,000 options
|
9.
|
Vacation Days Per Year:
|
20
|
10.
|
Manager’s Insurance
|
Yes – as detailed in the body of the Agreement
|
11.
|
Pension Fund
|
Yes – as detailed in the body of the Agreement
|
12.
|
Disability Insurance
|
Yes – as detailed in the body of the Agreement
|
13.
|
Advance Study Fund
|
Yes – as detailed in the body of the Agreement
|
14.
|
Automobile
|
Yes -
vehicles of similar value to Mazda 6, Subaru B4
– as detailed in the body of the Agreement
|
15.
|
Mobile Phone
|
Yes – management level mobile phone - as detailed in the body of the Agreement
|
16.
|
Computer
|
Yes – as detailed in the body of the Agreement
|
______________________
BioLine
|
______________________
Employee
|
1.
|
General
.
|
|
1.1.
|
All capitalized terms herein shall have the meanings ascribed to them in the Employment Agreement to which this Exhibit B is attached (the “
Employment Agreement
”). For purposes of any undertaking of the Executive toward BioLine, the term BioLine shall include all subsidiaries and affiliates of BioLine including its General and Limited Partners
|
|
1.2.
|
The Executive’s obligations and representations and BioLine’s rights under this Exhibit B (this “
Agreement
”) shall apply as of the Commencement Date of the employment relationship between BioLine and the Executive, and as of the first time in which Executive became engaged with BioLine, regardless of the date of execution of the Employment Agreement.
|
|
1.3.
|
Executives undertakings hereunder shall remain in full force and effect after termination of this Agreement or the Employment Agreement, or any renewal thereof.
|
2.
|
Executive acknowledges that he/she has received and/or may receive information of a confidential and proprietary nature regarding the activities and business of BioLine, its parent companies, subsidiaries and/or affiliates, all whether in oral, written, graphic, or machine-readable form, or in any other form, including, but not limited to, (i) patents and patent applications and related information, (ii) trade secrets and industrial secrets, and (iii) drugs, compounds, molecules, building blocks, chemical libraries, reaction protocols for chemical libraries, chemical structures, chemical design and model relationship data, chemical databases, assays, samples, media and other biological materials, procedures and formulations for producing any such materials, products, processes, ideas, know-how, trade secrets, drawings, inventions, improvements, formulas, equations, methods, developmental or experimental work, research or clinical data, discoveries, developments, designs, techniques, instruments, devices, computer software and hardware related to the current, future and/or proposed products and services, and including, without limitation, information regarding research, development, new service offerings or products, marketing and selling, business plans, forecasts, business methods, budgets, finances, licensing, collaboration and development arrangements, prices and costs, buying habits and practices, contact and mailing lists and databases, vendors, customers and clients, and potential business opportunities, and personnel (collectively, “
Confidential Information
”). Confidential Information may also include information furnished to BioLine by third parties, which, for purposes of this Agreement, shall all be deemed Confidential Information of BioLine. Notwithstanding the aforesaid, information that is in the public domain, through no act or omission of the Executive shall not be deemed Confidential Information. The Confidential Information and all right, title and interest therein will remain at all times the exclusive property of BioLine (or any third party entrusting its own Confidential Information to BioLine).
|
3.
|
At all times during the Employment Period and thereafter, Executive will hold all Confidential Information in strictest confidence and will not disclose, use, or make any copies thereof. Executive hereby assigns to BioLine any rights that the Executive may have or acquire in such Confidential Information and recognize that all Confidential Information shall be the sole property of BioLine and its assigns or licensors, as applicable.
|
4.
|
Executive represents that he/she has assigned to BioLine all inventions, original works of authorship, developments, improvements, and trade secrets which were conceived, developed, made or reduced to practice by Executive prior to the date of the this Agreement or the Commencement Date, whichever is earlier (collectively referred to as “
Prior Inventions
”), in which Executive has or purports to have any ownership interest in or a license to use, and which relate to BioLine’s current or proposed business, products or research and development.
|
______________________
BioLine
|
______________________
Employee
|
5.
|
Executive will promptly disclose and describe to BioLine all inventions, improvements, designs, concepts, techniques, methods, processes, know how, and trade secrets, whether or not patentable, copyrightable or protectible as trade secrets that are made, developed, conceived or first reduced to practice or created by Executive, whether alone or jointly with others, during the provision of Consulting Services (i) which relate to BioLine’s business or actual or demonstrably anticipated research or development, (ii) which are developed in whole or in part on BioLine’s time or with the use of any of BioLine’s Confidential Information or other information, equipment, supplies, facilities or trade secret information, or (iii) which result directly or indirectly from any work performed by Executive for BioLine (the “
Inventions
”, and each an “
Invention
”).
|
6.
|
Executive hereby assigns and agrees to assign in the future (when any such Inventions or Proprietary Rights (defined below) are first reduced to practice or first fixed in a tangible medium, as applicable) to BioLine or its designee(s) all of Executive’s right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes. Executive further specifically assigns to BioLine all original works of authorship, including any related moral rights, which are made by the Executive (solely or jointly with others) during the Employment Period which are protectable by copyright pursuant to applicable copyright law. Executive also agrees to assign all of his/her right, title and interest in and to any particular Invention to any third party, including without limitation government agency, as directed by BioLine.
|
7.
|
Executive will assist BioLine in every proper way to obtain, and from time to time enforce, any Proprietary Rights relating to any Inventions in any and all countries. To that end Executive will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as BioLine may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, Executive will execute, verify and deliver assignments of such Proprietary Rights to BioLine or its designee. Executive’s obligation to assist BioLine with respect to Proprietary Rights relating to any such Inventions in any and all countries shall continue indefinitely beyond termination of the Employment Period for any reason (the “
Termination Date
”), but BioLine shall compensate Executive at a reasonable rate after the Termination Date for the time actually spent by Executive at BioLine’s request on such assistance.
