RedHill Biopharma Ltd F-3, filed Jul 29, 2021
RedHill Biopharma Ltd. (RDHL)
F-3
2021-07-29
View Original
Added on
October 16, 2026
As filed with the Securities and Exchange Commission on July 29, 2021
Registration No.:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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REDHILL BIOPHARMA LTD.
(Exact name of registrant as specified in its charter)
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Israel
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Not Applicable
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(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification Number)
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21 Ha'arba'a Street
Tel Aviv 6473921
Israel
+972 (3) 541-3131
(Address and telephone number of registrant’s principal executive offices)
RedHill Biopharma Inc.
8045 Arco Corporate Drive, Suite 200
Raleigh, NC 27617
(984) 444-7010
8045 Arco Corporate Drive, Suite 200
Raleigh, NC 27617
(984) 444-7010
(Name, address, and telephone number of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
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Perry Wildes
Gross & Co.
One Azrieli Center
Tel Aviv 6702100, Israel
+972 (3) 607-4444
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Rick A. Werner
Haynes and Boone, LLP
30 Rockefeller Plaza
New York, New York 10112 (212) 659-7300 |
Approximate date of commencement of proposed sale to the public: From time to time after this
Registration Statement becomes effective as determined by market conditions
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act . ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
CALCULATION OF REGISTRATION FEE
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Title of each class of
securities to be registered |
Amount to be registered (1)
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Proposed maximum offering price
per unit |
Proposed maximum aggregate offering price (3)
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Amount of registration fee
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Ordinary Shares, par value NIS 0.01 per share (2)
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Warrants
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Subscription Rights
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Units
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Total
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$
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200,000,000
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(4)
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$
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200,000,000
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$
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13,066
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(4)
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__________________________
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(1)
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Such indeterminate number or amount of registrant’s ordinary shares (Ordinary Shares), American Depositary Shares (ADSs), warrants, subscription rights and units as may, from time to time, be issued at
indeterminate prices. In no event will the aggregate maximum offering price of all securities issued pursuant to this registration statement on behalf of the registrant exceed $200,000,000. Pursuant to Rule 416 of the Securities Act of
1933, as amended (the “Securities Act”), this Registration Statement also includes additional Ordinary Shares issuable upon stock splits, stock dividends or similar transactions.
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(2)
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American Depositary Shares, which may be evidenced by American Depositary Receipts, issuable upon deposit of the Ordinary Shares registered hereby
have been registered pursuant to a separate registration statement on Form F-6 (File No. 333-185302). Each American Depositary Share represents ten (10) of our Ordinary Shares.
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(3)
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Pursuant to Rule 457(o) under the Securities Act, which permits the registration fee to be calculated on the basis of the maximum offering price of all the securities listed, and Instruction
IIC of Form F-3, the table does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit or proposed maximum aggregate offering price.
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(4)
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Pursuant to Rule 415(a)(6) under the Securities Act, the securities registered hereunder include unsold securities previously registered by the registrant pursuant to the registration statement on Form F-3,
Registration No. 333-226278 (the “Prior Shelf Registration Statement”), which was declared effective on July 31, 2018, that have not yet been sold. The Prior Registration Statement registered the offer and sale of the registrant’s
Ordinary Shares, ADSs, warrants, subscription rights and/or units having an aggregate initial offering price not to exceed $175,000,000, $80,242,083 of which securities remain unsold by the registrant as of the date of filing of this
registration statement. To the extent that, after the filing date hereof and prior to the effectiveness of this registration statement, the registrant sells any unsold securities pursuant to the Prior Registration Statement, the
registrant will identify in a pre-effective amendment to this registration statement the updated amount of unsold securities from the Prior Registration Statement to be included in this registration statement pursuant to Rule 415(a)(6).
Pursuant to Rule 415(a)(6), the offering of the unsold securities under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement. The filing fee of $9,356 relating to the
unsold securities under the Prior Registration Statement, which was paid under the Prior Registration Statement, will continue to be applied to the unsold securities registered pursuant to this registration statement.
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The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains:
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A base prospectus, which covers the offering, issuance and sales by us of up to $200,000,000 in the aggregate of the securities identified above from time to time in one or more offerings; and
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A sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of up to $100,000,000 of the American Depositary Shares (“ADSs”) each representing 10 of our ordinary shares
(“Ordinary Shares”) that may be issued and sold from time to time under a sales agreement (the “Sales Agreement”), with SVB Leerink LLC (“SVB Leerink”) and Cantor Fitzgerald & Co. (“Cantor”).
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The base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the
base prospectus. The Sales Agreement prospectus immediately follows the base prospectus. The $100,000,000 of ADSs that may be offered, issued and sold under the Sales Agreement prospectus is included in the $200,000,000 of securities that may be
offered, issued and sold by us under the base prospectus. Upon termination of the Sales Agreement, any portion of the $100,000,000 included in the Sales Agreement prospectus that is not sold pursuant to the Sales Agreement will be available for sale
in other offerings pursuant to the base prospectus, and if no shares are sold under the Sales Agreement, the full $100,000,000 of securities may be sold in other offerings pursuant to the base prospectus.
The information contained in this preliminary prospectus is not complete and may be changed. We
may not
sell these securities until the registration statement filed with the Securities and Exchange
Commission is
effective. This prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion, dated July 29, 2021
PROSPECTUS
$200,000,000 of
American Depositary Shares representing Ordinary Shares,
Ordinary Shares,
Warrants to Purchase American Depositary Shares,
Subscription Rights and/or Units
Offered by the Company
REDHILL BIOPHARMA LTD.
We may offer to the public from time to time in one or more series or issuances American Depositary Shares ("ADSs"), ordinary shares (“Ordinary Shares”), warrants, subscription rights and/or units
consisting of two or more of these classes or series of securities. Each ADS represents 10 of our Ordinary Shares.
We refer to the ADSs, Ordinary Shares, warrants, subscription rights and units collectively as “securities” in this prospectus.
Each time we sell securities pursuant to this prospectus, we will provide a supplement to this prospectus that contains specific information about the offeror, the offering and the
specific terms of the securities offered. This prospectus may not be used to consummate a sale of securities by us unless accompanied by the applicable prospectus supplement. You should read this prospectus and the applicable prospectus supplement
carefully before you invest in our securities.
We may, from time to time, offer to sell the securities, through public or private transactions, directly or through underwriters, agents or dealers, on or off the Nasdaq Global
Market, as applicable, at prevailing market prices or at privately negotiated prices. If any underwriters, agents or dealers are involved in the sale of any of these securities, the applicable prospectus supplement will set forth the names of the
underwriter, agent or dealer and any applicable fees, commissions or discounts.
The ADSs are traded on the Nasdaq Global Market under the symbol “RDHL.” The last reported sale price for the ADSs on July 28, 2021, as quoted on the Nasdaq Global Market was $6.61 per ADS.
Investing in these securities involves a high degree of risk. Please carefully consider the risks discussed in this prospectus under “Risk Factors” beginning on page 10 and the
“Risk Factors” in “Item 3: Key Information - Risk Factors” of our most recent Annual Report on Form 20-F incorporated by reference in this prospectus and in any applicable prospectus supplement for a discussion of the factors you should consider
carefully before deciding to purchase these securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities being offered by this prospectus
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is ______, 2021.
TABLE OF CONTENTS
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This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process. Under this process,
we may offer and sell our securities under this prospectus.
Under this shelf process, we may sell the securities described in this prospectus in one or more offerings up to a total price to the public of $200,000,000. The offer and sale of
securities under this prospectus may be made from time to time, in one or more offerings, in any manner described under the section in this prospectus entitled “Plan of Distribution.”
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus, and may also contain information about any material federal income tax considerations relating
to the securities covered by the prospectus supplement. You should read both this prospectus and any prospectus supplement together with additional information under the headings “Where You Can Find More Information” and “Incorporation of Certain
Documents by Reference.”
This summary may not contain all of the information that may be important to you. You should read this entire prospectus, including the financial statements and related notes and
other financial data incorporated by reference in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause or contribute to such differences include those discussed in “Risk Factors” and “Forward-Looking Statements.”
Overview
We are a specialty biopharmaceutical company, primarily focused on gastrointestinal (“GI”) and infectious diseases. Our primary goal is to become a leading specialty
biopharmaceutical company through our commercial presence in the U.S. that supports current commercialization of products approved for marketing and potential future commercialization of our therapeutic candidates, if approved.
We are currently focused primarily on the commercialization in the U.S. of the GI-related products, Movantik® (naloxegol), Talicia® (omeprazole, amoxicillin, and rifabutin)
and Aemcolo® (rifamycin).
In addition, we continue to develop our pipeline of clinical-stage therapeutic candidates, including, among others, the study of our therapeutic candidates, opaganib (ABC294640) and RHB-107 (upamostat), as
potential treatments for COVID-19. We look for opportunities to leverage our commercial presence and capabilities in the U.S. to support the potential future launch of our therapeutic candidates currently under development, if approved by
the U.S. Food and Drug Administration (“FDA”), or any FDA-approved products that we may acquire or license in the future.
Our therapeutic candidates are designed to exhibit greater efficacy and/or provide improvements over existing drugs in various ways, including by one or more of the following: by improving their
safety profile, reducing side effects, lowering the number of administrations, using a more convenient administration form or providing a cost advantage. Our current pipeline consists of six therapeutic candidates, most of which are in late-stage
clinical development.
We generate our pipeline of therapeutic candidates by identifying, validating and in-licensing or acquiring products that are consistent with our product and corporate strategy and that have the
potential to exhibit a favorable probability of therapeutic and commercial success. We have one product that we primarily developed internally which has been approved for marketing and, to date, none of our therapeutic candidates has generated
meaningful revenues. We plan to commercialize our therapeutic candidates, upon approval, if any, through licensing and other commercialization arrangements outside the U.S. with pharmaceutical companies on a global and territorial basis or, in the
case of commercialization in the U.S., independently with our dedicated commercial operations or in potential partnership with other commercial-stage companies. We also evaluate, on a case-by-case basis, co-development, co-promotion, licensing and
similar arrangements.
U.S. and global COVID-19 studies with opaganib
Opaganib, a new chemical entity, is a proprietary, first-in-class, orally-administered, sphingosine kinase-2 (SK2) selective inhibitor with observed anticancer, anti-inflammatory, and antiviral activities,
targeting multiple oncology, viral, inflammatory, and gastrointestinal indications.
In July 2020, we initiated a global Phase 2/3 clinical trial evaluating opaganib in hospitalized patients with severe COVID-19 pneumonia. This global multi-center, randomized, double-blind, parallel-arm,
placebo-controlled trial enrolled a total of 475 patients requiring hospitalization and treatment with supplemental oxygen. The study has been approved in ten countries. On July19, 2021, we announced that we had completed treatment and
follow-up of all 475 patients in the trial and that top-line results are expected in the coming weeks. The primary endpoint of the trial is the proportion of patients breathing room air without oxygen support by Day 14. Additional important
outcome measures, such as time to discharge from hospital, improvement according to the World Health Organization Ordinal Scale for Clinical Improvement and incidence of intubation and mortality, will also be captured in the follow-up
period of up to six weeks. The trial has received four independent DSMB recommendations to continue following unblinded safety reviews and a futility review.
In December 2020, we announced that our randomized, double-blind, placebo-controlled U.S. Phase 2 trial with opaganib in patients hospitalized with COVID-19 pneumonia demonstrated preliminary
top-line positive safety and efficacy data. The trial, which was not powered for statistical significance, enrolled 40 patients requiring hospitalization and supplemental oxygen.
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In June 2021, we announced the presentation of the findings from the 40-patient U.S. phase 2 trial, including:
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• 50.0% of
patients treated with opaganib (n=22) reached room air by Day 14 compared to 22.2% in the placebo group (n=18). The benefit of reaching room air by Day 14 for patients on opaganib was maintained regardless of whether or not the patients
were also receiving dexamethasone and/or remdesivir.
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• 86.4% of patients treated with opaganib were discharged from hospital by Day 14 compared to 55.6% of patients treated with placebo.
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• Median time to discharge was 6 days for the opaganib group compared to 7.5 days for the placebo group.
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• 81.8% of opaganib patients achieved a 2-point improvement in the WHO Ordinal Scale compared to 55.6% of patients in the placebo group – achieved in a median time of 6 days versus 7.5
days, respectively.
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• No significant differences in safety-related measures between the two groups (with diarrhea being the main treatment-emergent difference in tolerability) were observed.
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Opaganib was originally developed by U.S.-based Apogee Biotechnology Corp. (“Apogee”) and completed multiple successful preclinical studies in oncology, inflammation, GI, and radioprotection
models, as well as a Phase 1 clinical trial in cancer patients with advanced solid tumors and an additional Phase 1 trial in multiple myeloma.
Opaganib received orphan drug designation from the FDA for the treatment of cholangiocarcinoma and is also being evaluated in a Phase 2a trial in advanced cholangiocarcinoma and in a Phase 2 trial
in prostate cancer.
Preclinical data have demonstrated both anti-inflammatory and antiviral activities of opaganib, demonstrating the potential to reduce inflammatory lung disorders, such as pneumonia, and mitigate
pulmonary fibrotic damage. Opaganib demonstrated potent antiviral activity against SARS-CoV-2, the virus that causes COVID-19, completely inhibiting viral replication in an in vitro model of human lung bronchial tissue. Additionally, preclinical in vivo studies have demonstrated that opaganib decreased fatality rates from influenza virus infection and ameliorated Pseudomonas aeruginosa-induced lung injury by reducing the levels of IL-6 and TNF-alpha in
bronchoalveolar lavage fluids.
In June 2021, we announced that preliminary results from a preclinical study with opaganib demonstrate potent inhibition of COVID-19 variants of concern by opaganib.
Working with the University of Louisville Center for Predictive Medicine, opaganib was studied in a 3D tissue model of human bronchial epithelial cells (EpiAirway™) to evaluate the in vitro efficacy of
opaganib in inhibiting the Beta (South African) and Gamma (Brazilian) SARS-CoV-2 variants. Preliminary results showed potent inhibition of both the Beta and Gamma variants by opaganib at non-cytotoxic doses. Based on opaganib’s unique host-targeted mechanism and the preliminary results of this study, we believe
opaganib is likely to also maintain its activity against emerging variants, including the Delta and Delta Plus variants.
Under a compassionate use program, seven COVID-19 patients (as classified by the WHO ordinal scale) were treated with opaganib in a leading hospital in Israel. Analysis of treatment outcomes from
the five patients included in the final published analysis suggested substantial benefit to patients treated with opaganib under compassionate use in both clinical outcomes and inflammatory markers as compared to a retrospective matched
case-control group from the same hospital. All patients in the opaganib-treated group were discharged from hospital on room air without requiring intubation and mechanical ventilation, whereas 33% of the matched case-control group required
intubation and mechanical ventilation. Median time to weaning from high-flow nasal cannula was reduced to 10 days in the opaganib-treated group, as compared to 15 days in the matched case-control group.
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The development of opaganib for indications non-related to COVID-19 has been supported by grants and contracts from U.S. federal and state government agencies awarded to Apogee, including from the U.S. National
Cancer Institute (NCI), Biomedical Advanced Research and Development Authority (BARDA), the U.S. Department of Defense and the FDA Office of Orphan Products Development. In September 2020, Apogee was awarded a grant from Pennsylvania’s COVID-19
Vaccines, Treatments and Therapies Program, which supports the rapid advancement of promising novel COVID-19 therapies.
In May 2021, we announced receipt of a Notice of Allowance for a U.S. patent application covering the use of opaganib for the treatment of COVID-19 with a term extending until at least 2041. We
also previously announced that we had signed collaborations with several U.S., European and Canadian suppliers, including with Cosmo Pharmaceuticals for large-scale ramp-up of opaganib manufacturing, further strengthening manufacturing capabilities
and capacity of opaganib.
In view of the completion of enrollment, treatment and follow up for our global Phase 2/3 clinical trial evaluating opaganib in hospitalized patients with severe COVID-19 pneumonia, we maintain
ongoing discussions with the FDA, the European Medicines Agency (EMA) and other regulators, on potential pathways to approval for opaganib with a focus on those countries currently most affected by COVID-19. The next steps will be guided by the
results of the global Phase 2/3 trial.
Discussions are also ongoing with potential partners who are interested in the rights to opaganib in various countries.
The regulatory path, including potential submissions of emergency use applications in those countries, is subject to the data generated by the ongoing Phase 2/3 trial, as well as the specific
requirements in each country. The strength of the safety and efficacy data generated from the opaganib studies will be key to regulatory applications. Additional studies to support the potential of such applications and the use or marketing of
opaganib are likely to be required. For example, the FDA has indicated we will need to complete additional studies to support applications in the U.S. Evaluations and discussions continue with the FDA, EMA and regulators in other countries.
Our Approved and Commercial Products in the U.S.
We have established the headquarters of our U.S. commercial operations in Raleigh, North Carolina. Our U.S. operations promote Movantik® for opioid-induced
constipation in adults, Talicia® for the treatment of H. pylori infection in adults and Aemcolo® for the treatment of travelers’ diarrhea in adults. We also expect our U.S.
operations to serve as the platform for potential launch of our proprietary, late-clinical stage therapeutic candidates in the U.S., if approved by the FDA, and potential in-licensed or acquired commercial-stage products in the U.S.
During 2020, we expanded our sales force from approximately 40 sales representatives to approximately 100 sales representatives. We commercially launched Talicia® in March 2020 and
initiated our commercialization activities for Movantik® in April 2020.
Movantik®
In April 2020, we acquired from AstraZeneca AB (“AstraZeneca”) worldwide rights (excluding Europe and Canada) to commercialize and develop Movantik® (naloxegol), pursuant to a license
agreement, dated February 23, 2020 (the “AstraZeneca License Agreement”), and in October 2020 we obtained the rights to commercialize and develop Movantik® in Israel. Movantik® is a proprietary once-daily oral peripherally
acting mu-opioid receptor antagonist (PAMORA) approved by the FDA for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment
who do not require frequent (e.g. weekly) opioid dosage escalation. We initiated our U.S. commercialization activities for Movantik® in April 2020.
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Movantik® received FDA approval on September 16, 2014, for the treatment of OIC in adult patients with chronic non-cancer pain. Its label was later updated to include patients with
chronic pain related to prior cancer or its treatment who do not require frequent (e.g. weekly) opioid dosage escalation. In the AstraZeneca License Agreement, we agreed to assume responsibility for completing any postmarketing requirements or
commitments that may be required to retain approval. Accordingly, we will be required to continue the postmarketing observational epidemiologic study to evaluate the major adverse cardiovascular events (MACE) of Movantik®.
In August 2020, we announced that we had replaced the 2015 Movantik® co-commercialization agreement with Daiichi Sankyo, Inc. (Daiichi Sankyo) (assigned
under the agreement with AstraZeneca), with a new royalty-bearing agreement. Under the terms of the new agreement, we bear all responsibilities and costs for commercializing Movantik® in the U.S. During the term of the new agreement,
we pay Daiichi Sankyo a mid-teen royalty rate on net sales of Movantik® in the U.S., in addition to three annual lump sum payments, starting in the fourth quarter of 2021 and ending in 2023.
In July 2020, we amended the AstraZeneca License Agreement, whereby the parties agreed to postpone the non-contingent payment of $15.0 million by us to December 2021 and to increase the amount due
by $0.5 million.
In July 2021, we announced that one of America’s largest payors, serving many Blue Cross and Blue Shield Plans and more than 30 million members, had added Movantik® as a preferred brand with no restrictions
to its National Formulary and as a preferred brand on its other commercial formularies starting July 1, 2021. Movantik®’s total commercial coverage now extends to 152 million American patient lives.
Talicia® (omeprazole,
magnesium, amoxicillin, and rifabutin) delayed-release capsules 10 mg/250 mg/12.5 mg
Talicia® is designed to address the high resistance of H. pylori bacteria to the antibiotics commonly used in
current standard-of-care therapies. Talicia®’s approval was supported, in part, by the results of two positive Phase 3 trials in the U.S. for the treatment of H. pylori-positive adult
patients complaining of epigastric pain and/or discomfort. The confirmatory Phase 3 trial of Talicia® demonstrated 84% eradication of H. pylori infection with Talicia® vs. 58% in
the active comparator arm (p<0.0001). Further, in an analysis of data from this trial, it was observed that subjects with measurable blood levels of drug at visit 3 (approximately day 13) had response rates of 90.3% in the Talicia® arm
vs. 64.7% in the active comparator arm.
