Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1):_____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7):_____

For Immediate Release

BioLineRx Reports First Quarter 2021 Financial Results

and Provides Corporate Update

- Phase 3 GENESIS study in stem-cell mobilization (SCM) demonstrated highly

statistically significant positive results across all primary and secondary endpoints -

- ~90% of patients in treatment arm underwent transplantation following only one

dose of Motixafortide and only one apheresis session; potentially positions

Motixafortide + G-CSF to become new standard of care in this indication  -

- Company proceeding with activities in support of NDA submission

targeted for H1 2022 -

- Management to hold conference call today, May 26, at 10:00 am EST -

Tel Aviv, Israel, May 26, 2021 -- BioLineRx Ltd. (NASDAQ: BLRX) (TASE: BLRX), a late clinical-stage biopharmaceutical company focused on oncology, today reports its financial results for the quarter ended March 31, 2021 and provides a corporate update.

Significant events and achievements during the first quarter 2021 and subsequent period:

“Subsequent to the end of the first quarter, we were extremely excited to announce positive topline results from our GENESIS Phase 3 trial of Motixafortide in stem-cell mobilization for autologous bone marrow transplantation in multiple myeloma patients,” stated Philip Serlin, Chief Executive Officer of BioLineRx. “The results demonstrated, with a high degree of statistical significance, a meaningful clinical benefit from adding Motixafortide to the current standard of care, G-CSF, for the mobilization of the targeted number of stem cells required for transplantation. While this was not a head-to-head study, our results compare very favorably to the registrational study of plerixafor.

“Importantly, almost 90% of patients in the treatment cohort underwent transplantation after only one administration of Motixafortide and in only one apheresis session, compared to 10.8% for G-CSF alone. We believe this positions Motixafortide to become the new standard of care in this indication, with a clear clinical benefit of ‘one dose, one apheresis, 90% mobilization success rate.’ We are working diligently to submit a New Drug Application to the FDA in the first half of next year. If approved, this would be transformative for BioLineRx, and a huge milestone in the Company’s history.

“Regarding our PDAC program, the compelling liver metastases data that we recently presented at AACR further strengthen an already robust case for continued development in this very challenging indication. We continue to engage in discussions with potential partners regarding future development.

“To support these and other initiatives, including continued advancement of our second clinical candidate, the anti-cancer vaccine AGI-134, we raised $34.5 million in January that we believe will finance the Company through multiple potentially value-creating milestones,” concluded Mr. Serlin.

Upcoming Significant Expected Milestones:

 

Financial Results for the Quarter Ended March 31, 2021

Research and development expenses for the quarter ended March 31, 2021 were $4.3 million, a decrease of $1.1 million, or 21.1%, compared to $5.4 million for the quarter ended March 31, 2020. The decrease resulted primarily from lower expenses associated with the Motixafortide COMBAT clinical trial, as well as lower expenses associated with the AGI-134 study.

Sales and marketing expenses for the quarter ended March 31, 2021 were $0.2 million, similar to sales and marketing expenses for the quarter ended March 31, 2020.

General and administrative expenses for the quarter ended March 31, 2021 were $1.0 million, a decrease of $0.2 million, or 18.2% compared to $1.2 million for the quarter ended March 31, 2020. The decrease resulted primarily from a decrease in share-based compensation.

The Company's operating loss for the quarter ended March 31, 2021 amounted to $5.5 million, compared to an operating loss of $6.8 million for the quarter ended March 31, 2020.

Non-operating expenses amounted to $4.6 million for the quarter ended March 31, 2021, compared to non-operating income of $0.5 million for the quarter ended March 31, 2020. Non-operating income (expenses) for both periods primarily relate to fair-value adjustments of warrant liabilities on the Company’s balance sheet.

Net financial expenses amounted to $0.2 million for the quarter ended March 31, 2021, compared to net financial expenses of $0.3 million for the quarter ended March 31, 2020. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on bank deposits.

The Company's net loss for the quarter ended March 31, 2021 amounted to $10.2 million, compared with a net loss of $6.6 million for the quarter ended March 31, 2020.

The Company held $58.1 million in cash, cash equivalents and short-term bank deposits as of March 31, 2021.

Net cash used in operating activities was $6.2 million for the quarter ended March 31, 2021, compared with net cash used in operating activities of $6.7 million for the quarter ended March 31, 2020. The $0.5 million decrease in net cash used in operating activities between the two periods was primarily the result of a decrease in research and development expenses.