|
8.
|
In the event that BioLine is unable for any reason, after reasonable effort, to secure Executive’s signature on any document needed in connection with the actions specified in the preceding paragraph, Executive hereby irrevocably designates and appoints BioLine and its duly authorized officers and agents as Executive’s agent and attorney in fact, which appointment is coupled with an interest, to act for and in Executive’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by the Executive. Executive hereby waives and holds BioLine harmless from any and all claims, of any nature whatsoever, which Executive now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to BioLine.
|
______________________
BioLine
|
______________________
Employee
|
9.
|
Executive agrees to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by BioLine) of all Confidential Information developed by the Executive and all Inventions made by the Executive during the Employment Period to BioLine, which records shall be available to and remain the sole property of BioLine at all times.
|
10.
|
During the Employment Period, Executive will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom Executive has an obligation of confidentiality, and Executive will not bring onto the premises of BioLine any unpublished documents or any property belonging to any former employer or any other person to whom Executive has an obligation of confidentiality unless consented to in writing by that former employer or person.
|
11.
|
Upon the earlier of (i) a written request by BioLine; or (ii) the expiration or termination of the employment, Executive shall promptly return to BioLine all Confidential Information, together with any and all copies or excerpts thereof and any and all other information directly or indirectly derived therefrom. Return or destruction of the Confidential Information as required hereunder shall not affect Executive’s remaining obligations pursuant to this Agreement.
|
12.
|
Non Competition; Non Solicitation
.
|
|
12.1.
|
In consideration of Executive’s terms of employment, which include special compensation for Executive’s undertakings under this Section 12, and in order to enable BioLine to effectively protect its Proprietary Information, Executive undertakes that during the Employment Period and for a period of twelve (12) months from the Termination Date, Executive will not directly or indirectly: (i) carry on or hold an interest in any company, venture, entity or other business (other than a minority interest in a publicly traded company) which directly competes with the products or services of BioLine, (a “
Competing Business
”) (including, without limitation, as a shareholder); (ii) act as a consultant or Executive or officer or in any managerial capacity in a Competing Business, or supply in direct competition with BioLine services to any person who, to Executive’s knowledge, was provided with services by BioLine any time during the twelve (12) months immediately prior to the Termination Date; (iii) solicit, canvass or approach or endeavor to solicit, canvass or approach any person who, to Executive’s knowledge, was provided with services by BioLine at any time during the twelve (12) months immediately prior to the Termination Date, for the purpose of offering services or products which directly compete with the services or products supplied by BioLine at the Termination Date; or (iv) employ, solicit or entice away or endeavor to solicit or entice away from BioLine any person employed by BioLine any time during the twelve (12) months immediately prior the Termination Date with a view to inducing that person to leave such employment and to act for another employer in the same or a similar capacity.
|
|
12.2.
|
Insofar as the protective covenants set forth in this Agreement are concerned, Executive specifically acknowledges, stipulates and agrees as follows: (i) the protective covenants are reasonable and necessary to protect the goodwill, property and Proprietary Information of BioLine, and the operations and business of BioLine; and (ii) the time duration of the protective covenants is reasonable and necessary to protect the goodwill and the operations and business of BioLine, and does not impose a greater restrain than is necessary to protect the goodwill or other business interests of BioLine. Nevertheless, if any of the restrictions set forth in this Agreement is found by a court having jurisdiction to be unreasonable or overly-broad as to geographic area, scope or time or to be otherwise unenforceable, the parties intend for the restrictions set forth in this Agreement to be reformed, modified and redefined by such court so as to be reasonable and enforceable and, as so modified by such court, to be fully enforced.
|
______________________
BioLine
|
______________________
Employee
|
13.
|
Executive represents that Executive’s performance of all the terms of the Employment Agreement and this Agreement does not and will not breach any agreement to keep in confidence information acquired by Executive in confidence or in trust prior to Executive’s relationship with BioLine. Executive has not entered into, and agrees that he/she will not enter into, any agreement either written or oral in conflict herewith.
|
14.
|
Executive hereby consents that in the event that the Executive leaves the employ of BioLine. Executive shall notify any new employer of Executive’s rights and obligations under this Agreement.
|
15.
|
Executive acknowledges that any violation or threatened violation of this Agreement may cause irreparable injury to BioLine, entitling BioLine to seek injunctive relief in addition to all other legal remedies.
|
16.
|
Executive recognizes and agrees that: (i) this Agreement is necessary and essential to protect the business of BioLine and to realize and derive all the benefits, rights and expectations of conducting BioLine’s business; (ii) the area and duration of the protective covenants contained herein are in all things reasonable; and (iii) good and valuable consideration exists under the Employment Agreement, for Executive’s agreement to be bound by the provisions of this Agreement.
|
17.
|
Section 11 (General) of the Employment Agreement shall apply to this Agreement,
mutatis mutandis
.
|
18.
|
EXECUTIVE ACKNOWLEDGES THAT HE/SHE HAS READ THIS AGREEMENT CAREFULLY, UNDERSTANDS ITS TERMS, AND HAS BEEN GIVEN THE OPPORTUNITY TO DISCUSS IT WITH INDEPENDENT LEGAL COUNSEL.
|
______________________
BioLine
|
______________________
Employee
|
______________________
BioLine
|
______________________
Employee
|
Sincerely,
/s/Yigal Arnon & Co.
|
Tel-Aviv, Israel
February 29, 2012
|
/s/ Kesselman & Kesselman
Certified Public Accountants (Isr.)
A member firm of PricewaterhouseCoopers International Limited
|