Talicia® is designed to address the high resistance of H. pylori bacteria to the antibiotics commonly used in current standard-of-care
therapies. Talicia®’s approval was supported, in part, by the results of two positive Phase 3 trials in the U.S. for the treatment of H. pylori-positive adult patients complaining of epigastric
pain and/or discomfort. The confirmatory Phase 3 trial of Talicia® demonstrated 84% eradication of H. pylori infection with Talicia® vs. 58% in the active comparator arm (p<0.0001). Further, in an analysis of data from this
trial, it was observed that subjects with measurable blood levels of drug at visit 3 (approximately day 13) had response rates of 90.3% in the Talicia® arm vs. 64.7% in the active comparator arm.
We believe that Talicia® may offer a significant benefit over other currently approved drugs in part because of the resistance profile demonstrated in our Phase 3 program, which showed
no bacterial resistance to rifabutin and high resistance to clarithromycin and metronidazole.
Talicia® is the first product we developed that was approved for marketing in the U.S. Talicia® was approved by the FDA on November 1, 2019, and we launched Talicia® in
the U.S. in March 2020.
In November 2014, Talicia® was granted Qualified Infectious Disease Product (QIDP) designation by the FDA. Under its QIDP designation, Talicia® is
eligible for an additional five years of U.S. market exclusivity, on top of the standard exclusivity period, for a total of eight years of market exclusivity.
In July 2021, we announced that OptumRx, part of the UnitedHealth Group - a leader in healthcare coverage serving more than 26 million Americans, had added Talicia to its Commercial Formulary as an unrestricted
brand for H. pylori treatment, effective July 1, 2021. Patient access to Talicia now extends to greater than 8 out of 10 covered U.S. commercial lives.
5
Aemcolo®
Aemcolo®, containing 194 mg of rifamycin, is an orally administered, minimally absorbed antibiotic that is delivered to the colon, approved by the FDA in 2018 for the treatment of travelers’ diarrhea
caused by non-invasive strains of E. coli in adults (“Travelers’ Diarrhea”). In October 2019, we entered into a license agreement with a wholly-owned subsidiary of Cosmo Pharmaceuticals N.V. (“Cosmo”) pursuant to which we were granted exclusive
rights to commercialize Aemcolo® in the U.S. In December 2019, we launched the commercialization of Aemcolo® in the U.S.
Aemcolo® received FDA approval on November 16, 2018, for the treatment of travelers’ diarrhea caused by noninvasive strains of E. coli in adults. Cosmo
transferred the Aemcolo® New Drug Application (NDA) and the IND to RedHill Biopharma Inc., which were accepted on November 27, 2019. This acceptance also includes a commitment to complete any postmarketing requirements or
commitments related to the NDA. There are two pediatric studies that are required to be completed to satisfy the PREA requirements:
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Conduct a randomized, placebo-controlled study to evaluate the safety, tolerability, and efficacy of Aemcolo® (rifamycin) for the treatment of travelers’ diarrhea in children from
6 to 11 years of age.
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Conduct a randomized, placebo-controlled study to evaluate the safety, tolerability, and efficacy of Aemcolo® (rifamycin) for the treatment of travelers’ diarrhea in children from
12 to 17 years of age.
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In October 2017, the FDA granted QIDP and Fast Track designations for Aemcolo®. With the QIDP designation, intended for antibacterial or antifungal drugs that treat serious or
life-threatening infections, together with new chemical entity (NCE) designation, Aemcolo® enjoys marketing exclusivity until 2028. Due to the significant decrease in travel as a result of the pandemic, the travelers’ diarrhea market has
been significantly impacted, and we have not generated meaningful revenues from the sale of Aemcolo®. We do not expect Aemcolo® to generate meaningful revenues until U.S. international travel returns to pre-COVID-19 pandemic
levels, if at all, and there can be no assurance that we will generate meaningful revenues upon return of U.S. international travel to pre-pandemic levels.
RedHill has implemented plans, including re-launching active field promotion of Aemcolo®, to support, and build on, the initial momentum that Aemcolo® was generating pre-COVID-19 travel
restrictions.
We continue to pursue the acquisition of additional commercial products, including, without limitation, through licensing or promotion transaction, asset purchase, joint venture with, acquisition
of, or merger with or other business combination with, companies with rights to commercial GI and other relevant assets and are continuously working to expand U.S.-managed care access and coverage to our commercial products, where appropriate. We
plan to pursue such opportunities in the U.S. and, if available, in other jurisdictions; however, we intend to focus our commercial activities in the U.S.
Recent Developments on our Therapeutic Product Candidates
RHB‑204
RHB‑204 is a patented fixed-dose oral capsule containing a combination of three antibiotics developed for the treatment of pulmonary Mycobacterium avium Complex (MAC) disease in adults with nodular bronchiectasis
(also referred to hereafter as pulmonary nontuberculous mycobacteria (NTM) disease caused by MAC). Each capsule contains clarithromycin, clofazimine, and rifabutin, at doses distinct from RHB‑104.
In November 2020, we initiated our Phase 3 trial to evaluate the efficacy and safety of RHB-204 in adults with pulmonary NTM disease caused by MAC infection. This multi-center, randomized, double-blind, two-part,
placebo-controlled, parallel-group Phase 3 trial is planned to be conducted at up to 40 sites across the U.S. Study endpoints include sputum culture conversion at month six of treatment with RHB-204, compared to placebo and Quality of Life
questionnaire, including improvements in physical functioning, respiratory symptoms and fatigue. An interim sample size re-estimate is planned once the study reaches approximately 50% enrollment.
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In January 2017, we announced that RHB‑204 had been granted QIDP designation by the FDA for the treatment of pulmonary NTM disease, including eligibility for Priority Review, Accelerated Approval and an
extended market exclusivity period, if approved for marketing in the U.S. In October 2020, we announced that the FDA granted RHB-204 Orphan Drug designation which, together with the QIDP designation will extend U.S. market exclusivity to a
total of 12 years, if RHB-204 is approved by the FDA. In January 2021, we announced that the FDA granted RHB-204 Fast Track designation, allowing RedHill access to early and frequent communications with the FDA, to expedite the RHB-204
development program, and to a rolling review of an NDA.
RHB-107
RHB-107 (formerly Mesupron) (INN: upamostat) is a proprietary, first-in-class, orally-administered potent inhibitor of several serine proteases. We are developing this investigational new drug as a potential
treatment for symptomatic COVID-19 patients that do not require hospitalization. In addition, we believe RHB-107 has potential in targeting cancer, inflammatory lung diseases and gastrointestinal diseases. In November 2020, we announced that
the FDA had cleared our IND application for a U.S. Phase 2/3 trial evaluating RHB-107 in non-hospitalized patients with symptomatic COVID-19 who do not require supplemental oxygen. In December 2020, we submitted an amendment to the protocol for
that trial, addressing FDA comments. In February 2021, we announced that the first patient had been dosed in the trial. This multicenter, randomized, double-blind, placebo-controlled, parallel-group trial will evaluate the safety and efficacy
of RHB-107. The first part of the trial is designed for dose selection and is planned to enroll 60 patients. The second part of the trial is planned to enroll 250 patients and will evaluate time to sustained recovery from illness as the primary
endpoint. Each patient will be tested for specific viral strain. Several secondary and exploratory endpoints will also be assessed.
In May 2021, we announced the receipt of a notice of allowance from the USPTO covering RHB-107 as a method for the treatment of COVID-19 caused by the SARS-CoV-2 virus.
Expanded Access Program (EAP)
We have adopted an Expanded Access Program (“EAP”), allowing patients with life-threatening diseases potential access to our investigational new drugs that have not yet
received regulatory marketing approval. Expanded access (sometimes referred to as “compassionate use”) is possible outside of our clinical trials, under certain eligibility criteria, when a certain investigational new drug is needed to treat a
life-threatening condition and when there is some clinical evidence suggesting that the drug might be effective for that condition. Patients who qualify for our EAP do not meet the eligibility criteria or are incapable of participating in our
clinical trials for such therapeutic candidates or there is no clinical trial accessible to such patients. Following the adoption of the program, we continue to receive patient requests to obtain access to our investigational drugs. Subject to
the evaluation of eligibility and all other necessary regulatory, reporting and other conditions and approvals required in all relevant jurisdictions, we provide certain patients with an investigational new drug under the EAP.
January 2021 Underwritten Offering
On January 14, 2021, we closed an underwritten offering of 3,188,776 ADSs at a public offering price of $7.84 per ADS, for total net proceeds of approximately $23.1
million, after deducting underwriting discounts and commissions and approximated offering expenses payable by us in connection with the offering.
March 2021 Underwritten Offering
On March 4, 2021, we closed an underwritten offering of 4,375,000 ADSs at a public offering price of $8.00 per ADS, for total net proceeds of approximately $32.8 million, after deducting underwriting discounts
and commissions and approximated offering expenses payable by us in connection with the offering. On March 11, 2021, and on March 16, 2021, the underwriter exercised its overallotment option and accordingly we issued an additional 272,433
ADSs for total net proceeds of approximately $2.0 million, after deducting underwriting discounts and commissions.
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Recent Developments
In March 2021 we announced that RedHill Biopharma Inc., AstraZeneca AB and AstraZenca Pharmaceuticals LP and Nektar Therapeutics entered into a settlement and license agreement with MSN Pharmaceuticals, Inc. and MSN
Laboratories PVT. LTD. (“MSN”) resolving their patent litigation in the U.S. in response to MSN’s Abbreviated New Drug Application (“ANDA”) seeking approval by the US. FDA to market a generic version of Movantik®. Under the terms of the
settlement agreement, MSN may not sell a generic version of Movantik® in the U.S. until October 1, 2030 (subject to U.S. FDA approval) or earlier under certain circumstances. The parties to the settlement agreement have also agreed to
file a stipulation and order of dismissal with the U.S. District Court for the District of Delaware which will conclude this litigation with respect to MSN. As required by law, the parties will submit the settlement agreement to the U.S. Federal
Trade Commission and the U.S. Department of Justice for review. The settlement with MSN did not end RedHill’s ongoing litigation against the other two ANDA filers.
In July 2021, we announced that RedHill Biopharma Inc., AstraZeneca AB and AstraZeneca Pharmaceuticals LP and Nektar Therapeutics have entered into a settlement and license agreement with Apotex, Inc. and Apotex Corp.
(“Apotex”) resolving their patent litigation in the U.S. in response to Apotex’s Abbreviated New Drug Application (“ANDA”) seeking approval by the US. FDA to market a generic version of Movantik®. Under the terms of the settlement
agreement, Apotex may not sell a generic version of Movantik® in the U.S. until October 1, 2030 (subject to U.S. FDA approval) or earlier under certain circumstances. The parties to the settlement agreement also agreed to file a
stipulation and order of dismissal with the U.S. District Court for the District of Delaware which will conclude this litigation with respect to Apotex. As required by law, the parties will submit the settlement agreement to the U.S. Federal Trade
Commission and the U.S. Department of Justice for review. The settlement with Apotex did not end RedHill’s ongoing litigation against the other one ANDA filer.
Summary of Risk Factors
The following is a summary of some of the principal risks we face. The list below is not exhaustive, and investors should read the “Risk Factors” section, including the “Item 3. Key Information –
Risk Factors” in our Annual Report on Form 20-F for the year-ended December 31, 2020, in full.
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Our pursuit of treatments for SARS-CoV-2 (the virus that causes COVID-19) infection in patients entails a high level of uncertainty. We have conducted limited testing of both opaganib and
RHB-107 and cannot assure you that either of them will prove to be a safe and effective treatment for COVID-19 or will be approved for marketing or Emergency Use Authorization by the FDA or other regulatory authorities.
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If we are successful in developing a COVID-19 therapeutic, we may need to devote significant resources to our manufacturing scale-up and large-scale deployment, including for use by the
U.S. or other governments. If one of our COVID-19 therapeutic candidates is approved for marketing we may also need to devote significant resources to further expand our U.S. sales and marketing activities and increase or maintain personnel
to accommodate sales in the U.S.
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The ongoing COVID-19 pandemic may adversely affect our business, revenues, results of operations and financial condition.
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Our current working capital is not sufficient to commercialize our current commercial products or to complete the research and development with respect to any or all of our therapeutic
candidates. We may need to raise additional capital to achieve our strategic objectives and to execute our business plans, and our failure to raise sufficient capital or on favorable terms would significantly impair our ability to fund the
commercialization of our current commercial products, therapeutic candidates, or the products we may commercialize or promote in the future, attract development or commercial partners or retain key personnel, and to fund operations and
develop our therapeutic candidates.
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Our long-term capital requirements are subject to numerous risks.
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Our term loan facility imposes significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities and may restrict our operational
flexibility, and our failure to comply with the restrictive covenants in our term loan facility could have a material adverse effect on our business.
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We may be unable to generate sufficient cash flow to make the required payments under the term loan facility or to adhere to other requirements under the term loan facility.
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The indebtedness under our term loan facility is secured by substantially all of the current and future assets of RedHill Biopharma Inc., all of our assets related in any material respect
to Talicia®, and all of the equity interests of RedHill Biopharma Inc. As a result of these security interests, such assets would only be available to satisfy claims of our general creditors or t holders of our equity securities
if we were to become insolvent to the extent the value of such assets exceeded the amount of our indebtedness and other obligations. In addition, the existence of these security interests may adversely affect our financial flexibility.
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If we or our future development or commercialization partners are unable to obtain or maintain the FDA or other foreign regulatory clearance and approval for our commercial products or
therapeutic candidates, we or our commercialization partners will be unable to commercialize our current commercial products, products we may commercialize or promote in the future or our therapeutic candidates, upon approval, if any.
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Corporate Information
Our principal executive offices are located at 21 Ha’arba’a Street, Tel Aviv, Israel and our telephone number is +972 (3) 541-3131. Our website address is http://www.redhillbio.com. The
information on our web site is included as an inactive textual reference only and does not constitute part of this prospectus. Our registered agent in the United States is RedHill Biopharma Inc. The address of RedHill Biopharma Inc. is 8045 Arco
Corporate Drive, Suite 200, Raleigh, NC 27617.
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An investment in our securities involves a high degree of risk. Our business, financial condition or results of operations could be adversely affected by any of these risks.
You should carefully consider the risk factors discussed under the caption "Item 3: Key Information - Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2020, and in any other
filing we make with the SEC subsequent to the date of this prospectus, each of which is incorporated herein by reference, and in any supplement to this prospectus, before making your investment decision. The risks and uncertainties we have
described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. Past financial performance may not be a reliable indicator of future
performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, business prospects, financial condition or results of operations could be seriously
harmed. This could cause the trading price of the ADSs to decline, resulting in a loss of all or part of your investment. Please also read carefully the section below entitled “Forward-Looking Statements.”
This prospectus, including the information incorporated by reference into this prospectus, contains, and any prospectus supplement may include forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. 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 subject to risks and uncertainties. You should not put undue reliance on any forward-looking statements. 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:
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estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
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our ability to obtain additional financing;
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our receipt and timing of regulatory clarity and approvals for our therapeutic candidates, and the timing of other regulatory filings and approvals;
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the initiation, timing, progress, and results of our research, manufacturing, preclinical studies, clinical trials, and other therapeutic candidate development efforts, as well as the extent
and number of additional studies that we may be required to conduct;
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our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or clinical trials;
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our reliance on third parties to conduct key portions of our clinical trials, including data management services, and the potential for those third parties to not perform satisfactorily;
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our ability to establish and maintain corporate collaborations;
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that products we promote or commercialize may be withdrawn from the market by regulatory authorities and our need to comply with continuing laws, regulations and guidelines to maintain
clearances and approvals for our products;
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our ability to acquire products approved for marketing in the U.S. that achieve commercial success and to maintain our own marketing and commercialization capabilities;
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the research, manufacturing, clinical development, commercialization, and market acceptance of our therapeutic candidates or commercial products;
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the properties and characteristics of our therapeutic candidates and of the results observed with our therapeutic candidates in research, preclinical studies or clinical trials;
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the implementation of our business model, strategic plans for our business, therapeutic candidates and commercial products;
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the impact of other companies and technologies that compete with us within our industry;
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our estimates of the markets, their size, characteristics and their potential for our therapeutic candidates and commercial products and our ability to serve those markets;
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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
or violating the intellectual property rights of others;
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parties from whom we license or acquire our intellectual property defaulting in their obligations toward us;
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the failure by a licensor or a partner of ours to meet their respective obligations under our acquisition, in-license or other development or commercialization agreements or renegotiate the
obligations under such agreements, or if other events occur that are not within our control, such as bankruptcy of a licensor or a partner;
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our ability to implement and maintain network systems and controls that are effective at preventing cyber-attacks, malware intrusions, malicious viruses and ransomware threats; and
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the impact of the political and security situation in Israel on our business.
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We caution you to carefully consider these risks and not to place undue reliance on our forward-looking statements. Except as required by law, we assume no responsibility for
updating any forward-looking statements.
The table below sets forth our total capitalization as of March 31, 2021. The financial data in the following table should be read in conjunction with our financial statements
and notes thereto incorporated by reference herein.
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As of March 31, 2021
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Actual U.S. dollars
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(in thousands)
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Total debt (1)
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$
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167,082
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Ordinary shares, par value NIS 0.01 per share
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1,309
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Additional paid-in capital
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354,057
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Accumulated deficit
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(302,325
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Total shareholders’ equity
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53,041
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Total capitalization
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$
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220,123
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(1)
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Includes $66,629 thousand of current liabilities, which is mainly accounts payable, allowance for deductions from revenues and accrued expenses
and $100,453 thousand under non-current liabilities, mainly borrowing and payable in respect of intangible assets purchase.
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The ADSs were traded on the Nasdaq Capital Market under the symbol “RDHL” from December 27, 2012 to July 20, 2018, and have since that date been listed on the Nasdaq Global
Market under the same symbol. Our Ordinary Shares were traded on the TASE under the symbol “RDHL” from February 2011 to February 2020, when we voluntarily delisted the Ordinary Shares from trading on the TASE, effective February 13, 2020. They are
listed but are not traded on the Nasdaq Global Market in connection with the ADSs.
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Unless otherwise indicated in an accompanying prospectus supplement, the net proceeds from the sale of securities will be used for general corporate purposes, including research
and development related purposes in connection with our therapeutic candidates, for potential acquisitions and to support commercial operations.
A description of our Ordinary Shares can be found in Exhibit 2.3 to our Annual Report on Form 20-F filed with the SEC on March 18, 2021.
A description of the ADSs, each of which represents 10 of our Ordinary Shares, can be found in Exhibit 2.3 to our Annual Report on Form 20-F filed with the SEC on March 18, 2021.
We may issue warrants to purchase ADS and/or Ordinary Shares. Warrants may be issued independently or together with any other securities and may be attached to, or separate from, such securities.
We will evidence each series of warrants by warrant certificates that we may issue under a separate agreement. We may enter into a warrant agreement with a warrant agent. We may also choose to act as our own warrant agent. We will indicate the name
and address of any such warrant agent in the applicable prospectus supplement relating to a particular series of warrants. The terms of any warrants to be issued and a description of the material provisions of the applicable warrant agreement will
be set forth in the applicable prospectus supplement.
The applicable prospectus supplement will describe the following terms of any warrants in respect of which this prospectus is being delivered:
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the title of such warrants;
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the aggregate number of such warrants;
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the price or prices at which such warrants will be issued and exercised;
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the currency or currencies in which the price of such warrants will be payable;
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the securities purchasable upon exercise of such warrants;
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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
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if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;
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if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;
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if applicable, the date on and after which such warrants and the related securities will be separately transferable;
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information with respect to book-entry procedures, if any;
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any material Israeli and United States federal income tax consequences;
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the anti-dilution provisions of the warrants, if any; and
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any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.
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Amendments and Supplements to Warrant Agreement
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We and the warrant agent may amend or supplement the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.