Net cash used in investing activities was $36.3 million for the quarter ended March 31, 2021, compared to net cash provided by investing activities of $6.2 million for the quarter ended March 31, 2020. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.

Net cash provided by financing activities was $41.9 million for the quarter ended March 31, 2021, compared to net cash provided by financing activities of $0.4 million for the quarter ended March 31, 2020. The cash flows in 2021 primarily reflect the underwritten public offering of the Company’s ADSs in January 2021, warrant exercises and net proceeds from an ATM facility, offset by repayments of a loan from Kreos Capital. The cash flows in 2020 primarily reflect the net proceeds from an ATM facility, offset by repayments of a loan from Kreos Capital.

Conference Call and Webcast Information

BioLineRx will hold a conference call today, Wednesday, May 26, 2021 at 10:00 a.m. EDT. To access the conference call, please dial +1-866-744-5399 from the US or +972-3-918-0610 internationally. The call will also be available via webcast and can be accessed through the Investor Relations page of BioLineRx’s website. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.

A replay of the conference call will be available approximately two hours after completion of the live conference call on the Investor Relations page of BioLineRx’s website. A dial-in replay of the call will be available until May 28, 2021; please dial +1-888-295-2634 from the US or +972-3-925-5904 internationally.

(Tables follow)

About BioLineRx

BioLineRx Ltd. (NASDAQ/TASE: BLRX) is a late clinical-stage biopharmaceutical company focused on oncology. The Company’s business model is to in-license novel compounds, develop them through clinical stages, and then partner with pharmaceutical companies for further clinical development and/or commercialization.

The Company’s lead program, Motixafortide (BL-8040), is a cancer therapy platform that was successfully evaluated in a Phase 3 study in stem-cell mobilization for autologous bone-marrow transplantation. Motixafortide was also successfully evaluated in a Phase 2a study for the treatment of pancreatic cancer in combination with KEYTRUDA^® and chemotherapy under a clinical trial collaboration agreement with MSD (BioLineRx owns all rights to Motixafortide), and is currently being studied in combination with LIBTAYO^® and chemotherapy as a first-line PDAC therapy.

BioLineRx is also developing a second oncology program, AGI-134, an immunotherapy treatment for multiple solid tumors that is currently being investigated in a Phase 1/2a study.

For additional information on BioLineRx, please visit the Company’s website at www.biolinerx.com, where you can review the Company’s SEC filings, press releases, announcements and events.

Various statements in this release concerning BioLineRx's future expectations constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include words such as "may," "expects," "anticipates," "believes," and "intends," and describe opinions about future events. These forward-looking statements involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of BioLineRx to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause BioLineRx's actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: the initiation, timing, progress and results of BioLineRx's preclinical studies, clinical trials and other therapeutic candidate development efforts; BioLineRx's ability to advance its therapeutic candidates into clinical trials or to successfully complete its preclinical studies or clinical trials; BioLineRx's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings and approvals; the clinical development, commercialization and market acceptance of BioLineRx's therapeutic candidates; BioLineRx's ability to establish and maintain corporate collaborations; BioLineRx's ability to integrate new therapeutic candidates and new personnel; the interpretation of the properties and characteristics of BioLineRx's therapeutic candidates and of the results obtained with its therapeutic candidates in preclinical studies or clinical trials; the implementation of BioLineRx's business model and strategic plans for its business and therapeutic candidates; the scope of protection BioLineRx is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; estimates of BioLineRx's expenses, future revenues, capital requirements and its needs for additional financing; risks related to changes in healthcare laws, rules and regulations in the United States or elsewhere; competitive companies, technologies and BioLineRx's industry; risks related to the COVID-19 pandemic; and statements as to the impact of the political and security situation in Israel on BioLineRx's business. These and other factors are more fully discussed in the "Risk Factors" section of BioLineRx's most recent annual report on Form 20-F filed with the Securities and Exchange Commission on February 23, 2021. In addition, any forward-looking statements represent BioLineRx's views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. BioLineRx does not assume any obligation to update any forward-looking statements unless required by law.

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(UNAUDITED)

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS

(UNAUDITED)

BioLineRx Ltd.

APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS

(UNAUDITED)

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

AS OF MARCH 31, 2021

 

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

AS OF MARCH 31, 2021

TABLE OF CONTENTS

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioLineRx Ltd.

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioLineRx Ltd.

APPENDIX TO CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTS

(UNAUDITED)

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

NOTE 1 – GENERAL INFORMATION

BioLineRx Ltd. (“BioLineRx”), headquartered in Modi’in, Israel, was incorporated and commenced operations in April 2003. BioLineRx and its subsidiaries (collectively, the “Company”) are engaged in the development of therapeutics, primarily in clinical stages, with a focus on the field of oncology.

The Company’s American Depositary Shares (“ADSs”) are traded on the NASDAQ Capital Market, and its ordinary shares are traded on the Tel Aviv Stock Exchange (“TASE”).

In March 2017, the Company acquired Agalimmune Ltd. (“Agalimmune”), a privately held company incorporated in the United Kingdom, with a focus on the field of immuno-oncology.

Although the Company has succeeded in generating significant revenues from a number of out-licensing transactions in the past, it cannot determine with reasonable certainty if and when it will become profitable on a current basis. Management believes that the Company’s current cash and other resources will be sufficient to fund its projected cash requirements into the first half of 2024. However, in the event that the Company does not begin to generate sustainable cash flows from its operating activities in the future, the Company will need to carry out significant cost reductions or raise additional funding.

The condensed consolidated interim financial statements of the Company as of March 31, 2021, and for the three months then ended, were approved by the Board of Directors on May 20, 2021, and signed on its behalf by the Chairman of the Board, the Chief Executive Officer and the Chief Financial Officer.

NOTE 2 – BASIS OF PREPARATION

 

The Company’s condensed consolidated interim financial statements as of March 31, 2021 and for the three months then ended (the “interim financial statements”) have been prepared in accordance with International Accounting Standard No. 34, “Interim Financial Reporting” (“IAS 34”). These interim financial statements, which are unaudited, do not include all disclosures necessary for a fair statement of financial position, results of operations, and cash flows in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The condensed consolidated interim financial statements should be read in conjunction with the Company’s annual financial statements as of December 31, 2020 and for the year then ended and their accompanying notes, which have been prepared in accordance with IFRS. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.

The preparation of financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity and expenses, as well as the related disclosures of contingent assets and liabilities, in the process of applying the Company’s accounting policies. These inputs also consider, among other things, the implications of the COVID-19 pandemic on the Company’s activities, and the resultant effects on critical and significant accounting estimates, most significantly in relation to the value of intangible assets. The COVID-19 pandemic has spread to many countries throughout the world, including to the United States, Europe and Israel, where the Company currently manufactures its therapeutic candidates and conducts its clinical trials. The Company has previously experienced some recruitment delays from the extended impact of COVID-19 on its clinical trials; however, at present, the Company does not believe these delays will significantly impact its clinical development plans. Future developments related to COVID-19 are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as its overall economic impact, and more specifically its effects on the financial markets. All estimates made by the Company related to the impact of COVID-19 in its financial statements may change in future periods. Actual results could differ from those estimates.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

The accounting policies and calculation methods applied in the preparation of these interim financial statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2020 and for the year then ended.

NOTE 4 – AT-THE-MARKET (“ATM”) SALES AGREEMENT WITH HCW

In September 2020, the Company entered into an ATM sales agreement with H.C. Wainwright & Co., LLC (“HCW”), pursuant to which the Company is entitled, at its sole discretion, to offer and sell through HCW, acting as sales agent, ADSs having an aggregate offering price of up to $25.0 million throughout the period during which the ATM facility remains in effect. The Company agreed to pay HCW a commission of 3.0% of the gross proceeds from the sale of ADSs under the facility.

During the three months period ended March 31, 2021, the Company issued a total of 482,983 ADSs for total gross proceeds of $1.4 million. Subsequent to March 31, 2021 and through the date of this report, the Company issued a total of 2,504,633 ADSs for total gross proceeds of $12.0 million. From the effective date of the agreement through the date of this report, 5,623,349 ADSs were sold under the program for total gross proceeds of approximately $19.4 million, leaving an available balance under the facility of approximately $5.6 million as of the date of this report.