We may issue subscription rights to purchase our Ordinary Shares and/or ADSs. These subscription rights may be issued independently or together with any other security offered hereby and may or
may not be transferable by the shareholder receiving the subscription rights in such offering. In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers
pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
The prospectus supplement relating to any subscription rights we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some
or all of the following:
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the price, if any, for the subscription rights;
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the exercise price payable for each ordinary share and/or ADS upon the exercise of the subscription rights;
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the number of subscription rights to be issued to each shareholder;
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the number and terms of the Ordinary Shares and/or ADSs which may be purchased per each subscription right;
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the extent to which the subscription rights are transferable;
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any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;
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the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
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the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities; and
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if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection with the offering of subscription rights.
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The description in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference
to the applicable subscription right agreement, which will be filed with the SEC if we offer subscription rights. For more information on how you can obtain copies of the applicable subscription right agreement if we offer subscription rights, see
“Where You Can Find More Information; Incorporation of Information by Reference” beginning on page 17. We urge you to read the applicable subscription right agreement and any applicable prospectus supplement in their entirety.
We may issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit will be issued so that the holder of
the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately at any time, or at any time before a specified date.
The prospectus supplement relating to any units we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some or all of the
following:
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the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;
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any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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any material provisions of the governing unit agreement that differ from those described above.
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The description in the applicable prospectus supplement of any units we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable unit agreement, which will be filed with the SEC if we offer units. For more information on how you can obtain copies of the applicable unit agreement if we offer units, see “Where You Can Find More Information; Incorporation of
Information by Reference” beginning on page 17. We urge you to read the applicable unit agreement and any applicable prospectus supplement in their entirety.
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The securities being offered by this prospectus may be sold:
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through agents;
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to or through one or more underwriters on a firm commitment or agency basis;
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through put or call option transactions relating to the securities;
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in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) of the Securities Act;
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through broker-dealers;
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directly to purchasers, through a specific bidding or auction process, on a negotiated basis or otherwise;
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through any other method permitted pursuant to applicable law; or
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through a combination of any such methods of sale.
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At any time a particular offer of the securities covered by this prospectus is made, a revised prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount of securities covered by this prospectus being offered and the terms of the offering, including the name or names of any underwriters, dealers, brokers or agents, any discounts, commissions, concessions and other
items constituting compensation from us and any discounts, commissions or concessions allowed or reallowed or paid to dealers. Such prospectus supplement, and, if necessary, a post-effective amendment to the registration statement of which this
prospectus is a part, will be filed with the SEC to reflect the disclosure of additional information with respect to the distribution of the securities covered by this prospectus. In order to comply with the securities laws of certain states, if
applicable, the securities sold under this prospectus may only be sold through registered or licensed broker-dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from registration or qualification requirements is available and is complied with.
The distribution of securities may be effected from time to time in one or more transactions, including block transactions and transactions on the Nasdaq Global Market or any
other organized market where the securities may be traded. The securities may be sold at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or at
negotiated prices. The consideration may be cash, or another form negotiated by the parties. Agents, underwriters or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts,
concessions or commissions to be received from us or from the purchasers of the securities. Any dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of
the securities may be deemed to be underwriting discounts. If any such dealers or agents were deemed to be underwriters, they may be subject to statutory liabilities under the Securities Act.
Agents may from time to time solicit offers to purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or
sale of the securities and set forth any compensation payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment. Any agent selling the
securities covered by this prospectus may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities.
If underwriters are used in a sale, securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery contracts or other contractual commitments. Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used in the sale of securities, an underwriting agreement will be executed with
the underwriter or underwriters, as well as any other underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions, including compensation of the underwriters and
dealers and the public offering price, if applicable. The prospectus and prospectus supplement will be used by the underwriters to resell the securities.
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If a dealer is used in the sale of the securities, we or an underwriter will sell the securities to the dealer, as principal. The dealer may then resell the securities to the
public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement the name of the dealer and the terms of the transactions.
We may directly solicit offers to purchase the securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be
underwriters within the meaning of the Securities Act with respect to any resale of the securities. To the extent required, the prospectus supplement will describe the terms of any such sales, including the terms of any bidding or auction process,
if used.
Agents, underwriters and dealers may be entitled under agreements which may be entered into with us to indemnification by us against specified liabilities, including
liabilities incurred under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required, the prospectus supplement will describe the terms and conditions of the indemnification or
contribution. Some of the agents, underwriters or dealers, or their affiliates may be customers of, engage in transactions with or perform services for us or our subsidiaries.
Any person participating in the distribution of securities registered under the registration statement that includes this prospectus will be subject to applicable provisions
of the Securities Exchange Act of 1934, as amended ( the “Exchange Act”), and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of purchases and sales of any of our securities by that
person. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of our securities to engage in market-making activities with respect to our securities. These restrictions may affect the marketability of our
securities and the ability of any person or entity to engage in market-making activities with respect to our securities.
Certain persons participating in an offering may engage in over-allotment, stabilizing transactions, short-covering transactions, penalty bids and other transactions that
stabilize, maintain or otherwise affect the price of the offered securities. These activities may maintain the price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing
bids, effecting syndicate covering transactions or imposing penalty bids, each of which is described below.
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A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security.
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A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with
the offering.
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A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities
originally sold by the syndicate member are purchased in syndicate covering transactions.
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These transactions may be effected on an exchange or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated
quotation system, or in the over-the-counter market or otherwise.
If so indicated in the applicable prospectus supplement, we will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase
offered securities from us at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to
those conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts.
15
In addition, Ordinary Shares or ADSs may be issued upon conversion of or in exchange for debt securities or other securities.
Any underwriters to whom offered securities are sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated to
do so and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a national securities exchange. No assurance can be given that there will be a market for the offered securities.
Any securities that qualify for sale pursuant to Rule 144 or Regulation S under the Securities Act, may be sold under Rule 144 or Regulation S rather than pursuant to this
prospectus.
To the extent that we make sales to or through one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms
of a distribution agreement between us and the underwriters or agents. If we engage in at-the-market sales pursuant to a distribution agreement, we will sell our Ordinary Shares or ADSs to or through one or more underwriters or agents, which
may act on an agency basis or on a principal basis. During the term of any such agreement, we may sell Ordinary Shares or ADSs on a daily basis in exchange transactions or otherwise as we agree with the underwriters or agents. The distribution
agreement will provide that any Ordinary Shares or ADSs sold will be sold at prices related to the then prevailing market prices for our Ordinary Shares or ADSs. Therefore, exact figures regarding proceeds that will be raised or commissions to
be paid cannot be determined at this time and will be described in a prospectus supplement. Pursuant to the terms of the distribution agreement, we also may agree to sell, and the relevant underwriters or agents may agree to solicit offers to
purchase, blocks of our Ordinary Shares, ADSs or warrants. The terms of each such distribution agreement will be set forth in more detail in a prospectus supplement to this prospectus.
In connection with offerings made through underwriters or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding
securities in consideration for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these outstanding
securities, including in short sale transactions. If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings of securities.
We may enter into derivative transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the
applicable prospectus supplement indicates, in connection with those derivatives, such third parties (or affiliates of such third parties) may sell securities covered by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, such third parties (or affiliates of such third parties) may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of shares, and may use securities
received from us in settlement of those derivatives to close out any related open borrowings of shares. The third parties (or affiliates of such third parties) in such sale transactions will be underwriters and, if not identified in this
prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment).
We may loan or pledge securities to a financial institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or
third party may transfer its short position to investors in our securities or in connection with a simultaneous offering of other securities offered by this prospectus or in connection with a simultaneous offering of other securities offered by
this prospectus.
Certain legal matters with respect to Israeli law and with respect to the validity of the offered securities under Israeli law will be passed upon for us by Gross & Co.
Certain legal matters with respect to U.S. federal securities law and New York law will be passed upon for us by Haynes and Boone, LLP.
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The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which
is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2020, have been so incorporated in reliance on the
report of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, given on the authority of said firm as experts in auditing
and accounting.
We have filed with the SEC a registration statement on Form F-3 under the Securities Act, with respect to the securities offered by this prospectus. However, as is permitted
by the rules and regulations of the SEC, this prospectus, which is part of our registration statement on Form F-3, omits certain non-material information, exhibits, schedules and undertakings set forth in the registration statement. For further
information about us, and the securities offered by this prospectus, please refer to the registration statement.
We are subject to the reporting requirements of the Exchange Act that are applicable to a foreign private issuer. In accordance with the Exchange Act, we file reports,
including annual reports on Form 20-F by April 30 of each year. We also furnish to the SEC under cover of Form 6-K material information required to be made public in Israel, filed with and made public by any stock exchange or distributed by us to
our shareholders.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the SEC (http://www.sec.gov). These SEC filings are also available to the public from commercial document retrieval services.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders and our officers,
directors and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained in Section 16 of the Exchange Act and related Exchange Act rules.
We file annual and special reports and other information with the SEC. These filings contain important information which does not appear in this prospectus. The SEC allows us
to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to other documents which we have filed or will file with the SEC. We are incorporating by reference in
this prospectus the documents listed below and all amendments or supplements we may file to such documents, as well as any future filings we may make with the SEC on Form 20-F under the Exchange Act before the time that all of the securities
offered by this prospectus have been sold or de-registered:
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the description of our Ordinary Shares contained in our Registration Statement on Form 20-F filed with the SEC on December 26, 2012;
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our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on March 18, 2021; and
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reports on Form 6-K filed on March 22, 2021, March 25, 2021, April 9, 2021, May 20, 2021, May 21, 2021, May 24, 2021, May 26, 2021 (two filings), May 27, 2021, June
7, 2021, June 9, 2021, June 10, 2021, June 17, 2021, June 21, 2021, June 28, 2021, July 13, 2021, July 19, 2021, July 20, 2021, July 22, 2021, and July 26, 2021 (in each case only to the extent provided in such Form 6-K).
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In addition, any reports on Form 6-K we submit to the SEC pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness of the
registration statement that we specifically identify in such forms as being incorporated by reference into the registration statement of which this prospectus forms a part, all subsequent annual reports on Form 20-F filed after the effective date
of this registration statement and prior to the termination of this offering, and any reports on Form 6-K subsequently submitted to the SEC or portions thereof that we specifically identify in such forms as being incorporated by reference into the
registration statement of which this prospectus forms a part, shall be considered to be incorporated into this prospectus by reference and shall be considered a part of this prospectus from the date of filing or submission of such documents.
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Certain statements in and portions of this prospectus update and replace information in the above-listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus or the above-listed documents.
We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such
documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to RedHill Biopharma Ltd., 21 Ha'arba'a Street, Tel Aviv 6473921, Israel, Attn: Dror Ben-Asher, telephone number:
+972 (3) 541-3131. You may also obtain information about us by visiting our website at www.redhillbio.com. Information contained in our website is included as an inactive textual reference only and is not
part of this prospectus. The SEC maintains an Internet site, http://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus,
substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United
States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States.
It may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based
on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the
claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact which can be a time-consuming and costly process. Certain matters of the procedure will also be governed by Israeli law.
Subject to specified time limitations and legal procedures, Israeli courts may enforce a United States judgment in a civil matter which, subject to certain exceptions, is
non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that:
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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;
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the prevailing law of the foreign state in which the judgments were rendered allows the enforcement of judgments of Israeli courts (however, the Israeli courts may waive this requirement
following a request by the attorney general);
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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;
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the judgments are not contrary to public policy, and the enforcement of the civil liabilities set forth in the judgment does not impair the security or sovereignty of the State of Israel;
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the judgments were not obtained by fraud and do not conflict with any other valid judgment in the same matter between the same parties;
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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
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the obligations under the judgment are enforceable according to the laws of the State of Israel and according to the law of the foreign state in which the relief was granted.
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We have irrevocably appointed RedHill Biopharma Inc. as our agent to receive service of process in any action against us in any United States federal or state court arising
out of this offering or any purchase or sale of securities in connection with this offering.
If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred
out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the
date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli consumer price index plus
interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
The following table sets forth the expenses (other than underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’ compensation,
if any) expected to be incurred by us in connection with a possible offering of securities registered under this registration statement.
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SEC registration fees
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$
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13,066
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FINRA fees
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$
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- |
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Legal fees and expenses
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$
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*
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Accountants’ fees and expenses
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$
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*
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Miscellaneous
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$
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*
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Total
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$
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*
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* These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and
Exchange Commission, of which this prospectus is a part, is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 29, 2021
PROSPECTUS
Up to $100,000,000
American Depositary Shares each representing 10 Ordinary Shares
RedHill Biopharma Ltd.
We have entered into a sales agreement (the “Sales Agreement”), with SVB Leerink LLC (“SVB Leerink”) and Cantor Fitzgerald & Co. (“Cantor”), dated July 29, 2021, relating to the American Depositary Shares
(“ADSs”) offered by this prospectus and the accompanying base prospectus. Each ADS represents 10 of our ordinary shares, par value NIS 0.01 per share (“Ordinary Shares”). Under this prospectus and the accompanying base prospectus, we may offer
and sell ADSs having an aggregate offering price of up to $100.0 million from time to time through SVB Leerink and Cantor (the “Sales Agents”), acting as our agents, in accordance with the Sales Agreement.
Sales of the ADSs, if any, under this prospectus and the accompanying base prospectus may be made by any method permitted that is deemed an “at the market” offering as defined in Rule 415(a)(4) promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq Global Market (“Nasdaq”), on or through any other existing trading market for our Ordinary Shares or ADSs or to or through a market
maker. If expressly authorized by us, the Sales Agents may also sell the ADSs in privately negotiated transactions. The Sales Agents are not required to sell any specific number or dollar amount of securities but will act as our sales agents using
commercially reasonable efforts consistent with their normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Nasdaq, on mutually agreed terms between the Sales Agents and us. There are
no minimum sale requirements, and there is no arrangement for funds to be received in any escrow, trust or similar arrangement.
The compensation payable to the Sales Agents for sales of ADSs sold pursuant to the Sales Agreement will be an amount up to 3.0% of the gross proceeds of any ADSs sold under the Sales Agreement. See
"Plan of Distribution" beginning on page 24 for additional information regarding the compensation to be paid to the Sales Agents. In connection with the sale of the ADSs on our behalf, each Sales Agent will be deemed to be an "underwriter" within the
meaning of the Securities Act, and the compensation paid to the Sales Agents will be deemed to be underwriting compensation. We have also agreed in the Sales Agreement to provide indemnification and contribution to the Sales Agents with respect to
certain liabilities, including liabilities under the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The ADSs are listed on the Nasdaq under the symbol “RDHL.” On July 28, 2021, the last reported sale price of the ADSs on the Nasdaq was $6.61 per ADS.
Investing in our securities involves a high degree of risk. Please read “Risk Factors” beginning on page 12 of this prospectus, on page 10 of the accompanying base prospectus and
in the documents incorporated by reference into this prospectus.
None of the United States Securities and Exchange Commission, any state securities commission or any other regulatory body, has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus or the accompanying base prospectus. Any representation to the contrary is a criminal offense.
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SVB Leerink
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Cantor
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The date of this prospectus is , 2021.
Table Of Contents
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ii
This prospectus and the accompanying base prospectus form part of a registration statement that we filed with the Securities and Exchange Commission (“SEC”), using a “shelf” registration process.
This document comprises two parts. The first part is this prospectus, which describes the specific terms of this offering and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by
reference herein. The second part, the accompanying base prospectus, gives more general information, some of which may not apply to this offering. Generally, when we refer to this prospectus, we are referring to both parts of this document combined.
If the description of the offering varies between this prospectus and the accompanying base prospectus or the documents incorporated herein by reference filed prior to the date of this prospectus, you should rely on the information contained in this
prospectus. However, if any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference in the accompanying base prospectus — the statement in the
document having the later date modifies or supersedes the earlier statement.
You should rely only on the information provided or incorporated by reference into this prospectus and the accompanying base prospectus, all information incorporated by reference herein and therein,
as well as the additional information described under “Incorporation of Information by Reference” on page 26 of this prospectus. We have not, and the Sales Agents have not, authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. This prospectus and the accompanying base prospectus do not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this
prospectus and the accompanying base prospectus in any jurisdiction where it is unlawful to make such offer or solicitation. You should not assume that the information contained in this prospectus or the accompanying base prospectus, or any document
incorporated by reference in this prospectus or the accompanying base prospectus, is accurate as of any date other than the date on the front cover of the applicable document. Neither the delivery of this prospectus and the accompanying base
prospectus, nor any distribution of securities pursuant to this prospectus and the accompanying base prospectus shall, under any circumstances, create any implication that there has been no change in the information set forth or incorporated by
reference into this prospectus and the accompanying base prospectus or in our affairs since the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
Before purchasing any securities, you should carefully read both this prospectus and the accompanying base prospectus, together with the additional information described under the headings, “Where
You Can Find More Information” and “Incorporation of Information by Reference,” on page 26 of this prospectus.
Unless the context otherwise requires, all references to “RedHill,” “we,” “us,” “our,” the “Company” and similar designations refer to RedHill Biopharma Ltd. and its wholly-owned subsidiary, RedHill Biopharma Inc. The
term “NIS” refers to New Israeli Shekels, the lawful currency of the State of Israel, the terms “dollar,” “US$” or “$” refer to U.S. dollars, the lawful currency of the United States (“U.S.”). Our functional and presentation currency is the U.S.
dollar. Foreign currency transactions in currencies other than the U.S. dollar are translated in this prospectus into U.S. dollars using exchange rates in effect at the date of the transactions.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made solely
for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties, and covenants should not be relied on as accurately representing the current state of our affairs.
We are offering to sell, and seeking offers to buy, ADSs representing our Ordinary Shares only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the
accompanying base prospectus and the offering of the ADSs in certain jurisdictions may be restricted by law. Persons outside the U.S. who come into possession of this prospectus and the accompanying base prospectus must inform themselves about, and
observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus and the accompanying base prospectus outside the U.S. This prospectus and the accompanying base prospectus do not constitute, and may not be used
in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus and the accompanying base prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer
or solicitation.
This prospectus, the accompanying base prospectus, and the information incorporated by reference herein and therein may include forward-looking statements. 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 subject to risks and uncertainties. In addition, certain sections of this prospectus,
the accompanying base prospectus, and the information incorporated by reference herein contain information obtained from independent industry and other sources that we have not independently verified. You should not put undue reliance on any
forward-looking statements. 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.
Our ability to predict our operating results or the effects of various events on our operating results is inherently uncertain. Therefore, we caution you to consider carefully the matters described
under the caption “Risk Factors” on page 12 of this prospectus, and certain other matters discussed in this prospectus, the accompanying base prospectus, and the information incorporated by reference herein and therein, and other publicly available
sources. Such factors and many other factors beyond our control could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by the
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:
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estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
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our ability to obtain additional financing;
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our receipt and timing of regulatory clarity and approvals for our therapeutic candidates, and the timing of other regulatory filings and approvals;
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the initiation, timing, progress, and results of our research, manufacturing, preclinical studies, clinical trials, and other therapeutic candidate development efforts, as well as the extent
and number of additional studies that we may be required to conduct;
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our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or clinical trials;
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our reliance on third parties to conduct key portions of our clinical trials, including data management services, and the potential for those third parties to not perform satisfactorily;
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our ability to establish and maintain corporate collaborations;
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that products we promote or commercialize may be withdrawn from the market by regulatory authorities and our need to comply with continuing laws, regulations and guidelines to maintain
clearances and approvals for our products;
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our ability to acquire products approved for marketing in the U.S. that achieve commercial success and to maintain our own marketing and commercialization capabilities;
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the research, manufacturing, clinical development, commercialization, and market acceptance of our therapeutic candidates or commercial products;
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the properties and characteristics of our therapeutic candidates and of the results observed with our therapeutic candidates in research, preclinical studies or clinical trials;
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the implementation of our business model, strategic plans for our business, therapeutic candidates and commercial products;
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the impact of other companies and technologies that compete with us within our industry;
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our estimates of the markets, their size, characteristics and their potential for our therapeutic candidates and commercial products and our ability to serve those markets;
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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
or violating the intellectual property rights of others;
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parties from whom we license or acquire our intellectual property defaulting in their obligations toward us;
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the failure by a licensor or a partner of ours to meet their respective obligations under our acquisition, in-license or other development or commercialization agreements or renegotiate the
obligations under such agreements, or if other events occur that are not within our control, such as bankruptcy of a licensor or a partner;
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our ability to implement and maintain network systems and controls that are effective at preventing cyber-attacks, malware intrusions, malicious viruses and ransomware threats; and
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the impact of the political and security situation in Israel and in the U.S. on our business.