NOTE 5 – UNDERWRITTEN PUBLIC OFFERING

In January 2021, the Company completed an underwritten public offering of 14,375,000 of its ADSs at a public offering price of $2.40 per ADS. The offering raised total gross proceeds of $34.5 million, with net proceeds of $31.4 million after deducting fees and expenses. In addition, warrants to purchase 718,750 ADSs were granted to the underwriters. These warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $3.00 per ADS.

The fair value of the warrants on the issuance date was approximately $1.0 million, which was recorded as issuance costs, and computed using the Black and Scholes option pricing model, based upon the then current price of an ADS, a risk-free interest rate of approximately 0.45% and an average standard deviation of approximately 73.8%.

NOTE 6 – SHAREHOLDERS’ EQUITY

 

As of December 31, 2020 and March 31, 2021, share capital is composed of ordinary shares, as follows:

 

OPERATING AND FINANCIAL REVIEW

 

You should read the following discussion of our operating and financial condition and prospects in conjunction with the financial statements and the notes thereto included elsewhere in this 6-K, as well as in our Annual Report on Form 20-F filed on February 23, 2021 (the “Annual Report”).

 

Forward Looking Statements

 

The following discussion contains “forward-looking statements,” including statements regarding expectations, beliefs, intentions or strategies for the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions, and are subject to risks and uncertainties. You should not put undue reliance on any forward-looking statements. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those listed below as well as those discussed in the Annual Report (particularly those in “Item 3. Key Information – Risk Factors”). Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

 

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Factors

 

There are no material changes to the risk factors previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2020.

 

Overview

 

General

 

We are a late clinical-stage biopharmaceutical development company with a strategic focus on oncology. Our current development and commercialization pipeline consists of two clinical-stage therapeutic candidates – motixafortide (BL-8040), a novel peptide for the treatment of stem-cell mobilization, solid tumors and AML, and AGI-134, an immuno-oncology agent in development for solid tumors. In addition, we have an off-strategy, legacy therapeutic product called BL-5010 for the treatment of skin lesions. We have generated our pipeline by systematically identifying, rigorously validating and in-licensing therapeutic candidates that we believe exhibit a high probability of therapeutic and commercial success. To date, except for BL-5010, none of our therapeutic candidates have been approved for marketing or sold commercially. 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.

 

Main Therapeutic Candidates

 

The following is a description of our main programs:

 

 

Stem cell mobilization

 

 

 

 

 

Solid tumors

 

 

 

 

 

 AML

 

 

 

COVID-19

 

 

 Other matters

 

 

 

 

 

Funding

 

We have funded our operations primarily through the sale of equity securities (both in public and private offerings), payments received under our strategic licensing and collaboration arrangements, interest earned on investments and funding received from the Israel Innovation Authority, or IIA. We expect to continue to fund our operations over the next several years through our existing cash resources, potential future upfront, milestone, royalty or other payments that we may receive from our existing out-licensing agreements, potential future upfront or milestone payments that we may receive from out-licensing transactions for our other therapeutic candidates, interest earned on our investments and additional capital to be raised through public or private equity offerings or debt financings. As of March 31, 2021, we held $58.1 million of cash, cash equivalents and short-term bank deposits.

 

Revenues

 

Our revenues to date have been generated primarily from milestone payments under previously existing out-licensing agreements.

 

We expect our revenues, if any, for the next several years to be derived primarily from future payments under our current out-licensing agreement with Perrigo and other potential collaboration arrangements, including future royalties on product sales.

 

Research and Development

 

Our research and development expenses consist primarily of salaries and related personnel expenses, fees paid to external service providers, up-front and milestone payments under our license agreements, patent-related legal fees, costs of preclinical studies and clinical trials, drug and laboratory supplies and costs for facilities and equipment. We primarily use external service providers to manufacture our product candidates for clinical trials and for the majority of our preclinical and clinical development work. We charge all research and development expenses to operations as they are incurred. We expect our research and development expense to remain our primary expense in the near future as we continue to develop our therapeutic candidates.

 

The following table identifies our current major research and development projects:

 

*These studies are investigator-initiated studies; therefore, the timelines are ultimately controlled by the independent investigators and are subject to change.