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Summary of Risk Factors
The following is a summary of some of the principal risks we face. The list below is not exhaustive, and investors should read the “Risk Factors” section, including the “Item 3. Key Information –
Risk Factors” in our Annual Report on Form 20-F for the year-ended December 31, 2020, in full.
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Our pursuit of treatments for SARS-CoV-2 (the virus that causes COVID-19) infection in patients entails a high level of uncertainty. We have conducted limited testing of both opaganib and
RHB-107 and cannot assure you that either of them will prove to be a safe and effective treatment for COVID-19 or will be approved for marketing or Emergency Use Authorization by the FDA or other regulatory authorities.
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If we are successful in developing a COVID-19 therapeutic, we may need to devote significant resources to our manufacturing scale-up and large-scale deployment, including for use by the
U.S. or other governments. If one of our COVID-19 therapeutic candidates is approved for marketing, we may also need to devote significant resources to further expand our U.S. sales and marketing activities and increase or maintain
personnel to accommodate sales in the U.S.
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The ongoing COVID-19 pandemic may adversely affect our business, revenues, results of operations and financial condition.
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Our current working capital is not sufficient to commercialize our current commercial products or to complete the research and development with respect to any or all of our therapeutic
candidates. We may need to raise additional capital to achieve our strategic objectives and to execute our business plans, and our failure to raise sufficient capital or on favorable terms would significantly impair our ability to fund the
commercialization of our current commercial products, therapeutic candidates, or the products we may commercialize or promote in the future, attract development or commercial partners or retain key personnel, and to fund operations and
develop our therapeutic candidates.
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Our long-term capital requirements are subject to numerous risks.
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Our term loan facility imposes significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities and may restrict our operational
flexibility, and our failure to comply with the restrictive covenants in our term loan facility could have a material adverse effect on our business.
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We may be unable to generate sufficient cash flow to make the required payments under the term loan facility or to adhere to other requirements under the term loan facility.
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The indebtedness under our term loan facility is secured by substantially all of the current and future assets of RedHill Biopharma Inc., all of our assets related in any material respect
to Talicia®, and all of the equity interests of RedHill Biopharma Inc. As a result of these security interests, such assets would only be available to satisfy claims of our general creditors or to holders of our equity securities
if we were to become insolvent to the extent the value of such assets exceeded the amount of our indebtedness and other obligations. In addition, the existence of these security interests may adversely affect our financial flexibility.
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If we or our future development or commercialization partners are unable to obtain or maintain the FDA or other foreign regulatory clearance and approval for our commercial products or
therapeutic candidates, we or our commercialization partners will be unable to commercialize our current commercial products, products we may commercialize or promote in the future or our therapeutic candidates, upon approval, if any.
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This summary highlights selected information about us, this offering and information contained in greater detail elsewhere
in this prospectus, the accompanying base prospectus, any free writing prospectus that we have authorized for use, and in the documents incorporated by reference. This summary is not complete and does not contain all of the information that
you should consider before investing in the ADSs. You should carefully read and consider this entire prospectus, the accompanying base prospectus and the documents, including financial statements and related notes, and information
incorporated by reference into this prospectus, including the financial statements and “Risk Factors” starting on page 12 of this prospectus, before making an investment decision. If you invest in our securities, you are assuming a high
degree of risk.
Our Business
Overview
We are a specialty biopharmaceutical company, primarily focused on gastrointestinal (“GI”) and infectious diseases. Our primary goal is to become a leading
specialty biopharmaceutical company through our commercial presence in the U.S. that supports current commercialization of products approved for marketing and potential future commercialization of our therapeutic candidates, if
approved.
We are currently focused primarily on the commercialization in the U.S. of the GI-related products, Movantik® (naloxegol), Talicia® (omeprazole, amoxicillin, and
rifabutin) and Aemcolo® (rifamycin).
In addition, we continue to develop our pipeline of clinical-stage therapeutic candidates, including, among others, the study of our therapeutic candidates, opaganib (ABC294640) and RHB-107 (upamostat),
as potential treatments for COVID-19. We look for opportunities to leverage our commercial presence and capabilities in the U.S. to support the potential future launch of our therapeutic candidates currently under development, if
approved by the U.S. Food and Drug Administration (“FDA”), or any FDA-approved products that we may acquire or license in the future.
Our therapeutic candidates are designed to exhibit greater efficacy and/or provide improvements over existing drugs in various ways, including by one or more of the following: by improving
their safety profile, reducing side effects, lowering the number of administrations, using a more convenient administration form or providing a cost advantage. Our current pipeline consists of six therapeutic candidates, most of which are
in late-stage clinical development.
We generate our pipeline of therapeutic candidates by identifying, validating and in-licensing or acquiring products that are consistent with our product and corporate strategy and that
have the potential to exhibit a favorable probability of therapeutic and commercial success. We have one product that we primarily developed internally which has been approved for marketing and, to date, none of our therapeutic candidates
has generated meaningful revenues. We plan to commercialize our therapeutic candidates, upon approval, if any, through licensing and other commercialization arrangements outside the U.S. with pharmaceutical companies on a global and
territorial basis or, in the case of commercialization in the U.S., independently with our dedicated commercial operations or in potential partnership with other commercial-stage companies. We also evaluate, on a case-by-case basis,
co-development, co-promotion, licensing and similar arrangements.
U.S. and global COVID-19 studies with opaganib
Opaganib, a new chemical entity, is a proprietary, first-in-class, orally-administered, sphingosine kinase-2 (SK2) selective inhibitor with observed anticancer, anti-inflammatory, and antiviral activities,
targeting multiple oncology, viral, inflammatory, and gastrointestinal indications.
4
In July 2020, we initiated a global Phase 2/3 clinical trial evaluating opaganib in hospitalized patients with severe COVID-19 pneumonia. This global multi-center, randomized, double-blind, parallel-arm,
placebo-controlled trial enrolled a total of 475 patients requiring hospitalization and treatment with supplemental oxygen. The study has been approved in ten countries. On July 19, 2021, we announced that we had completed treatment and
follow-up of all 475 patients in the trial and that top-line results are expected in the coming weeks. The primary endpoint of the trial is the proportion of patients breathing room air without oxygen support by Day 14. Additional
important outcome measures, such as time to discharge from hospital, improvement according to the World Health Organization Ordinal Scale for Clinical Improvement and incidence of intubation and mortality, will also be captured in the
follow-up period of up to six weeks. The trial has received four independent DSMB recommendations to continue following unblinded safety reviews and a futility review.
In December 2020, we announced that our randomized, double-blind, placebo-controlled U.S. Phase 2 trial with opaganib in patients hospitalized with COVID-19 pneumonia demonstrated preliminary top-line positive
safety and efficacy data. The trial, which was not powered for statistical significance, enrolled 40 patients requiring hospitalization and supplemental oxygen.
In June 2021, we announced the presentation of the findings from the 40-patient U.S. phase 2 trial, including:
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• 50.0% of patients treated with opaganib (n=22) reached room air by Day
14 compared to 22.2% in the placebo group (n=18). The benefit of reaching room air by Day 14 for patients on opaganib was maintained regardless of whether or not the patients were also receiving dexamethasone and/or remdesivir.
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• 86.4% of patients treated with opaganib were discharged from hospital
by Day 14 compared to 55.6% of patients treated with placebo.
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• Median time to discharge was 6 days for the opaganib group compared to
7.5 days for the placebo group.
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• 81.8% of opaganib patients achieved a 2-point improvement in the WHO
Ordinal Scale compared to 55.6% of patients in the placebo group – achieved in a median time of 6 days versus 7.5 days, respectively.
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• No significant differences in safety-related measures between the two
groups (with diarrhea being the main treatment-emergent difference in tolerability) were observed.
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Opaganib was originally developed by U.S.-based Apogee Biotechnology Corp. (“Apogee”) and completed multiple successful preclinical studies in oncology, inflammation, GI, and radioprotection models, as well as
a Phase 1 clinical trial in cancer patients with advanced solid tumors and an additional Phase 1 trial in multiple myeloma.
Opaganib received orphan drug designation from the FDA for the treatment of cholangiocarcinoma and is also being evaluated in a Phase 2a trial in advanced cholangiocarcinoma and in a Phase 2 trial in prostate
cancer.
Preclinical data have demonstrated both anti-inflammatory and antiviral activities of opaganib, demonstrating the potential to reduce inflammatory lung disorders, such as pneumonia, and mitigate pulmonary
fibrotic damage. Opaganib demonstrated potent antiviral activity against SARS-CoV-2, the virus that causes COVID-19, completely inhibiting viral replication in an in vitro model of human lung bronchial tissue. Additionally, preclinical in vivo studies have demonstrated that opaganib decreased fatality rates from influenza virus infection and ameliorated Pseudomonas aeruginosa-induced lung injury by reducing the levels of IL-6 and
TNF-alpha in bronchoalveolar lavage fluids.
In June 2021, we announced that preliminary results from a preclinical study with opaganib demonstrate potent inhibition of COVID-19 variants of concern by
opaganib. Working with the University of Louisville Center for Predictive Medicine, opaganib was studied in a 3D tissue model of human bronchial epithelial cells (EpiAirway™) to evaluate the in vitro efficacy
of opaganib in inhibiting the Beta (South African) and Gamma (Brazilian) SARS-CoV-2 variants. Preliminary results showed potent inhibition of both the Beta and Gamma variants by opaganib at non-cytotoxic doses. Based on opaganib’s unique host-targeted mechanism and the preliminary results of this study, we
believe opaganib is likely to also maintain its activity against emerging variants, including the Delta and Delta Plus variants.
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Under a compassionate use program, seven COVID-19 patients (as classified by the WHO ordinal scale) were treated with opaganib in a leading hospital in Israel. Analysis of treatment outcomes from the five
patients included in the final published analysis suggested substantial benefit to patients treated with opaganib under compassionate use in both clinical outcomes and inflammatory markers as compared to a retrospective matched case-control
group from the same hospital. All patients in the opaganib-treated group were discharged from hospital on room air without requiring intubation and mechanical ventilation, whereas 33% of the matched case-control group required intubation and
mechanical ventilation. Median time to weaning from high-flow nasal cannula was reduced to 10 days in the opaganib-treated group, as compared to 15 days in the matched case-control group.
The development of opaganib for indications non-related to COVID-19 has been supported by grants and contracts from U.S. federal and state government agencies awarded to Apogee, including from the U.S.
National Cancer Institute (NCI), Biomedical Advanced Research and Development Authority (BARDA), the U.S. Department of Defense and the FDA Office of Orphan Products Development. In September 2020, Apogee was awarded a grant from
Pennsylvania’s COVID-19 Vaccines, Treatments and Therapies Program, which supports the rapid advancement of promising novel COVID-19 therapies.
In May 2021, we announced receipt of a Notice of Allowance for a U.S. patent application covering the use of opaganib for the treatment of COVID-19 with a term
extending until at least 2041. We also previously announced that we had signed collaborations with several U.S., European and Canadian suppliers, including with Cosmo Pharmaceuticals for large-scale ramp-up of opaganib manufacturing,
further strengthening manufacturing capabilities and capacity of opaganib.
In view of the completion of enrollment, treatment and follow up for our global Phase 2/3 clinical trial evaluating opaganib in hospitalized patients with severe
COVID-19 pneumonia, we maintain ongoing discussions with the FDA, EMA and other regulators, on potential pathways to approval for opaganib with a focus on those countries currently most affected by COVID-19. The next steps will be guided by
the results of the global Phase 2/3 trial.
Discussions are also ongoing with potential partners who are interested in the rights to opaganib in various countries.
The regulatory path, including potential submissions of emergency use applications in those countries, is subject to the data generated by the ongoing Phase 2/3
trial, as well as the specific requirements in each country. The strength of the safety and efficacy data generated from the opaganib studies will be key to regulatory applications. Additional studies to support the potential of such
applications and the use or marketing of opaganib are likely to be required. For example, the FDA has indicated we will need to complete additional studies to support applications in the U.S. Evaluations and discussions continue with the
FDA, EMA and regulators in other countries.
Our Approved and Commercial Products in the U.S.
We have established the headquarters of our U.S. commercial operations in Raleigh, North Carolina. Our U.S. operations promote Movantik® for
opioid-induced constipation in adults, Talicia® for the treatment of H. pylori infection in adults and Aemcolo® for the treatment of travelers’ diarrhea in adults. We also
expect our U.S. operations to serve as the platform for potential launch of our proprietary, late-clinical stage therapeutic candidates in the U.S., if approved by the FDA, and potential in-licensed or acquired commercial-stage products
in the U.S.
During 2020, we expanded our sales force from approximately 40 sales representatives to approximately 100 sales representatives. We commercially launched Talicia® in March 2020 and initiated our
commercialization activities for Movantik® in April 2020.
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Movantik®
In April 2020, we acquired from AstraZeneca AB (“AstraZeneca”) worldwide rights (excluding Europe and Canada) to commercialize and develop Movantik® (naloxegol), pursuant to a license agreement,
dated February 23, 2020 (the “AstraZeneca License Agreement”), and in October 2020 we obtained the rights to commercialize and develop Movantik® in Israel. Movantik® is a proprietary once-daily oral peripherally acting
mu-opioid receptor antagonist (PAMORA) approved by the FDA for the treatment of opioid-induced constipation (OIC) in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment
who do not require frequent (e.g. weekly) opioid dosage escalation. We initiated our U.S. commercialization activities for Movantik® in April 2020.
Movantik® received FDA approval on September 16, 2014, for the treatment of OIC in adult patients with chronic non-cancer pain. Its label was later updated to include patients with chronic pain
related to prior cancer or its treatment who do not require frequent (e.g. weekly) opioid dosage escalation. In the AstraZeneca License Agreement, we agreed to assume responsibility for completing any postmarketing requirements or
commitments that may be required to retain approval. Accordingly, we will be required to continue the postmarketing observational epidemiologic study to evaluate the major adverse cardiovascular events (MACE) of Movantik®.
In August 2020, we announced that we had replaced the 2015 Movantik® co-commercialization agreement with Daiichi Sankyo, Inc. (Daiichi Sankyo)
(assigned under the agreement with AstraZeneca), with a new royalty-bearing agreement. Under the terms of the new agreement, we bear all responsibilities and costs for commercializing Movantik® in the U.S. During the term of
the new agreement, we pay Daiichi Sankyo a mid-teen royalty rate on net sales of Movantik® in the U.S., in addition to three annual lump sum payments, starting in the fourth quarter of 2021 and ending in 2023.
In July 2020, we amended the AstraZeneca License Agreement, whereby the parties agreed to postpone the non-contingent payment of $15.0 million by us to December 2021 and to increase the amount due by $0.5
million.
In July 2021, we announced that one of America’s largest payors, serving many Blue Cross and Blue Shield Plans and more than 30 million members, had added Movantik® as a preferred brand with no
restrictions to its National Formulary and as a preferred brand on its other commercial formularies starting July 1, 2021. Movantik®’s total commercial coverage now extends to 152 million American patient lives.
Talicia® (omeprazole,
magnesium, amoxicillin, and rifabutin) delayed-release capsules 10 mg/250 mg/12.5 mg
Talicia® is our proprietary drug approved for marketing in the U.S. for the treatment of H. pylori infection in adults. Talicia® is a combination
of three approved drug products – omeprazole, which is a proton pump inhibitor (prevents the secretion of hydrogen ions necessary for the digestion of food in the stomach), amoxicillin and rifabutin, which are antibiotics. Talicia® is
administered to patients orally.
Talicia® is designed to address the high resistance of H. pylori bacteria to the antibiotics commonly used in current standard-of-care therapies.
Talicia®’s approval was supported, in part, by the results of two positive Phase 3 trials in the U.S. for the treatment of H. pylori-positive adult patients complaining of
epigastric pain and/or discomfort. The confirmatory Phase 3 trial of Talicia® demonstrated 84% eradication of H. pylori infection with Talicia® vs. 58% in the active
comparator arm (p<0.0001). Further, in an analysis of data from this trial, it was observed that subjects with measurable blood levels of drug at visit 3 (approximately day 13) had response rates of 90.3% in the Talicia® arm
vs. 64.7% in the active comparator arm.
We believe that Talicia® may offer a significant benefit over other currently approved drugs in part because of the resistance profile demonstrated in our Phase 3 program, which showed no bacterial
resistance to rifabutin and high resistance to clarithromycin and metronidazole.
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Talicia® is the first product we developed that was approved for marketing in the U.S. Talicia® was approved by the FDA on November 1, 2019, and we launched Talicia® in
the U.S. in March 2020.
In November 2014, Talicia® was granted Qualified Infectious Disease Product (QIDP) designation by the FDA. Under its QIDP designation, Talicia® is
eligible for an additional five years of U.S. market exclusivity, on top of the standard exclusivity period, for a total of eight years of market exclusivity.
In July 2021, we announced that OptumRx, part of the UnitedHealth Group - a leader in healthcare coverage serving more than 26 million Americans, had added Talicia to its Commercial Formulary as an
unrestricted brand for H. pylori treatment, effective July 1, 2021. Patient access to Talicia now extends to greater than 8 out of 10 covered U.S. commercial lives.
Aemcolo®
Aemcolo®, containing 194 mg of rifamycin, is an orally administered, minimally absorbed antibiotic that is delivered to the colon, approved by the FDA in 2018 for the treatment of travelers’
diarrhea caused by non-invasive strains of E. coli in adults (“Travelers’ Diarrhea”). In October 2019, we entered into a license agreement with a wholly-owned subsidiary of Cosmo Pharmaceuticals N.V. (“Cosmo”) pursuant to which we were
granted exclusive rights to commercialize Aemcolo® in the U.S. In December 2019, we launched the commercialization of Aemcolo® in the U.S.
Aemcolo® received FDA approval on November 16, 2018, for the treatment of travelers’ diarrhea caused by noninvasive strains of E. coli in adults. Cosmo
transferred the Aemcolo® New Drug Application (NDA) and the IND to RedHill Biopharma Inc., which were accepted on November 27, 2019. This acceptance also includes a commitment to complete any postmarketing requirements or
commitments related to the NDA. There are two pediatric studies that are required to be completed to satisfy the PREA requirements:
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Conduct a randomized, placebo-controlled study to evaluate the safety, tolerability, and efficacy of Aemcolo® (rifamycin) for the treatment of travelers’ diarrhea in
children from 6 to 11 years of age.
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Conduct a randomized, placebo-controlled study to evaluate the safety, tolerability, and efficacy of Aemcolo® (rifamycin) for the treatment of travelers’ diarrhea in
children from 12 to 17 years of age.
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In October 2017, the FDA granted QIDP and Fast Track designations for Aemcolo®. With the QIDP designation, intended for
antibacterial or antifungal drugs that treat serious or life-threatening infections, together with new chemical entity (NCE) designation, Aemcolo® enjoys marketing exclusivity until 2028. Due to the significant decrease in travel
as a result of the pandemic, the travelers’ diarrhea market has been significantly impacted, and we have not generated meaningful revenues from the sale of Aemcolo®. We do not expect Aemcolo® to generate meaningful
revenues until U.S. international travel returns to pre-COVID-19 pandemic levels, if at all, and there can be no assurance that we will generate meaningful revenues upon return of U.S. international travel to pre-pandemic levels.
RedHill has implemented plans, including re-launching active field promotion of Aemcolo®, to support, and build on, the initial momentum that
Aemcolo® was generating pre-COVID-19 travel restrictions.
We continue to pursue the acquisition of additional commercial products, including, without limitation, through licensing or promotion
transaction, asset purchase, joint venture with, acquisition of, or merger with or other business combination with, companies with rights to commercial GI and other relevant assets and are continuously working to expand U.S.-managed care
access and coverage to our commercial products, where appropriate. We plan to pursue such opportunities in the U.S. and, if available, in other jurisdictions; however, we intend to focus our commercial activities in the U.S.
8
Recent Developments on our Therapeutic Product Candidates
RHB‑204
RHB‑204 is a patented fixed-dose oral capsule containing a combination of three antibiotics developed for the treatment of pulmonary Mycobacterium avium Complex (MAC) disease in adults with nodular
bronchiectasis (also referred to hereafter as pulmonary nontuberculous mycobacteria (NTM) disease caused by MAC). Each capsule contains clarithromycin, clofazimine, and rifabutin, at doses distinct from RHB‑104.
In November 2020, we initiated our Phase 3 trial to evaluate the efficacy and safety of RHB-204 in adults with pulmonary NTM disease caused by MAC infection. This multi-center, randomized, double-blind,
two-part, placebo-controlled, parallel-group Phase 3 trial is planned to be conducted at up to 40 sites across the U.S. Study endpoints include sputum culture conversion at month six of treatment with RHB-204, compared to placebo
and Quality of Life questionnaire, including improvements in physical functioning, respiratory symptoms and fatigue. An interim sample size re-estimate is planned once the study reaches approximately 50% enrollment.
In January 2017, we announced that RHB‑204 had been granted QIDP designation by the FDA for the treatment of pulmonary NTM disease, including eligibility for Priority Review, Accelerated Approval and an
extended market exclusivity period, if approved for marketing in the U.S. In October 2020, we announced that the FDA granted RHB-204 Orphan Drug designation which together with the QIDP designation will extend U.S. market
exclusivity to a total of 12 years, if RHB-204 is approved by the FDA. In January 2021, we announced that the FDA granted RHB-204 Fast Track designation, allowing RedHill access to early and frequent communications with the FDA, to
expedite the RHB-204 development program, and to a rolling review of an NDA.
RHB-107
RHB-107 (formerly Mesupron) (INN: upamostat) is a proprietary, first-in-class, orally-administered potent inhibitor of several serine proteases. We are developing this investigational new drug as a
potential treatment for symptomatic COVID-19 patients that do not require hospitalization. In addition, we believe RHB-107 has potential in targeting cancer, inflammatory lung diseases and gastrointestinal diseases. In November
2020, we announced that the FDA had cleared our IND application for a U.S. Phase 2/3 trial evaluating RHB-107 in non-hospitalized patients with symptomatic COVID-19 who do not require supplemental oxygen. In December 2020, we
submitted an amendment to the protocol for that trial, addressing FDA comments. In February 2021, we announced that the first patient had been dosed in the trial. This multicenter, randomized, double-blind, placebo-controlled,
parallel-group trial will evaluate the safety and efficacy of RHB-107. The first part of the trial is designed for dose selection and is planned to enroll 60 patients. The second part of the trial is planned to enroll 250 patients
and will evaluate time to sustained recovery from illness as the primary endpoint. Each patient will be tested for specific viral strain. Several secondary and exploratory endpoints will also be assessed.
In May 2021, we announced the receipt of a notice of allowance from the USPTO covering RHB-107 as a method for the treatment of COVID-19
caused by the SARS-CoV-2 virus.
Expanded Access Program (EAP)
We have adopted an Expanded Access Program (“EAP”), allowing patients with life-threatening diseases potential access to our investigational new drugs that
have not yet received regulatory marketing approval. Expanded access (sometimes referred to as “compassionate use”) is possible outside of our clinical trials, under certain eligibility criteria, when a certain investigational new
drug is needed to treat a life-threatening condition and when there is some clinical evidence suggesting that the drug might be effective for that condition. Patients who qualify for our EAP do not meet the eligibility criteria or are
incapable of participating in our clinical trials for such therapeutic candidates or there is no clinical trial accessible to such patients. Following the adoption of the program, we continue to receive patient requests to obtain
access to our investigational drugs. Subject to the evaluation of eligibility and all other necessary regulatory, reporting and other conditions and approvals required in all relevant jurisdictions, we provide certain patients with an
investigational new drug under the EAP.
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January 2021 Underwritten Offering
On January 14, 2021, we closed an underwritten offering of 3,188,776 ADSs at a public offering price of $7.84 per ADS, for total net proceeds of approximately $23.1 million, after deducting
underwriting discounts and commissions and approximated offering expenses payable by us in connection with the offering.
March 2021 Underwritten Offering
On March 4, 2021, we closed an underwritten offering of 4,375,000 ADSs at a public offering price of $8.00 per ADS, for total net proceeds of approximately $32.8 million, after deducting underwriting
discounts and commissions and approximated offering expenses payable by us in connection with the offering. On March 11, 2021, and on March 16, 2021, the underwriter exercised its overallotment option and accordingly we issued an
additional 272,433 ADSs for total net proceeds of approximately $2.0 million, after deducting underwriting discounts and commissions.
Recent Developments
In March 2021 we announced that RedHill Biopharma Inc., AstraZeneca AB and AstraZenca Pharmaceuticals LP and Nektar Therapeutics entered into a settlement and license agreement with MSN Pharmaceuticals, Inc.
and MSN Laboratories PVT. LTD. (“MSN”) resolving their patent litigation in the U.S. in response to MSN’s Abbreviated New Drug Application (“ANDA”) seeking approval by the US. FDA to market a generic version of Movantik®. Under
the terms of the settlement agreement, MSN may not sell a generic version of Movantik® in the U.S. until October 1, 2030 (subject to U.S. FDA approval) or earlier under certain circumstances. The parties to the settlement
agreement have also agreed to file a stipulation and order of dismissal with the U.S. District Court for the District of Delaware which will conclude this litigation with respect to MSN. As required by law, the parties will submit the
settlement agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review. The settlement with MSN did not end RedHill’s ongoing litigation against the other two ANDA filers.
In July 2021, we announced that RedHill Biopharma Inc., AstraZeneca AB and AstraZeneca Pharmaceuticals LP and Nektar Therapeutics have entered into a settlement and license agreement with Apotex, Inc. and
Apotex Corp. (“Apotex”) resolving their patent litigation in the U.S. in response to Apotex’s Abbreviated New Drug Application (“ANDA”) seeking approval by the US. FDA to market a generic version of Movantik®. Under the terms
of the settlement agreement, Apotex may not sell a generic version of Movantik® in the U.S. until October 1, 2030 (subject to U.S. FDA approval) or earlier under certain circumstances. The parties to the settlement agreement
also agreed to file a stipulation and order of dismissal with the U.S. District Court for the District of Delaware which will conclude this litigation with respect to Apotex. As required by law, the parties will submit the settlement
agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review. The settlement with Apotex did not end RedHill’s ongoing litigation against the other one ANDA filer.
Corporate Information
We were incorporated as a limited liability company under the laws of the State of Israel on August 3, 2009. Our principal executive offices are located at 21 Ha’arba’a Street, Tel-Aviv, Israel and our
telephone number is +972 (3) 541-3131. Our web site address is http://www.redhillbio.com. The information on, or that can be accessed through, our web site does not constitute part of this prospectus. Our registered agent in the U.S.
is RedHill Biopharma Inc. The address of RedHill Biopharma Inc. is 8045 Arco Corporate Drive, Suite 200, Raleigh, NC 27617.
10
THE OFFERING
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ADSs offered by us in the offering
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ADSs, each ADS representing 10 Ordinary Shares, par value NIS 0.01 per share, having an aggregate offering price of up to $100.0 million.
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The ADSs
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Each ADS represents 10 Ordinary Shares. The ADSs initially will be delivered by The Bank of New York Mellon, as depositary (the “Depositary”).
The Depositary, as depositary, or its nominee, will be the holder of the Ordinary Shares underlying your ADSs and you will have rights as provided in the Deposit Agreement, dated as
of December 26, 2012, among us, the Depositary and all owners and holders from time to time of ADSs issued thereunder (the “Deposit Agreement”), a form of which has been filed as Exhibit 1 to the Registration Statement on Form F-6
filed by the Depositary with the SEC on December 6, 2012.
Subject to the terms of the Deposit Agreement and in compliance with the relevant requirements set out in the prospectus, you may turn in your ADSs to the Depositary for cancellation
and withdrawal of the Ordinary Shares underlying your ADSs.
The Depositary will charge you fees for such cancellations pursuant to the Deposit Agreement.
You should carefully read the “Description of American Depositary Shares” section of the accompanying base prospectus and the Deposit Agreement to better understand the terms of the
ADSs.
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Manner of Offering
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“At the market” offering that may be made from time to time through our sales agents, SVB Leerink and Cantor. See “Plan of Distribution.”
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Use of Proceeds
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We intend to use the net proceeds from the offering, together with our existing cash and cash equivalents, to fund our clinical development programs, commercialization activities and
for acquisitions and general corporate purposes. See “Use of Proceeds.”
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Listing
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The ADSs are listed on the Nasdaq Global Market under the symbol “RDHL”.
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Risk Factors
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Before deciding to invest in the ADSs, you should carefully consider the risks related to our business, the offering and our securities. See “Risk Factors” on page 12 of this
prospectus and under similar headings in other documents incorporated by reference into this prospectus and the accompanying base prospectus.
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Depositary
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The Bank of New York Mellon
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You should carefully consider the risks described below and the risk factors in our annual report on Form 20-F for the year ended December 31, 2020, as well as the other
information included or incorporated by reference in this prospectus and the accompanying base prospectus, including our financial statements and the related notes, before you decide to buy our securities. The risks and uncertainties described below
and incorporated by reference in this prospectus are not the only risks facing us. We may face additional risks and uncertainties not currently known to us or that we currently deem to be immaterial. Any of the risks described below or incorporated
by reference in this prospectus, and any such additional risks, could materially adversely affect our business, financial condition or results of operations. In such case, you may lose all or part of your original investment.
Risks Related to the Offering
We will have broad discretion in how to use the net proceeds of this offering, and we may not use these proceeds in a manner desired by our investors.
We will have broad discretion as to the use of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of this
offering. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity as part of your investment decision to assess whether the proceeds are being used
appropriately. Our needs may change as the business and the industry that we address evolves. As a result, the proceeds to be received in this offering may be used in a manner significantly different from our current expectations. It is possible
that the proceeds will be invested in a way that does not yield a favorable, or any, return. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results
and cash flow.
It is not possible to predict the number of ADSs sold under the Sales Agreement.
Subject to certain limitations in the Sales Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Sales Agents at any time
throughout the term of the Sales Agreement. The number of ADSs that are sold through the Sales Agents after our delivery of a placement notice will fluctuate based on a number of factors, including the market price of the ADSs during the sales
period, any limits we may set with the Sales Agents in any applicable placement notice and the demand for the ADSs.
The ADSs offered hereby will be sold in "at-the-market offerings" and investors who buy ADSs at different times will likely pay different prices.
Investors who purchase ADSs in this offering at different times likely will pay different prices, and accordingly may experience different levels of dilution and different outcomes
in their investment results. We will have discretion, subject to market demand, to vary the timing, prices and number of ADSs sold in this offering. In addition, subject to the final determination by our board of directors or any restrictions we may
place in any applicable placement notice, there is no minimum or maximum sales price for ADSs to be sold in this offering. Investors may experience a decline in the value of the ADSs they purchase in this offering as a result of sales made at prices
lower than the prices they paid.
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You will experience immediate and substantial dilution in the book value per ADS you purchase.
The offering price per ADS in this offering may exceed the net tangible book value per ADS outstanding prior to this offering. Assuming that an aggregate of 15,105,740 ADSs are sold during
the term of the Sales Agreement with the Sales Agents, at a price of $6.61 per ADS (the last reported sale price of the ADSs on the Nasdaq on July 28, 2021), for aggregate gross proceeds of approximately $100.0 million, and after deducting
commissions and estimated offering expenses payable by us, purchasers in this offering will experience immediate and substantial dilution of $5.18 per ADS, representing the difference between the assumed offering price per share and our as
adjusted net tangible book value per share as of March 31, 2021, after giving effect to this offering. If holders of outstanding options exercise those options at prices below the price you pay, you will experience further dilution. See the
section titled “Dilution” below for a more detailed illustration of the dilution you would incur if you participate in this offering. Because the sales of the ADSs offered hereby will be made directly into the market, the prices at which we
sell these ADSs will vary and these variations may be significant. Purchasers of the ADSs we sell, as well as our existing shareholders, will experience significant dilution if we sell ADSs at prices significantly below the price at which
they invested.
ADSs representing a substantial percentage of our outstanding shares may be sold in this offering and such ADSs will be freely tradable, which could cause the price of the
ADSs to decline.
A substantial number of the ADSs may be sold in the public market in this offering, and all of the ADSs sold in the offering will be freely tradable without restriction or
further registration under the Securities Act. These sales, and any future sales of a substantial number of ADSs in the public market, or the perception that such sales may occur, may cause the market price of the ADSs to decline. This could make
it more difficult for you to sell your ADSs at a time and price that you deem appropriate and could impair our ability to raise capital through the sale of additional equity securities.
You may experience future dilution as a result of future equity offerings.
To raise additional capital, we may in the future offer additional ADSs, Ordinary Shares or other securities convertible into or exchangeable for the ADSs or our Ordinary Shares
at prices that may not be the same as the price per share in this offering. We may sell ADSs, Ordinary Shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering,
and investors purchasing shares or other securities in the future could have rights superior to the rights of ADSs holders. The price per share at which we sell additional ADSs, Ordinary Shares or securities convertible or exchangeable into ADSs or
Ordinary Shares, in future transactions may be higher or lower than the price per ADS paid by investors in this offering.
13
We may sell ADSs from time to time having aggregate sales proceeds of up to $100.0 million. Because there is no minimum offering amount required as a condition of this offering,
the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will be able to sell any ADSs under or fully utilize the Sales Agreement with the Sales Agents as
a source of financing.
We intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, to fund our clinical development programs, commercialization
activities and for acquisitions and general corporate purposes.
The amounts and timing of our actual expenditures will depend upon numerous factors, including the progress of our development and commercialization efforts, the status of and
results from our clinical, non-clinical or pre-clinical trials, whether or not we enter into strategic collaborations or partnerships, and our operating costs and expenditures. Accordingly, our management will have significant flexibility in applying
the net proceeds of this offering. In addition, while we have not entered into any outstanding binding agreements or commitments relating to any significant transaction as of the date of this prospectus, we may use a portion of the net proceeds to
pursue acquisitions, joint ventures, and other strategic transactions.
14
If you invest in the ADSs, your interest will be diluted immediately to the extent of the difference between the price per ADS you pay in this offering and our as-adjusted net tangible book value per
ADS after giving effect to this offering.
Our net tangible book value as of March 31, 2021, was approximately $(8.56) million, or approximately $(0.18) per ADS. Net tangible book value represents the amount of our total tangible assets minus total liabilities,
net of leases presented as right-of-use assets, lease liabilities and payable in respect of intangible assets purchase.
After giving effect to the assumed sale of 15,128,593 ADSs at an assumed offering price of $6.61 per ADS (the last reported sale price of the ADSs on the Nasdaq on July 28, 2021), for aggregate gross proceeds of
approximately $100.0 million, and after deducting commissions and estimated offering expenses payable by us, our as-adjusted net tangible book value as of March 31, 2021, would have been approximately $88.26 million, or $1.43 per ADS. This
represents an immediate increase in net tangible book value of $1.61 per ADS to our existing shareholders and an immediate dilution in net tangible book value of approximately $5.18 per ADS to purchasers of the ADSs, as illustrated by the
following table:
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Assumed offering price per ADS
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$
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6.61
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||||||
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||||||||
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Net tangible book value per ADS as of March 31, 2021
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$
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(0.18
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)
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|||||
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||||||||
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Increase in net tangible book value per ADS attributable to investors purchasing ADSs in this offering
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$
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1.61
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||||||
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||||||||
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As-adjusted net tangible book value per ADS as of March 31, 2021, after giving effect to this offering
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$
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1.43
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||||||
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||||||||
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Dilution per ADS to investors purchasing ADSs in this offering
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$
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5.18
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||||||
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||||||||
The number of Ordinary Shares to be outstanding after this offering is based on 466,673,384 Ordinary Shares outstanding as of March 31, 2021 and excludes as of such date 49,052,730 Ordinary Shares issuable upon the
exercise of outstanding options to purchase 49,052,730 Ordinary Shares at a weighted average exercise price of $0.92 per share (equivalent to 4,905,273 ADSs at a weighted average exercise price of $9.20 per ADS. Following an option exchange offer
which closed in May 2021, the weighted average exercise price of the options outstanding as of March 31, 2021, was reduced to $6.35 per ADS.
An increase of $1.00 per ADS in the price at which the ADSs are sold from the assumed offering price per ADS shown in the table above, assuming all of the ADSs in the aggregate amount of approximately $100.0 million
during the term of the Sales Agreement with the Sales Agents is sold at that price, would increase our as adjusted net tangible book value per ADS to $1.48 per ADS and would increase the dilution in net tangible book value per ADS to investors
purchasing ADSs in this offering to $6.13 per ADS, after deducting commissions and estimated offering expenses payable by us. A decrease of $1.00 per ADS in the price at which the ADSs are sold from the assumed offering price per share shown in
the table above, assuming all of the ADSs in the aggregate amount of approximately $100.0 million during the term of the Sales Agreement with the Sales Agents is sold at that price, would decrease our as adjusted net tangible book value per ADS
to $1.37 per share and would decrease the dilution in net tangible book value per ADS to investors purchasing ADSs in this offering to $4.24 per ADS, after deducting commissions and estimated offering expenses payable by us.
The as-adjusted information discussed above is illustrative only. Our net tangible book value following the completion of the offering is subject to further adjustment based on the actual offering
price of the ADSs and other terms of this offering determined at pricing.
15
Israeli Tax Considerations
General
The following is a summary of the material tax consequences under Israeli law concerning the purchase, ownership and disposition of our Ordinary Shares or American Depositary Shares (collectively,
the “Shares”).
This discussion does not purport to constitute a complete analysis of all potential tax consequences applicable to investors upon purchasing, owning or disposing of our Shares. In particular, this
discussion does not take into account the specific circumstances of any particular investor (such as tax-exempt entities, financial institutions, certain financial companies, broker-dealers, investors that own, directly or indirectly, 10% or more
of our outstanding voting rights, all of whom are subject to special tax regimes not covered under this discussion). To the extent that issues discussed herein are based on legislation that has yet to be subject to judicial or administrative
interpretation, there can be no assurance that the views expressed herein will accord with any such interpretation in the future.
Potential investors are urged to consult their own tax advisors as to the Israeli or other tax consequences of the purchase, ownership, and disposition of the Shares, including, in particular, the
effect of any foreign, state or local taxes.
General Corporate Tax Structure in Israel
Israeli companies are generally subject to corporate tax on their taxable income at the rate of 23% for the 2021 tax year.
Taxation of Shareholders
Capital Gains
Capital gains tax is imposed on the disposition of capital assets by an Israeli resident and on the disposition of such assets by a non-Israeli resident if those assets are either (i) located in
Israel; (ii) are shares or a right to a share in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located in Israel, unless an exemption is available or unless an applicable double tax treaty between
Israel and the seller’s country of residence provides otherwise. The Israeli Income Tax Ordinance distinguishes between “Real Gain” and the “Inflationary Surplus”. “Real Gain” is the excess of the total capital gain over Inflationary Surplus
generally computed on the basis of the increase in the Israeli Consumer Price Index between the date of purchase and the date of disposition. Inflationary Surplus is not subject to tax.
Real Gain accrued by individuals on the sale of the Shares will be taxed at the rate of 25%. However, if the individual shareholder is a “Controlling Shareholder” (i.e., a person who holds,
directly or indirectly, alone or together with another, 10% or more of one of the Israeli resident company’s means of control) at the time of sale or at any time during the preceding 12-month period, such gain will be taxed at the rate of 30%.
Corporate and individual shareholders dealing in securities in Israel are taxed at the tax rates applicable to business income (23% in 2019 and thereafter), and a marginal tax rate of up to 50% in
2021 for individuals, including an excess tax (as discussed below).
Notwithstanding the foregoing, capital gains generated from the sale of our Shares by a non-Israeli shareholder may be exempt from Israeli tax under the Israeli Income Tax Ordinance provided that
the following cumulative conditions are met: (i) the Shares were purchased upon or after the registration of the Shares on the stock exchange (this condition may not apply to shares purchased on or after January 1, 2009) and (ii) the seller does
not have a permanent establishment in Israel to which the generated capital gain is attributed. However, non-Israeli resident corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a 25% or more interest in such
non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the income or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption would not be available to a person whose
gains from selling or otherwise disposing of the securities are deemed to be business income.