 

We expect that a large percentage of our research and development expense in the future will be incurred in support of our current and future preclinical and clinical development projects. Due to the inherently unpredictable nature of preclinical and clinical development processes, we are unable to estimate with any certainty the costs we will incur in the continued development of the therapeutic candidates in our pipeline for potential commercialization. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We expect to continue to test our product candidates in preclinical studies for toxicology, safety and efficacy, and to conduct additional clinical trials for each product candidate. If we are not able to enter into an out-licensing arrangement with respect to any therapeutic candidate prior to the commencement of later stage clinical trials, we may fund the trials for the therapeutic candidate ourselves.

 

While we are currently focused on advancing each of our product development projects, our future research and development expenses will depend on the clinical success of each therapeutic candidate, as well as ongoing assessments of each therapeutic candidate’s commercial potential. In addition, we cannot forecast with any degree of certainty which therapeutic candidates may be subject to future out-licensing arrangements, when such out-licensing arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

 

As we obtain results from clinical trials, we may elect to discontinue or delay clinical trials for certain therapeutic candidates or projects in order to focus our resources on more promising therapeutic candidates or projects. Completion of clinical trials by us or our licensees may take several years or more, but the length of time generally varies according to the type, complexity, novelty and intended use of a therapeutic candidate.

 

The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others:

 

 

 

 

 

 

 

 

We expect our research and development expenses to remain our most significant cost as we continue the advancement of our clinical trials and preclinical product development projects and place significant emphasis on in-licensing new product candidates. The lengthy process of completing clinical trials and seeking regulatory approval for our product candidates requires expenditure of substantial resources. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Due to the factors set forth above, we are not able to estimate with any certainty when we would recognize any net cash inflows from our projects.

 

Sales and Marketing Expenses

 

Sales and marketing expenses consist primarily of compensation for employees in business development and marketing functions. Other significant sales and marketing costs include costs for marketing and communication materials, professional fees for outside market research and consulting, legal services related to partnering transactions and travel costs.

 

General and Administrative Expenses

 

General and administrative expenses consist primarily of compensation for employees in executive and operational functions, including accounting, finance, legal, investor relations, information technology and human resources. Other significant general and administration costs include facilities costs, professional fees for outside accounting and legal services, travel costs, insurance premiums and depreciation.

 

Non-Operating Expense and Income

 

Non-operating expense and income includes fair-value adjustments of derivative liabilities on account of the warrants issued in equity financings we carried out in July 2017, February 2019, May 2020 and June 2020. These fair-value adjustments are highly influenced by our share price at each period end (revaluation date). Non-operating expense and income also includes issuance expenses of the ATM sales agreement between the Company and H.C. Wainwright & Co., LLC, or Wainwright, entered into in September 2020, pursuant to which the Company is entitled, to offer and sell ADSs having an aggregate offering price of up to $25.0 million, or the ATM Facility, and the pro-rata share of issuance expenses from the placements related to the warrants. Sales-based royalties and other revenue from the license agreement with Perrigo have also been included as part of non-operating income, as the out-licensed product is not an integral part of our strategy and the amounts are not material.

 

Financial Expense and Income

 

Financial expense and income consist of interest earned on our cash, cash equivalents and short-term bank deposits; interest expense related to our loan from Kreos Capital; bank fees and other transactional costs. In addition, it may also include gains/losses on foreign exchange hedging transactions, which we carry out from time to time to protect against a portion of our NIS-denominated expenses (primarily compensation) in relation to the dollar.

 

Critical Accounting Policies and Estimates

 

We describe our significant accounting policies more fully in Note 2 to our consolidated financial statements for the year ended December 31, 2020. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

 

The discussion and analysis of our financial condition and results of operations is based on our financial statements, which we prepare in accordance with IFRS. The preparation of these financial statements requires us to make estimates using assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates, including those described in greater detail below. We base our estimates on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which impact the carrying value of our assets and liabilities that are not readily apparent from other sources. Actual results will differ from these estimates and such differences may be significant.

 

Results of Operations

 

Revenues

 

We did not record any revenues during each of the three-month periods ended March 31, 2021 and 2020.

 

Cost of revenues

 

We did not record any cost of revenues during each of the three-month periods ended March 31, 2021 and 2020.

 

Operating Results Comparison between Periods

 

Revenues and cost of revenues

 

See discussion under “Results of Operations.”

 

Research and development expenses

 

Research and development expenses for the three months ended March 31, 2021 were $4.3 million, a decrease of $1.1 million, or 21.1%, compared to $5.4 million for the three months ended March 31, 2020. The decrease resulted primarily from lower expenses associated with the motixafortide COMBAT clinical trial and lower expenses associated with the AGI-134 study.