16
In addition, the sale of the Shares may be exempt from Israeli capital gains tax under the provisions of an applicable double tax treaty. For example, the Convention Between the Government of the
United States of America and the Government of the State of Israel with Respect to Taxes on Income, or the U.S.-Israel Double Tax Treaty, exempts a U.S. resident (for purposes of the U.S.-Israel Double Tax Treaty) from Israeli capital gain tax in
connection with the sale of the Shares, provided that: (i) the U.S. resident owned, directly or indirectly, less than 10% of the voting power of the company at any time within the 12-month period preceding such sale; (ii) the U.S. resident, being
an individual, is present in Israel for a period or periods of less than 183 days during the taxable year; and (iii) the capital gain from the sale was not derived through a permanent establishment of the U.S. resident in Israel; however, under the
U.S.-Israel Double Tax Treaty, the taxpayer would be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations under U.S. law applicable to
foreign tax credits. The U.S.-Israel Double Tax Treaty does not relate to U.S. state or local taxes.
Payers of consideration for the Ordinary Shares, including the purchaser, the Israeli stockbroker or the financial institution through which the Shares are held, are obligated, subject to certain exemptions, to
withhold tax upon the sale of Shares at a rate of 25% of the consideration for individuals and corporations.
Upon the sale of traded securities, a detailed return, including a computation of the tax due, must be filed and an advance payment must be paid to the Israeli Tax Authority on January 31 and July
31 of every tax year in respect of sales of traded securities made within the previous six months. However, if all tax due was withheld at source according to applicable provisions of the Israeli Income Tax Ordinance and regulations promulgated
thereunder, such return need not be filed, and no advance payment must be paid. Capital gains are also reportable on annual income tax returns.
Dividends
Dividends distributed by a company to a shareholder who is an Israeli resident individual will generally be subject to income tax at a rate of 25%. However, a 30% tax rate will apply if the
dividend recipient is a Controlling Shareholder, as defined above, at the time of distribution or at any time during the preceding 12-month period. If the recipient of the dividend is an Israeli resident corporation, such dividend will generally be
exempt from Israeli income tax provided that the income from which such dividend is distributed, derived or accrued within Israel.
Dividends distributed by an Israeli resident company to a non-Israeli resident (either an individual or a corporation) are generally subject to Israeli withholding tax on the receipt of such dividends at the rate
of 25% (30% if the dividend recipient is a Controlling Shareholder at the time of distribution or at any time during the preceding 12-month period). These rates may be reduced under the provisions of an applicable double tax treaty. For
example, under the U.S.-Israel Double Tax Treaty, the following tax rates will apply in respect of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation that holds during that portion
of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10% of the outstanding shares of the voting stock of the Israeli resident paying corporation and not more
than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain types of interest or dividends the tax rate is 12.5%; (ii) if both the conditions mentioned in clause (i) above are
met and the dividend is paid from an Israeli resident company’s income which was entitled to a reduced tax rate under The Law for the Encouragement of Capital Investments, 1959, the tax rate is 15%; and (iii) in all other cases, the tax rate is
25%. The aforementioned rates under the U.S.-Israel Double Tax Treaty will not apply if the dividend income is attributed to a permanent establishment of the U.S. resident in Israel.
17
Excess Tax
Individual holders who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) and who have taxable income that exceeds a certain threshold in a
tax year ((NIS 647,640 for 2021, linked to the Israeli Consumer Price Index) will be subject to an additional tax at the rate of 3% on his or her taxable income for such tax year that is in excess of such amount. For this purpose, taxable income
includes taxable capital gains from the sale of securities and taxable income from interest and dividends, subject to the provisions of an applicable double tax treaty.
Estate and Gift Tax
Israel does not currently impose estate or gift taxes if the Israeli Tax Authority is satisfied that the gift was made in good faith and on condition that the recipient of the gift is not a
non-Israeli resident.
Foreign Exchange Regulations
Non-residents of Israel who hold our Shares are able to receive any dividends, and any amounts payable upon the dissolution, liquidation and winding up of our affairs, repayable in non-Israeli
currency at the rate of exchange prevailing at the time of conversion. However, Israeli income tax is generally required to have been paid or withheld on these amounts. In addition, the statutory framework for the potential imposition of currency
exchange control has not been eliminated and may be restored at any time by administrative action.
U.S. Federal Income Tax Considerations
The following is a summary of the material U.S. federal income tax consequences relating to the ownership and disposition of our Ordinary Shares and ADSs by U.S. Holders, as defined below. This
summary addresses solely U.S. Holders who acquire ADSs pursuant to this offering and who hold Ordinary Shares or ADSs, as applicable, as capital assets for tax purposes. This summary is based on current provisions of the Internal Revenue Code of
1986, as amended (the “Code”), current and proposed U.S. Treasury regulations promulgated thereunder, and administrative and judicial decisions as of the date hereof, all of which are subject to change, possibly on a retroactive basis. In addition,
this section is based in part upon representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms. This summary does not address all U.S.
federal income tax matters that may be relevant to a particular holder or all tax considerations that may be relevant with respect to an investment in our Ordinary Shares or ADSs.
This summary does not address tax considerations applicable to a holder of our Ordinary Shares or ADSs that may be subject to special tax rules including, without limitation, the following:
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dealers or traders in securities, currencies or notional principal contracts;
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•
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banks, insurance companies and other financial institutions;
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real estate investment trusts;
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persons subject to the alternative minimum tax;
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tax-exempt organizations;
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traders that have elected mark-to-market accounting;
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corporations that accumulate earnings to avoid U.S. tax;
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pension plans;
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investors that hold the Ordinary Shares or ADSs as part of a “straddle,” “hedge,” or “conversion transaction” with other investments;
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regulated investment companies;
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persons that actually or constructively own 10 percent or more of our shares by vote or by value;
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persons that are treated as partnerships or other pass-through entities for U.S. federal income purposes and persons who hold the Ordinary Shares or ADSs through partnerships or other
pass-through entities; and
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persons whose functional currency is not U.S. dollars.
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18
This summary does not address the effect of any U.S. federal taxation other than U.S. federal income taxation. In addition, this summary does not include any discussion of state, local, or foreign
tax consequences to a holder of our Ordinary Shares or ADSs.
You are urged to consult your own tax advisor regarding the foreign and U.S. federal, state, and local and other tax consequences of an investment in Ordinary Shares or ADSs.
For purposes of this summary, a “U.S. Holder” means a beneficial owner of an Ordinary Share or ADS that is for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the U.S.;
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a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the U.S. or under the laws of the U.S., any state thereof, or the
District of Columbia;
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an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
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a trust (1) if (a) a court within the U.S. is able to exercise primary supervision over the administration of the trust and (b) one or more U.S. persons have the authority to control all
substantial decisions of the trust or (2) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
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If an entity or arrangement that is classified as a partnership for U.S. federal tax purposes holds Ordinary Shares or ADSs, the U.S. federal tax treatment of its partners will generally depend upon
the status of the partners and the activities of the partnership. Entities or arrangements that are classified as partnerships for U.S. federal tax purposes and persons holding Ordinary Shares or ADSs through such entities should consult their own
tax advisors.
In general, if you hold ADSs, you will be treated as the holder of the underlying Ordinary Shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, gain or loss generally
will not be recognized if you exchange ADSs for the underlying Ordinary Shares represented by those ADSs.
Distributions
Subject to the discussion under “—Passive Foreign Investment Companies” below, the gross amount of any distribution, including the amount of any Israeli taxes withheld from such distribution, see “Material Tax
Considerations—Israeli Tax Considerations,” actually or constructively received by a U.S. Holder with respect to an Ordinary Share (or, in the case of an ADS, received by the depositary) will be taxable to the U.S. Holder as foreign-source dividend
income to the extent of our current and accumulated earnings and profits as determined under U.S. federal income tax principles. The U.S. Holder will not be eligible for any dividends received deduction in respect of the dividends paid by us.
Distributions in excess of earnings and profits will be non-taxable to the U.S. Holder to the extent of the U.S. Holder’s adjusted tax basis in its Ordinary Share or ADS. Distributions in excess of such adjusted tax basis will generally be taxable
to the U.S. Holder as capital gain from the sale or exchange of property as described below under “—Sale or Other Disposition of Ordinary Shares or ADSs.” If we do not report to a U.S. Holder the portion of a distribution that exceeds earnings and
profits, then the distribution will generally be taxable as a dividend. The amount of any distribution of property other than cash will be the fair market value of that property on the date of distribution.
Under the Code, certain qualified dividends received by non-corporate U.S. Holders will be subject to U.S. federal income tax at the preferential long-term capital gains of, currently, a maximum of
20%. This preferential income tax rate is applicable only to dividends paid by a “qualified foreign corporation” that is not a PFIC for the year in which the dividend is paid or for the preceding taxable year, and only with respect to Ordinary Shares
or ADSs held by a qualified U.S. Holder (i.e., a non-corporate holder) for a minimum holding period (generally 61 days during the 121-day period beginning 60 days before the ex-dividend date). Dividends we pay with respect to the Ordinary Shares or
ADSs generally will be qualified dividend income provided that, in the year that the U.S. Holder receives the dividend, either (a) we are eligible for the benefits under the U.S.-Israel Double Tax Treaty or (b) the Ordinary Shares or ADSs are readily
tradable on an established securities market in the U.S. However, if we were a PFIC, dividends paid by us to individual U.S. Holders may not be eligible for the reduced income tax rate applicable to qualified dividends. As discussed below in
“—Passive Foreign Investment Companies,” we do not anticipate being treated as a PFIC for this year; however, there can be no assurance that we will not be treated as a PFIC for our current taxable or future taxable years. You should consult your own
tax advisor regarding the availability of this preferential tax rate under your particular circumstances.
19
The amount of any distribution paid in a currency other than U.S. dollars (a “foreign currency”), including the amount of any withholding tax thereon, will be included in the gross income of a U.S.
Holder in an amount equal to the U.S. dollar value of the foreign currency calculated by reference to the exchange rate in effect on the date of the U.S. Holder’s (or, in the case of ADSs, the depositary’s) receipt of the dividend, regardless of
whether the foreign currency is converted into U.S. dollars. If the foreign currency is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize a foreign currency gain or loss in respect of the
dividend. If the foreign currency received in the distribution is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss
on a subsequent conversion or other disposition of the foreign currency will be treated as U.S. source ordinary income or loss.
Subject to certain conditions and limitations, any Israeli taxes withheld on dividends may be creditable against a U.S. Holder’s U.S. federal income tax liability, subject to generally applicable
limitations. The rules relating to foreign tax credits and the timing thereof are complex. You should consult your own tax advisors regarding the availability of a foreign tax credit in your particular situation.
Sale or Other Disposition of Ordinary Shares or ADSs
Subject to the discussion under “—Passive Foreign Investment Companies” below, a U.S. Holder that sells or otherwise disposes of its Ordinary Shares or ADSs will recognize gain or loss for U.S. federal income tax
purposes in an amount equal to the difference between the amount realized on the sale or other disposition and such U.S. Holder’s adjusted basis in the Ordinary Shares or ADSs. Such gain or loss generally will be capital gain or loss and will be a
long-term capital gain or loss if the U.S. Holder’s holding period of the Ordinary Shares or ADSs exceeds one year at the time of the sale or other disposition. Long-term capital gains realized by non-corporate U.S. Holders are generally subject to
a preferential U.S. federal income tax rate. In general, gain or loss recognized by a U.S. Holder on the sale or other disposition or our Ordinary Shares or ADSs will be U.S. source gain or loss for purposes of the foreign tax credit limitation.
However, if we were a PFIC, any such gain would be subject to the PFIC rules, as discussed below, rather than being taxed as a capital gain. As discussed below in “—Passive Foreign Investment Companies,” we do not anticipate being a PFIC for this
year; however, there can be no assurance that we will not be treated as a PFIC for our current taxable year and future taxable years.
If a U.S. Holder receives foreign currency upon a sale or exchange of Ordinary Shares or ADSs, gain or loss will be recognized in the manner described above under “—Distributions.” However, if such
foreign currency is converted into U.S. dollars on the date received by the U.S. Holder, the U.S. Holder generally should not be required to recognize any foreign currency gain or loss on such conversion.
As discussed above under the heading “Material Tax Considerations—Israeli Tax Considerations—Taxation of Shareholders,” a U.S. Holder who holds Ordinary Shares or ADSs through an Israeli broker or
other Israeli intermediary may be subject to Israeli withholding tax on any capital gains recognized on a sale or other disposition of the Ordinary Shares or ADSs if the U.S. Holder does not obtain approval of an exemption from the Israeli Tax
Authorities or does not claim any allowable refunds or reductions. U.S. Holders are advised that any Israeli tax paid under circumstances in which an exemption from (or a refund of or a reduction in) such tax was available will not be creditable for
U.S. federal income tax purposes. U.S. Holders are advised to consult their Israeli broker or intermediary regarding the procedures for obtaining an exemption or reduction.
20
Medicare Tax on Unearned Income
Certain U.S. Holders that are individuals, estates or trusts are required to pay an additional 3.8% tax on their net investment income, which includes dividends paid on the Ordinary Shares or ADSs
and capital gains from the sale or other disposition of the Ordinary Shares or ADSs.
Passive Foreign Investment Companies
Although we do not anticipate being treated as a PFIC for this year, it is possible that based on the value and composition of our assets, that we may be treated as a PFIC for U.S. federal income tax
purposes for our current taxable year or future taxable years. A non-U.S. corporation is considered a PFIC for any taxable year if either:
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at least 75% of its gross income for such taxable year is passive income; or
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at least 50% of the value of its assets (based on an average of the fair market values of the assets determined at the end of each quarter during a taxable year) is attributable to assets
that produce or are held for the production of passive income.
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For purposes of the above calculations, if a non-U.S. corporation owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, it will be treated as
if it (a) held a proportionate share of the assets of such other corporation and (b) received a proportionate share of the income of such other corporation directly. Passive income generally includes, among other things, dividends, interest, rents,
royalties and certain capital gain, but generally excludes rents and royalties that are derived in the active conduct of a trade or business and which are received from a person other than a related person.
A separate determination must be made each taxable year as to whether we are a PFIC (after the close of each such taxable year). Because the value of our assets for purposes of the asset test will
generally be determined by reference to the market price of the Ordinary Shares or ADSs, our PFIC status will depend in large part on the market price of the Ordinary Shares or ADSs, which may fluctuate significantly.
If we are a PFIC for any year during which a U.S. Holder holds Ordinary Shares or ADSs, such Ordinary Shares or ADSs generally will continue to be treated as Ordinary Shares or ADSs in a PFIC with
respect to such U.S. Holder for all succeeding years during which such U.S. Holder holds the Ordinary Shares or ADSs, unless we cease to be a PFIC and such U.S. Holder makes a “deemed sale” election with respect to the Ordinary Shares or ADSs such
U.S. Holder holds. If such election is made, a U.S. Holder will be deemed to have sold the Ordinary Shares or ADSs it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, and any gain from such
deemed sale would be subject to the U.S. federal income tax treatment described below. After the deemed sale election, the Ordinary Shares or ADSs with respect to which the deemed sale election was made will not be treated as Ordinary Shares or ADSs
in a PFIC unless we subsequently become a PFIC.
For each taxable year, we are treated as a PFIC with respect to a U.S. Holder, such U.S. Holder will be subject to special tax rules with respect to any “excess distribution” it receives and any gain it realizes from a
sale or other disposition (including a pledge) of the Ordinary Shares or ADSs, unless it makes a “mark-to-market” election as discussed below. Distributions a U.S. Holder receives in a taxable year that are greater than 125% of the average annual
distributions it received during the shorter of the three preceding taxable years or its holding period for the Ordinary Shares or ADSs will be treated as an excess distribution. Under these special tax rules, if a U.S. Holder receives any excess
distribution or realizes any gain from a sale or other disposition of the Ordinary Shares or ADSs:
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the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Ordinary Shares or ADSs;
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the amount of excess distribution or gain allocated to the current taxable year, and any taxable year before the first taxable year in which we were a PFIC, must be included in the U.S.
Holder’s gross income (as ordinary income) for the current tax year; and
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the amount allocated to each other year will be subject to the highest marginal tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be
imposed on the resulting tax attributable to such amounts allocated to each other year.
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21
The tax liability for amounts allocated to years before the year of disposition or “excess distribution” cannot be offset by any losses for such years. Additionally, any gains realized on the sale of
the Ordinary Shares or ADSs cannot be treated as capital gains.
If we are treated as a PFIC with respect to a U.S. Holder for any taxable year, to the extent any of our subsidiaries are also PFICs, such U.S. Holder will be deemed to own its proportionate share of
any such subsidiaries that are PFICs, and such U.S. Holder may be subject to the rules described in the preceding two paragraphs with respect to the shares of such subsidiaries that are PFICs it would be deemed to own. As a result, a U.S. Holder may
incur liability for any “excess distribution” described above if we receive a distribution from such subsidiaries that are PFICs or if any we dispose of, or are deemed to dispose of, any shares in such subsidiaries that are PFICs. You should consult
your own tax advisor regarding the application of the PFIC rules to any of our subsidiaries.
Alternatively, a U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the general tax treatment for PFICs discussed above. If a U.S. Holder
makes a mark-to-market election for the Ordinary Shares or ADSs, such U.S. Holder will include in income for each year we are a PFIC an amount equal to the excess, if any, of the fair market value of the Ordinary Shares or ADSs as of the close of
such U.S. Holder’s taxable year over such U.S. Holder’s adjusted basis in such Ordinary Shares or ADSs. A U.S. Holder is allowed a deduction for the excess, if any, of the adjusted basis of the Ordinary Shares or ADSs over their fair market value
as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the Ordinary Shares or ADSs included in a U.S. Holder’s income for prior taxable years. Amounts included in a U.S. Holder’s
income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Ordinary Shares or ADSs, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market
loss on the Ordinary Shares or ADSs, as well as to any loss realized on the actual sale or disposition of the Ordinary Shares or ADSs to the extent the amount of such loss does not exceed the net mark-to-market gains previously included for the
Ordinary Shares or ADSs. A U.S. Holder’s basis in the Ordinary Shares or ADSs will be adjusted to reflect any such income or loss amounts. If a U.S. Holder makes a valid mark-to-market election, the tax rules that apply to distributions by
corporations that are not PFICs would apply to distributions by us, except the lower applicable tax rate for qualified dividend income would not apply. If we cease to be a PFIC when a U.S. Holder has a mark-to-market election in effect, gain or
loss realized by such U.S. Holder on the sale of the Ordinary Shares or ADSs will be a capital gain or loss and taxed in the manner described above under “—Sale or Other Disposition of Ordinary Shares or ADSs.”
The mark-to-market election is available only for “marketable stock,” which is a stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter, or regularly traded, on a
qualified exchange or another market, as defined in applicable U.S. Treasury regulations. Any trades that have as their principal purpose meeting this requirement will be disregarded. The ADSs are listed on the Nasdaq Global Market and,
accordingly, provided the ADSs are regularly traded, the mark-to-market election would be available to a U.S. Holder of ADSs if we are a PFIC. Once made, the election cannot be revoked without the consent of the IRS unless the Ordinary Shares or
ADSs cease to be marketable stock. If we are a PFIC for any year in which the U.S. Holder owns the Ordinary Shares or ADSs but before a mark-to-market election is made, the interest charge rules described above will apply to any mark-to-market gain
recognized in the year the election is made. If any of our subsidiaries are or become PFICs, the mark-to-market election will not be available with respect to the shares of such subsidiaries that are treated as owned by a U.S. Holder. Consequently,
a U.S. Holder could be subject to the PFIC rules with respect to income of the lower-tier PFICs the value of which already had been taken into account indirectly via mark-to-market adjustments. You should consult your own tax advisors as to the
availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.
In certain circumstances, a U.S. Holder of stock in a PFIC can make a “qualified electing fund election” to mitigate some of the adverse tax consequences of holding stock in a PFIC by including in
income its share of the corporation’s income on a current basis. However, we do not currently intend to prepare or provide the information that would enable a U.S. Holder to make a qualified electing fund election.
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Unless otherwise provided by the U.S. Treasury, each U.S. shareholder of a PFIC is required to file an annual information return on IRS Form 8621 (Information Return by a Shareholder of a Passive
Foreign Investment Company or Qualifying Electing Fund) containing such information as the U.S. Treasury may require. A U.S. Holder’s failure to file such annual information return could result in the imposition of penalties and the extension of the
statute of limitations with respect to U.S. federal income tax. You should consult your own tax advisors regarding the requirements of filing such information returns under these rules, taking into account the uncertainty as to whether we are
currently treated as or may become a PFIC.
YOU ARE STRONGLY URGED TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE IMPACT AND APPLICATION OF THE PFIC RULES ON YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs.
Backup Withholding and Information Reporting
Payments of dividends with respect to Ordinary Shares or ADSs and the proceeds from the sale, retirement, or other disposition of Ordinary Shares or ADSs made by a U.S. paying agent or other U.S.
intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable U.S. Treasury regulations. We, or an agent, a broker, or any paying agent, as the case may be, may be required to withhold tax (backup withholding),
currently at the rate of 24%, if a non-corporate U.S. Holder that is not otherwise exempt fails to provide an accurate taxpayer identification number and comply with other IRS requirements concerning information reporting. Certain U.S. Holders
(including, among others, corporations and tax-exempt organizations) are not subject to backup withholding. Backup withholding is not an additional tax. Any amount of backup withholding withheld may be used as a credit against your U.S. federal
income tax liability provided that the required information is furnished to the IRS. U.S. Holders should consult their own tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.
Individual U.S. Holders may be required to file certain U.S. information reporting returns with the IRS with respect to an investment in our Ordinary Shares or ADSs, including, among others, IRS Form
8938 (Statement of Specified Foreign Financial Assets). U.S. Holders paying more than $100,000 for our Ordinary Shares or ADSs may be required to file IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) reporting this
payment. As described above under “—Passive Foreign Investment Companies,” if we were determined to be a PFIC, each U.S. Holder would be required to file an annual report containing certain information. Substantial penalties may be imposed upon a
U.S. Holder that fails to comply with the required information reporting.
You should consult your own tax advisors regarding the backup withholding tax and information reporting rules.
EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN INVESTMENT IN OUR ORDINARY SHARES OR ADSs IN LIGHT OF SUCH INVESTOR’S
PARTICULAR CIRCUMSTANCES.
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We have entered into a Sales Agreement with the Sales Agents under which we may issue and sell up to $100.0 million of the ADSs from time to time through the Sales Agents as our sales agents. Sales
of the ADSs, if any, will be made by any method that is deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act, including sales made directly on or through the Nasdaq Global Market, on or through any other existing
trading market for the ADSs or to or through a market maker.
The Sales Agents will offer the ADSs subject to the terms and conditions of the Sales Agreement on a daily basis or as otherwise agreed upon by us and the Sales Agents. We will designate the maximum number or amount of
ADSs to be sold through the Sales Agents on a daily basis or otherwise determine such maximum number or amount together with the Sales Agents. Subject to the terms and conditions of the Sales Agreement, the Sales Agents will use commercially
reasonable efforts consistent with their normal trading and sales practices to sell on our behalf all of the ADSs requested to be sold by us. We may instruct the Sales Agents not to sell ADSs if the sales cannot be effected at or above a minimum
price designated by us in any such instruction. The Sales Agents or we may suspend the offering of the ADSs being made through the Sales Agents under the Sales Agreement upon proper notice to the other parties. The Sales Agents and we each have the
right, by giving written notice as specified in the Sales Agreement, to terminate the Sales Agreement at each party’s sole discretion at any time. The offering of the ADSs pursuant to the Sales Agreement will otherwise terminate upon the
termination of the Sales Agreement as provided therein.
The compensation payable to the Sales Agents will be an amount of up to 3.0% of the gross proceeds of any ADSs sold through it pursuant to the Sales Agreement and we will reimburse the Sales Agents for up to $75,000 of
their expenses in connection with the establishment of this offering program and up to $15,000 of their expenses quarterly thereafter, including fees and disbursements of legal counsel. In accordance with Financial Industry Regulatory Authority,
Inc. Rule 5110, these reimbursed fees and expenses are deemed sales compensation to the Sales Agents in connection with this offering. We estimate that the total expenses of the offering payable by us, excluding compensation payable to the Sales
Agents under the Sales Agreement, will be approximately $180,000
The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory or self-regulatory organization in connection with the sales
of the ADSs, will equal our net proceeds for the sale of such ADSs.
The Sales Agent responsible for a particular day’s sales will provide written confirmation to us no later than the next succeeding trading day on the Nasdaq Global Market after each such day on which ADSs are sold
through such Sales Agent under the Sales Agreement. Each confirmation will include the amount or number of ADSs sold through such Sales Agent on that day, the volume-weighted average price of the ADSs sold, the percentage of the daily trading
volume and the net proceeds to us from such sales.
Settlement for sales of ADSs will occur, unless the parties agree otherwise, on the second trading day following the date on which any sales were made in return for payment of the net proceeds to us.
There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
In connection with the sale of the ADSs on our behalf pursuant to the Sales Agreement, each Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the
compensation paid to the Sales Agents will be deemed to be underwriting commissions or discounts. We have agreed in the Sales Agreement to provide indemnification and contribution to the Sales Agents with respect to certain liabilities, including
liabilities under the Securities Act or the Exchange Act. As sales agents, the Sales Agents will not engage in any transactions that stabilize the ADSs.
The Sales Agents and/or its affiliates have provided, and may in the future provide, various investment banking and other financial services for us for which services they have received, and may in
the future receive, customary fees.
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This prospectus and the accompanying base prospectus in electronic format may be made available on a website maintained by us and the Sales Agents may distribute this prospectus and the accompanying
base prospectus electronically.
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968 and has not been filed with or approved by the Israel Securities Authority.
The address of SVB Leerink is 1301 Avenue of the Americas, New York, NY 10019. The address of Cantor is 499 Park Avenue, New York, NY 10022.
Certain matters concerning this offering will be passed upon for us by Haynes and Boone, LLP, New York, New York. The validity of the securities being offered by this prospectus will be passed upon
for us by Gross & Co., Tel-Aviv, Israel. Covington & Burling LLP, New York, New York is acting as counsel to the Sales Agents in connection with this offering with respect to U.S. law. Members of Covington & Burling LLP are the beneficial
owners of an aggregate of less than 1% of our Ordinary Shares.
The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting)
incorporated in this Prospectus by reference to the Annual Report on Form 20-F for the year ended December 31, 2020, have been so incorporated in reliance on the report of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member
firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
We have filed with the SEC a registration statement on Form F-3 under the Securities Act, with respect to the securities offered by this prospectus. However, as is permitted
by the rules and regulations of the SEC, this prospectus, which is part of our registration statement on Form F-3, omits certain non-material information, exhibits, schedules and undertakings set forth in the registration statement. For further
information about us, and the securities offered by this prospectus, please refer to the registration statement.
We are subject to the reporting requirements of the Exchange Act that are applicable to a foreign private issuer. In accordance with the Exchange Act, we file reports,
including annual reports on Form 20-F by April 30 of each year. We also furnish to the SEC under cover of Form 6-K material information filed with and made public by any stock exchange or distributed by us to our shareholders.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the
SEC (http://www.sec.gov). These SEC filings are also available to the public from commercial document retrieval services.
As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders and our officers,
directors and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained in Section 16 of the Exchange Act and related Exchange Act rules.
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We file annual and special reports and other information with the SEC. These filings contain important information which does not appear in this prospectus. The SEC allows us
to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to other documents which we have filed or will file with the SEC. We are incorporating by reference in
this prospectus the documents listed below and all amendments or supplements we may file to such documents, as well as any future filings we may make with the SEC on Form 20-F under the Exchange Act before the time that all of the securities
offered by this prospectus have been sold or de-registered:
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the description of our Ordinary Shares contained in our Registration Statement on Form 20-F filed with the SEC on December 26, 2012;
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our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on March 18, 2021; and
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reports on Form 6-K filed on March 22, 2021, March 25, 2021, April 9, 2021, May 20, 2021, May 21, 2021, May 24, 2021, May 26, 2021 (two filings), May 27, 2021, June
7, 2021, June 9, 2021, June 10, 2021, June 17, 2021, June 21, 2021, June 28, 2021, July 13, 2021, July 19, 2021, July 20, 2021, July 22, 2021, and July 26, 2021 (in each case only to the extent provided in such Form 6-K).
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In addition, any reports on Form 6-K we submit to the SEC by the registrant pursuant to the Exchange Act after the date of the initial registration statement and prior to
effectiveness of the registration statement that we specifically identify in such forms as being incorporated by reference into the registration statement of which this prospectus forms a part, all subsequent annual reports on Form 20-F filed after
the effective date of this registration statement and prior to the termination of this offering, and any reports on Form 6-K subsequently submitted to the SEC or portions thereof that we specifically identify in such forms as being incorporated by
reference into the registration statement of which this prospectus forms a part, shall be considered to be incorporated into this prospectus by reference and shall be considered a part of this prospectus from the date of filing or submission of
such documents.
Certain statements in and portions of this prospectus update and replace information in the above-listed documents incorporated by reference.
Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus or the above-listed documents.
We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such
documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to RedHill Biopharma Ltd., 21 Ha'arba'a Street, Tel Aviv 6473921, Israel, Attn: Dror Ben-Asher, telephone number:
+972 (3) 541-3131. You may also obtain information about us by visiting our website at www.redhillbio.com. Information contained in our website is included as an inactive textual reference only and is not
part of this prospectus. The SEC maintains an Internet site, http://www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
26
Up to $100,000,000
American Depositary Shares each representing 10 Ordinary Shares
RedHill Biopharma Ltd.
___________________________________
PROSPECTUS
___________________________________
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SVB Leerink
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Cantor |
July, 2021
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Exemption, Insurance and Indemnification of Directors and Officers
Exemption of Officers and Directors
Under the Israeli Companies Law, a company may not exempt an officer or director from liability with respect to a breach of his duty of loyalty but may exempt in advance an
officer or director from liability to the company, in whole or in part, with respect to a breach of his duty of care, except in connection with a prohibited distribution made by the company, if so provided in its articles of association. Our
articles of association provide for this exemption from liability for our directors and officers.
Directors’ and Officers’ Insurance
The Israeli Companies Law and our articles of association provide that, subject to the provisions of the Israeli Companies Law, we may obtain insurance for our directors and officers for any
liability stemming from any act performed by an officer or director in his capacity as an officer or director, as the case may be with respect to any of the following:
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a breach of such officer’s or director’s duty of care to us or to another person;
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a breach of such officer’s or director’s duty of loyalty to us, provided that such officer or director acted in good faith and had reasonable cause to assume that his act would not
prejudice our interests;
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a financial liability imposed upon such officer or director in favor of another person;
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financial liability imposed on the officer or director for payment to persons or entities harmed as a result of violations in administrative proceedings as described in Section
52(54)(a)(1)(a) of the Israeli Securities Law (“Party Harmed by the Breach”);
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expenses incurred by such officer or director in connection with an administrative proceeding conducted in this matter, including reasonable litigation expenses, including legal fees; or
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a breach of any duty or any other obligation, to the extent insurance may be permitted by law.
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Pursuant to the Compensation Policy, we may obtain a directors’ and officers’ liability insurance policy, which would apply to our or our subsidiaries’ directors and officers, as they may be, from
time to time, subject to the following terms and conditions: (a) the total insurance coverage under the insurance policy may not exceed $100 million; and (b) the purchase of such policy shall be approved by the Compensation Committee (and, if
required by law, by the Board of Directors) which shall determine that such policy reflects the current market conditions, and it shall not materially affect the Company's profitability, assets or liabilities. In addition, pursuant to our
Compensation Policy, should we sell our operations (in whole or in part) or in case of merger, spin-off or any other significant business combination involving us or part or all of our assets, we may obtain a director’s and officers’ liability
insurance policy (run-off) for our directors and officers in office with regard to the relevant operations, subject to the following terms and conditions: (a) the insurance term may not exceed seven years; (b) the coverage amount may not exceed
$100 million; and (c) the purchase of such policy shall be approved by the Compensation Committee (and, if required by law, by the Board of Directors) which shall determine that such policy reflects the current market conditions, and it shall not
materially affect the Company’s profitability, assets or liabilities. The Compensation Policy is in effect for three years from the 2019 annual general meeting.
Pursuant to the foregoing approvals, we carry directors’ and officers’ liability insurance. This insurance is renewed on an annual basis.
Indemnification of Officers and Directors
The Israeli Companies Law provides that a company may indemnify an officer or director for payments or expenses associated with acts performed in his capacity as an officer or
director of the company, provided the company’s articles of association include the following provisions with respect to indemnification:
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a provision authorizing the company to indemnify an officer or director for future events with respect to a monetary liability imposed on him in favor of another person pursuant to a judgment
(including a judgment given in a settlement or an arbitrator’s award approved by the court), so long as such indemnification is limited to types of events which, in the board of directors’ opinion, are foreseeable at the time of granting the
indemnity undertaking given the company’s actual business, and in such amount or standard as the board of directors deems reasonable under the circumstances. Such undertaking must specify the events that, in the board of directors’ opinion,
are foreseeable in view of the company’s actual business at the time of the undertaking and the amount or the standards that the board of directors deemed reasonable at the time;
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a provision authorizing the company to indemnify an officer or director for future events with respect to reasonable litigation expenses, including counsel fees, incurred by an officer or
director in which he is ordered to pay by a court, in proceedings that the company institutes against him or instituted on behalf of the company or by another person, or in a criminal charge from which he was acquitted, or a criminal charge
in which he was convicted for a criminal offense that does not require proof of criminal intent;
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a provision authorizing the company to indemnify an officer or director for future events with respect to reasonable litigation fees, including attorney’s fees, incurred by an officer or
director due to an investigation or proceeding filed against him by an authority that is authorized to conduct such investigation or proceeding, and that resulted without filing an indictment against him and without imposing on him financial
obligation in lieu of a criminal proceeding, or that resulted without filing an indictment against him but with imposing on him a financial obligation as an alternative to a criminal proceeding in respect of an offense that does not require
the proof of criminal intent or in connection with a monetary sanction;
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a provision authorizing the company to indemnify an officer or director for future events with respect to a Party Harmed by the Breach;
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a provision authorizing the company to indemnify an officer or director for future events with respect to expenses incurred by such officer or director in connection with an administrative
proceeding, including reasonable litigation expenses, including legal fees; and
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a provision authorizing the company to indemnify an officer or director retroactively.
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Limitations on Insurance, Exemption and Indemnification
The Israeli Companies Law and our articles of association provide that a company may not exempt or indemnify an office holder nor enter into an insurance contract, which would
provide coverage for any monetary liability incurred as a result of any of the following:
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a breach by the officer or director of his duty of loyalty, except for insurance and indemnification where the officer or director acted in good faith and had a reasonable basis to believe
that the act would not prejudice the company;
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a breach by the officer or director of his duty of care if the breach was done intentionally or recklessly, except if the breach was solely as a result of negligence;
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any act or omission done with the intent to derive an illegal personal benefit; or
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any fine, civil fine, monetary sanctions, or forfeit imposed on the officer or director.
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II - 2
In addition, under the Israeli Companies Law, exemption of, indemnification of, and procurement of insurance coverage for, our directors and officers must be approved by our
audit committee and board of directors and, in specified circumstances, by our shareholders.
Letters of Indemnification
We may provide a commitment to indemnify in advance any director or officer of ours in the course of such person’s position as our director or officer, all subject to the
letter of indemnification, as approved by our shareholders from time to time and in accordance with our articles of association. We may provide retroactive indemnification to any officer to the extent allowed by the Israeli Companies Law. As
approved by our shareholders on July 26, 2021, the amount of the advance indemnity is limited to the higher of 25% of our then shareholders’ equity, per our most recent annual financial statements, or $10 million.
As part of the indemnification letters, we exempted our directors and officers, in advance, to the extent permitted by law, from any liability for any damage incurred by them,
either directly or indirectly, due to the breach of an officer’s or director’s duty of care vis- à-vis us, within his acts in his capacity as an officer or director. The letter provides that so long as not permitted by law, we do not exempt an
officer or director in advance from his liability to us for a breach of the duty of care upon distribution, to the extent applicable to the officer or director, if any. The letter also exempts an officer or director from any liability for any
damage incurred by him, either directly or indirectly, due to the breach of the officer or director’s duty of care vis- à-vis us, by his acts in his capacity as an officer or director prior to the letter of exemption and indemnification becoming
effective.
Item 9. Exhibits
The index to exhibits appears below on the page immediately following the signature pages of this Registration Statement.
Item 10. Undertakings
(1) The undersigned registrant hereby undertakes:
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to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, or the Securities Act;
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(ii)
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to reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and
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(iii)
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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 this
Registration Statement;
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II - 3
provided, however, that paragraphs (i), (ii) and (iii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is 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,
or the Exchange Act that are incorporated by reference in this Registration Statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.
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(b)
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that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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(c)
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to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(d)
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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 Item 8.A of Form 20-F 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.
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(e)
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that, for the purpose of determining any liability under the Securities Act to any purchaser:
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(i)
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each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be a part of the registration statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
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(ii)
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each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that
date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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(f)
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that, for the purpose of determining liability of a registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i)
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any preliminary prospectus or prospectus of the undersigned registrant to the offering required to be filed pursuant to Rule 424;
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(ii)
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any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;
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(iii)
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the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and
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(iv)
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any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(2) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referred
to in Item 8, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final adjudication of such issue.
(4) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, 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.
(5) The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, 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 the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II - 5
EXHIBIT INDEX
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Exhibit No.
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Document
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1.1
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Form of Underwriting Agreement.*
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4.2
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Form of Warrant Agreement (including form of Warrant Certificate).*
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4.3
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Form of Subscription Right Agreement (including form of Right Certificate).*
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4.4
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Form of Unit Agreement (including form of Unit Certificate).*
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_______________
* To be filed, if applicable, by amendment, or as an exhibit to a report on Form 6-K and incorporated herein by reference.
II - 6
Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it complies with all of the requirements for filing on Form F-3 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel on July 29, 2021.
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By: /s/ Dror Ben-Asher
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Name: Dror Ben-Asher
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Title: Chief Executive Officer and Chairman of the Board of Directors
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KNOW ALL PERSONS BY THESE PRESENTS, each director and officer whose signature appears below constitutes and appoints, Dror Ben-Asher or Micha Ben-Chorin, or either of these, his
true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, to sign in any and all capacities any and all amendments or post-effective amendments to this registration statement on Form F-3, and to sign any and all
additional registration statements relating to the same offering of securities of the Registration Statement that are filed pursuant to Rule 462(b) of the Securities Act, and to file the same with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting such attorney-in-fact and agent full power and authority to do all such other acts and execute all such other documents as he may deem necessary or desirable in connection
with the foregoing, as fully as the undersigned may or could do in person, hereby ratifying and confirming all that such attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed below by the following persons on the dates and in the capacities indicated.
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Signature
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Title
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/s/ Dror Ben-Asher
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Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
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July 29, 2021
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Dror Ben-Asher
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/s/ Micha Ben Chorin
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Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
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July 29, 2021
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Micha Ben Chorin
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/s/ Eric Swenden
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Director
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July 29, 2021
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Eric Swenden
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/s/ Dr. Shmuel Cabilly
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Director
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July 29, 2021
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Dr. Shmuel Cabilly
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/s/ Dr. Kenneth Reed
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Director
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July 29, 2021
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Dr. Kenneth Reed
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/s/ Ofer Tsimchi
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Director
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July 29, 2021
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Ofer Tsimchi
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/s/ Alla Felder
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Director
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July 29, 2021
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Alla Felder
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/s/ Rick Scruggs
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Chief Commercial Officer and Director
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July 29, 2021
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Rick Scruggs
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/s/Alessandro Della Chà
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Director
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July 29, 2021
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Alessandro Della Chà
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Signature of authorized representative in the United States
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant’s duly authorized representative has signed this Registration Statement on Form F-3 on this 29th day
of July, 2021.
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REDHILL BIOPHARMA INC.
Authorized U.S. Representative
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By: /s/ Micha Ben Chorin
Micha Ben Chorin
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Exhibit 1.2
RedHill Biopharma Ltd.