 

Sales and marketing expenses

 

Sales and marketing expenses for the three months ended March 31, 2021 were $0.2 million, similar to the comparable period in 2020.

 

General and administrative expenses

 

General and administrative expenses for the three months ended March 31, 2021 were $1.0 million, a decrease of $0.2 million, or 18.2%, compared to $1.2 million for the three months ended March 31, 2020. The decrease resulted primarily from a decrease in share-based compensation.

 

Non-operating income (expenses), net

 

We recognized net non-operating expenses of $4.6 million for the three months ended March 31, 2021, compared to net non-operating income of $0.5 million for the three months ended March 31, 2020. Non-operating income (expenses) for both periods primarily relate to fair-value adjustments of warrant liabilities on our balance sheet.

 

Financial income (expenses), net

 

We recognized net financial expenses of $0.2 million for the three months ended March 31, 2021 compared to net financial expenses of $0.3 million for the three months ended March 31, 2020. Net financial expenses for both periods primarily relate to interest paid on loans, offset by investment income earned on our bank deposits.

 

Liquidity and Capital Resources

 

Since our inception, we have funded our operations primarily through public and private offerings of our equity securities, payments received under our strategic licensing and collaboration arrangements, interest earned on investments and funding from the IIA. As of March 31, 2021, we held $58.1 million of cash, cash equivalents and short-term bank deposits. We have invested substantially all of our available cash funds in short-term bank deposits.

 

In January 2021, we sold 14,375,000 ADSs in a public offering at $2.40 per ADS, resulting in gross proceeds of $34.5 million. In connection with the offering, we paid an aggregate of $3.1 million in placement agent fees and expenses, and issued placement agent warrants to purchase 718,750 ADS. The placement agent warrants are immediately exercisable at a price of $3.00 per ADS, and expire five years from the date of offering.

 

Pursuant to our ATM Facility, during the three months ended March 31, 2021, we sold 482,983 ADSs, resulting in gross proceeds to us of $1.4 million. Subsequent to March 31, 2021 and through the date of this report, we issued a total of 2,504,633 ADSs under the facility for total gross proceeds of $12.0 million. As of the date of this report, there is an available balance under the facility of $5.6 million.

 

Net cash used in operating activities was $6.2 million for the three months ended March 31, 2021, compared with net cash used in operating activities of $6.7 million for the three months ended March 31, 2020. The $0.5 million decrease in net cash used in operating activities between the two periods was primarily the result of a decrease in research and development expenses.

 

Net cash used in investing activities was $36.3 million for the three months ended March 31, 2021, compared to net cash provided by investing activities of $6.2 million for the three months ended March 31, 2020. The changes in cash flows from investing activities relate primarily to investments in, and maturities of, short-term bank deposits.

 

Net cash provided by financing activities was $41.9 million for the three months ended March 31, 2021, compared to net cash provided by financing activities of $0.4 million for the three months ended March 31, 2020. The cash flows in 2021 primarily reflect the underwritten public offering of our ADSs in January 2021, warrant exercises and net proceeds from the ATM Facility, offset by repayments of the loan from Kreos Capital. The cash flows in 2020 primarily reflect the net proceeds from a previous ATM facility, offset by repayments of the loan from Kreos Capital.

 

Developing drugs, conducting clinical trials and commercializing products is expensive and we will need to raise substantial additional funds to achieve our strategic objectives. Although we believe our existing cash and other resources will be sufficient to fund our current projected cash requirements into the first half of 2024, we will require additional financing in the future to fund our operations. Additional financing may not be available on acceptable terms, if at all. Our future capital requirements will depend on many factors, including:

 

 

 

 

 

 

 

 

 

Until we can generate significant continuing revenues, we expect to satisfy our future cash needs through payments received under our collaborations, debt or equity financings, or by out-licensing other product candidates. We cannot be certain that additional funding will be available to us on acceptable terms, or at all.

 

If funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or our commercialization efforts.

 

Off-Balance Sheet Arrangements

 

Since inception, we have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

 

Share and per-share information in ADSs

 

Presented below, for the convenience of the reader, is share and per-share information in ADSs (each ADS represents 15 ordinary shares).