American Depositary Shares
Each Representing Ten Ordinary Shares
(par value NIS 0.01 per share)
SALES AGREEMENT
July 29, 2021
SVB LEERINK LLC
1301 Avenue of the Americas, 12th Floor
New York, NY 10019
and
CANTOR FITZGERALD & CO.
499 Park Avenue
New York, NY 10022
Ladies and Gentlemen:
RedHill Biopharma Ltd., a company limited by shares organized under the laws of the State of Israel (the “Company”),
confirms its agreement (this “Agreement”) with SVB Leerink LLC and Cantor Fitzgerald & Co. (each, an “Agent,” and together, the “Agents”) as follows:
1. Issuance
and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may sell through the Agents American Depositary Shares (“ADSs”), each representing ten ordinary shares, par value NIS 0.01 per share, of the Company (“Ordinary Shares”), subject to the limitations set forth in
Section 5(c) (the “Placement ADSs”), and may issue Ordinary Shares underlying the Placement ADSs (the “Underlying Shares”). The ADSs will be issued
pursuant to the Deposit Agreement dated December 26, 2012 among the Company, the Bank of New York Mellon, as depositary (the “Depositary”) and the owners and holders of ADSs issued thereunder (the “Deposit Agreement”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in this Section 1 on the aggregate gross sales price
of Placement ADSs that may be issued and sold under this Agreement from time to time shall be the sole responsibility of the Company, and that the Agents shall have no obligation in connection with such compliance. The issuance and sale of
Placement ADSs through the Agents will be effected pursuant to the Registration Statement (as defined below) to be filed by the Company with the United States Securities and Exchange Commission (the “Commission”)
and to be declared effective by the Commission, although nothing in this Agreement shall be construed as requiring the Company to issue any Placement ADSs.
The Company has prepared and will file, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “Securities Act”), with the Commission a registration statement on Form F-3, including a base prospectus (the “Base Prospectus”),
relating to certain securities, including the ADSs, to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). The Company has prepared a sales agreement prospectus relating to the Base Prospectus which will be
included as part of such registration statement at the time it becomes effective, which sales agreement prospectus specifically relates to the Placement ADSs to be issued from time to time pursuant to this Agreement (the “Sales Agreement Prospectus”). The Company will furnish to the Agents, for use by the Agents, copies of the Base Prospectus and the Sales Agreement Prospectus included as part of such registration statement at the time it
becomes effective. Except where the context otherwise requires, such registration statement, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined
below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or Rule 462(b) under the Securities Act, is herein called the “Registration Statement.” The Base Prospectus and the Sales Agreement Prospectus, including all documents incorporated therein by reference, included in the Registration Statement, in the form in which such
Base Prospectus and/or Sales Agreement Prospectus have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus” (as used herein, as defined in
Rule 433 under the Securities Act (“Rule 433”)), relating to the Placement ADSs that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to
Rule 433(d)(5)(i), in each case, in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.”
Any reference herein to the Registration Statement, the Sales Agreement Prospectus, the Prospectus or any issuer free writing prospectus shall be deemed to
refer to and include the documents, if any, that are or are deemed to be incorporated by reference therein (the “Incorporated Documents”), including, unless the context otherwise requires, the documents,
if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, the Sales Agreement Prospectus, the Prospectus or any
issuer free writing prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or the respective dates of the Base Prospectus, Sales
Agreement Prospectus, Prospectus or such issuer free writing prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or any amendment or
supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System or, if applicable, the Interactive Data Electronic Application system when used by
the Commission (collectively, “EDGAR”).
2
2. Placements.
Each time that the Company wishes to sell any Placement ADSs through the Agents hereunder (each, a “Placement”), it will notify an Agent (such Agent, the “Designated
Agent”) by email notice (or other method mutually agreed to in writing by the parties) (each such notice, a “Placement Notice”) containing the parameters in accordance with which it
desires such Placement ADSs to be sold, which at a minimum shall include the maximum number or amount of Placement ADSs to be sold, the time period during which sales are requested to be made, any limitation on the number or amount of Placement
ADSs that may be sold in any one Trading Day (as defined in Section 3) and any minimum price below which sales may not be made, a form of which containing such minimum sales parameters is attached hereto as Schedule
1. The Placement Notice must originate from one of the individuals authorized to act on behalf of the Company and set forth on Schedule 2 (with a copy to each of the other individuals
listed on such Schedule 2 though only with regard to the Designated Agent and not the other Agent), and shall be addressed to each of the individuals from the Designated Agent set forth on Schedule 2, as such Schedule 2 may be updated by either party from time to time by sending a written notice containing a revised Schedule 2 to the other party in the manner provided in Section 12 (including by email correspondence to each of the individuals of the Company set forth on Schedule 2, if
receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply). The Placement Notice shall be effective upon receipt by the Designated Agent unless and until (i) in
accordance with the notice requirements set forth in Section 4, the Designated Agent declines to accept the terms contained therein for any reason, in its sole discretion, within two Trading Days of the date the Designated Agent receives the
Placement Notice, (ii) in accordance with the notice requirements set forth in Section 4, the Designated Agent suspends sales under the Placement Notice for any reason in its sole discretion, (iii) the entire amount of the Placement ADSs has been
sold pursuant to this Agreement, (iv) in accordance with the notice requirements set forth in Section 4, the Company suspends sales under or terminates the Placement Notice for any reason in its sole discretion, (v) the Company issues a
subsequent Placement Notice and explicitly indicates that its parameters supersede those contained in the earlier dated Placement Notice or (vi) this Agreement has been terminated pursuant to the provisions of Section 11. The amount of any
discount, commission or other compensation to be paid by the Company to the Designated Agent in connection with the sale of the Placement ADSs effected through the Designated Agent shall be calculated in accordance with the terms set forth in Schedule 3. It is expressly acknowledged and agreed that neither the Company nor the Designated Agent will have any obligation whatsoever with respect to a Placement or any Placement ADSs unless and
until the Company delivers a Placement Notice to the Designated Agent and the Designated Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event
of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control with respect to the matters covered thereby.
3. Sale of
Placement ADSs by the Agents. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, including Section 5(c), upon the Designated Agent’s acceptance of the terms of a
Placement Notice as provided in Section 2, and unless the sale of the Placement ADSs described therein has been declined, suspended or otherwise terminated in accordance with the terms of this Agreement, the Designated Agent, for the period
specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, including the rules and regulations and the rules of the Nasdaq Stock
Market LLC (“Nasdaq”) to sell such Placement ADSs up to the number or amount specified in, and otherwise in accordance with the terms of, such Placement Notice. The Designated Agent will provide
written confirmation to the Company (including by email correspondence to each of the individuals of the Company, the Depositary, Gross & Co. and Haynes and Boone, LLP set forth on Schedule 2,
if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) no later than 11:59 p.m. New York time on the Trading Day on which it has made sales of Placement ADSs
hereunder setting forth the number or amount of Placement ADSs sold on such Trading Day, the volume-weighted average price of the Placement ADSs sold and the Net Proceeds (as defined below) payable to the Company. Unless otherwise specified by
the Company in a Placement Notice, the Designated Agent may sell Placement ADSs by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act, including sales made directly on or through the
Nasdaq Global Market, on or through any other existing trading market for the Ordinary Shares or ADS or to or through a market maker (other than the Tel Aviv Stock Exchange or otherwise in Israel unless agreed to in writing by the parties
hereto). If expressly authorized by the Company (including in a Placement Notice), the Designated Agent may also sell Placement ADSs in negotiated transactions. Notwithstanding the provisions of Section 6(tt), except as may be otherwise agreed by
the Company and the Designated Agent, the Designated Agent shall not purchase Placement ADSs on a principal basis pursuant to this Agreement unless the Company and the Designated Agent enter into a separate written agreement setting forth the
terms of such sale. The Company acknowledges and agrees that (i) there can be no assurance that the Designated Agent will be successful in selling Placement ADSs, (ii) the Designated Agent will incur no liability or obligation to the Company or
any other person or entity if it does not sell Placement ADSs for any reason other than a failure by the Designated Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and
federal laws, including the rules and regulations and the rules of Nasdaq to sell such Placement ADSs as required under this Agreement and (iii) the Designated Agent shall be under no obligation to purchase Placement ADSs on a principal basis
pursuant to this Agreement unless the Company and the Designated Agent enter into a separate written agreement setting forth the terms of such sale. For the purposes hereof, “Trading Day” means any
day on which the ADSs are purchased and sold on the Nasdaq Global Market.
3
4. Suspension
of Sales.
(a) The
Company or the Designated Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 2, if receipt of
such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by email correspondence to each of the individuals of the other party set forth
on Schedule 2), suspend any sale of Placement ADSs; provided, however, that such suspension shall not affect or
impair either party’s obligations with respect to any Placement ADSs sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice under this Section 4 shall be effective against the other party unless notice
is sent by one of the individuals named on Schedule 2 hereto to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply).
(b) Notwithstanding
any other provision of this Agreement, during any period in which the Company is, or could be deemed to be, in possession of material non-public information, the Company and the Agents agree that (i) no sale of Placement ADSs will take place,
(ii) the Company shall not request the sale of any Placement ADSs and shall cancel any effective Placement Notices instructing the Agent to make any sales and (iii) the Agents shall not be obligated to sell or offer to sell any Placement ADSs.
5. Settlement
and Delivery of the Placement ADSs.
(a) Settlement
of Placement ADSs. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement ADSs will occur on the second Trading Day (or such earlier day as is industry practice or as is required for regular-way
trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement ADSs
sold (the “Net Proceeds”) will be in U.S. dollars and equal to the aggregate gross sales price received by the Designated Agent at which such Placement ADSs were sold, provided that if the Placement
ADSs were sold in currencies other than U.S. dollars, no effect will be given to the applicable exchange rates, after deduction of (i) the Designated Agent’s commission, discount or other compensation for such sales payable by the Company
pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to the Designated Agent hereunder pursuant to Section 7(g) hereof and (iii) any transaction fees imposed by any governmental or self-regulatory organization in
respect of such sales.
4
(b) Delivery
of Placement ADSs. On or before each Settlement Date, the Company will, or will instruct the Depositary through a delivery order to, electronically transfer the Placement ADSs being sold by crediting the Designated Agent’s or its
designee’s account (provided the Designated Agent shall have given the Company written notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other
means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be duly authorized, freely tradeable, transferable, registered ADSs in good deliverable form. On each Settlement Date, the Designated Agent will
deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company or the Depositary (under the Deposit Agreement) defaults in its obligation to
deliver duly authorized Placement ADSs on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 9(a) hereof, it will (i) hold the Designated Agent harmless against any
loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and (ii) pay to the Designated Agent (without duplication) any commission, discount or
other compensation to which it would otherwise have been entitled absent such default.
(c) Limitations
on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement ADSs if, after giving effect to the sale of such Placement ADSs, the aggregate number or gross sales proceeds of Placement ADSs
sold pursuant to this Agreement would exceed the lesser of: (i) the number or dollar amount of securities registered pursuant to, and available for offer and sale under, the Registration Statement pursuant to which the offering of Placement ADSs
is being made, (ii) the number of authorized but unissued Ordinary Shares of the Company (less Ordinary Shares issuable upon exercise, conversion or exchange of any outstanding securities of the Company or otherwise reserved from the Company’s
authorized share capital), (iii) the number or dollar amount of securities permitted to be offered and sold by the Company under Form F-3 (including General Instruction I.B.5. thereof, if such instruction is applicable), (iv) the number or dollar
amount of securities that the Company’s board of directors or a duly authorized committee thereof authorized the Company to issue and sell from time to time, and notified to the Designated Agent in writing, or (v) the dollar amount of ADSs for
which the Company has filed the Sales Agreement Prospectus. Under no circumstances shall the Company cause or request the offer or sale of any Placement ADSs pursuant to this Agreement at a price lower than the minimum price authorized from time
to time by the Company’s board of directors or a duly authorized committee thereof, and notified to the Designated Agent in writing. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge and agree that
compliance with the limitations set forth in this Section 5(c) on the number or dollar amount of Placement ADSs that may be issued and sold under this Agreement from time to time shall be the sole responsibility of the Company, and that the
Agents shall have no obligation in connection with such compliance.
(d) Sales
Through Agents. With respect to the offering and sale of Placement ADSs pursuant to this Agreement, the Company agrees that any offer to sell Placement ADSs, any solicitation of an offer to buy Placement ADS, and any sales of Placement ADSs
shall only be effected by or through one single Agent as the Designated Agent on any single given Trading Day, and in no event shall the Company request that more than one Agent offer or sell Placement ADSs pursuant to this Agreement on the same
Trading Day.
5
6. Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, the Agents that as of the date of this Agreement, and as of (i) each Representation Date (as defined in Section 7(m)), (ii) each date on which a
Placement Notice is given, (iii) the date and time of each sale of any Placement ADSs pursuant to this Agreement and (iv) each Settlement Date (each such time or date referred to in clauses (i) through (iv), an “Applicable
Time”):
(a) The
Company meets the requirements for use of Form F-3 under the Securities Act and the Ordinary Shares have been or will be duly registered under the Securities Act pursuant to the Registration Statement. The Registration Statement and any
post-effective amendments thereto have been or will be declared effective under the Securities Act or has become or will become effective under the Securities Act, as applicable, and no stop order suspending the use of the Base Prospectus, the
Sales Agreement Prospectus or the Prospectus, or the effectiveness of the Registration Statement has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company,
are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.
(b) At the
respective times that the Registration Statement and any amendments thereto became or will become effective, at each time subsequent to the filing of the Registration Statement that the Company filed an annual report on Form 20-F (or any
amendment thereto) with the Commission, at each deemed effective date with respect to the Agents pursuant to Rule 430B(f)(2), and at each Settlement Date, the Registration Statement and any amendments to any of the foregoing complied and will
comply in all material respects with the requirements of the Securities Act and did not, does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
At the respective times the Prospectus or any amendment or supplement thereto was filed or will be filed pursuant to Rule 424(b), and
at each Settlement Date, and at any time when a prospectus is required (or, but for the provisions of Rule 172, would be required) by applicable law to be delivered in connection with sales of the Placement ADSs (whether to meet the requests of
purchasers pursuant to Rule 173(d) or otherwise), neither the Prospectus nor any amendments or supplements thereto included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading.
The Sales Agreement Prospectus, together with the Base Prospectus and any amendments or supplements thereto filed as part of the
Registration Statement or any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, or delivered to the Agents for use in connection with the placements of the Placement ADSs, complied when so filed or when so delivered, as the
case may be, in all material respects with the Securities Act.
The representations and warranties in the preceding paragraphs of this Section 6(b) do not apply to statements in or omissions from
the Registration Statement, the Prospectus or any issuer free writing prospectus or any amendment or supplement to any of the foregoing made in reliance upon and in conformity with written information furnished to the Company by the Agents expressly
for use therein, it being understood and agreed that the only such information furnished by the Agents as aforesaid consists of the information described as such in Section 9(b) hereof.
At the respective times that the Registration Statement or any amendment to any of the foregoing were filed or will be filed and as of
the earliest time after the filing of the Registration Statement that the Company or any other offering participant made a bona fide offer of the Placement ADSs within the meaning of Rule 164(h)(2), and at the date hereof, the Company was not and is
not an “ineligible issuer” as defined in Rule 405, in each case without taking into account any determination made by the Commission pursuant to paragraph (2) of the definition of such term in Rule 405; and without limitation to the foregoing, the
Company has at all relevant times met, meets and will at all relevant times meet the requirements of Rule 164 for the use of a free writing prospectus (as defined in Rule 405) in connection with the offering contemplated hereby.
6
The copies of the Registration Statement and any amendments to any of the foregoing and the copies of each preliminary prospectus,
each issuer free writing prospectus that is required to be filed with the Commission pursuant to Rule 433 and the Prospectus and any amendments or supplements to any of the foregoing, that have been or subsequently are delivered to the Agents in
connection with the placements of the Placement ADSs (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise) were and will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T. For the purposes of this Agreement, references to the “delivery” or “furnishing” of any of the foregoing documents to the Agents, and any similar terms, include, without limitation, electronic
delivery.
Each issuer free writing prospectus (if any), as of its issue date and at all subsequent times through the completion of the public
offering and sale of the Placement ADSs did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus that has not been superseded or
modified.
(c) The
Company and the Depositary have prepared and filed with the Commission a registration statement relating to the ADSs on Form F-6 (No. 333-185302) (the “Form F-6”) and a related prospectus for
registration under the Securities Act of the ADSs, have filed such amendments thereto and such amended prospectuses as may have been required to the date hereof, and will file such additional amendments thereto and such amended prospectuses as
may hereinafter be required. The registration statement on Form F-6 for registration of the ADSs, as amended at the time it became effective (including by the filing of any post-effective amendments thereto), and the prospectus included therein,
as then amended are hereinafter called the “ADS Registration Statement.” The Form F-6 was declared effective under the Securities Act on December 26, 2012, and (i) no stop order preventing or
suspending the effectiveness of the ADS Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the knowledge of the Company, threatened by the Commission, (ii) the ADS Registration Statement complies
and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) the ADS Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading and (iv) all of the Placement ADSs
are registered pursuant to the ADS Registration Statement.
(d) The Company is a “foreign private issuer,” as such term is defined in Rule 405 of the Securities Act.
(e) The
documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the respective times when they became effective or at the respective times when they were filed or will be filed with the
Commission, as the case may be, complied in all material respects with the requirements of the Exchange Act and none of such documents, as of the date they became effective or were filed with the Commission, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in Registration
Statement and the Prospectus, when such documents hereafter become effective or are hereafter filed with the Commission, as the case may be, will comply in all material respects with the requirements of the Exchange Act and will not, as of the
date such documents become effective or are filed with the Commission, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
7
(f) Kesselman
& Kesselman, a member firm of PricewaterhouseCoopers International Limited, which has audited and reviewed certain financial statements of the Company included in the Registration Statement and the Prospectus is an independent registered
public accounting firm with respect to the Company as required by the Securities Act, the Exchange Act and the Public Company Accounting Oversight Board (the “PCAOB”).
(g) The
financial statements of the Company included in the Registration Statement and the Prospectus, together with the related schedules (if any) and notes, present fairly in all material respects the financial position of the Company and the
Subsidiary (as defined below) at the dates indicated and the results of operations, changes in shareholders’ equity and cash flows of the Company and the Subsidiary for the periods specified; the financial statements of any other entities or
businesses included in the Registration Statement or the Prospectus, together with the related schedules (if any) and notes, present fairly in all material respects the financial position of each such entity or business, as the case may be, and
the Subsidiary at the dates indicated and the results of operations, changes in shareholders’ (or other owners’) equity and cash flows of such entity or business, as the case may be, and the Subsidiary for the periods specified; and all such
financial statements have been prepared in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, applied on a consistent
basis throughout the periods involved and comply in all material respects with all applicable accounting requirements under the Securities Act or the Exchange Act. The supporting schedules, if any, included in the Registration Statement present
fairly in all material respects, in accordance with IFRS, the information required to be stated therein. The other financial data set forth or incorporated by reference in the Registration Statement and the Prospectus present fairly in all
material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements of the Company included in the Registration Statement and the Prospectus. All “non-GAAP financial measures”
(as such term is defined in the rules and regulations of the Commission), if any, contained in the Registration Statement and the Prospectus comply with Item 10 of Regulation S-K of the Commission, to the extent applicable.
(h) Since the
date of the most recent financial statements included or incorporated by reference in the Registration Statement and the Prospectus (in each case exclusive of any amendments or supplements thereto subsequent to the date of this Agreement) (i)
there has been no material adverse change or any development that could reasonably be expected to result in a material adverse change, in the condition (financial or other), results of operations, business, properties, management or prospects of
the Company and the Subsidiary (as defined below) taken as a whole (in any such case, a “Material Adverse Effect”); (ii) except as otherwise disclosed in the Prospectus (in each case exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), neither the Company nor the Subsidiary has incurred any liability or obligation or entered into any transaction or agreement that, individually or in the aggregate, is
material with respect to the Company and the Subsidiary taken as a whole, which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company or the Subsidiary on any class of its respective share capital.
(i) Each of
the Company and the Subsidiary has been duly organized and is validly existing as a company under the laws of the State of Israel or Delaware, respectively, and has power and authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement; and each of the Company and the Subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or
to be in good standing would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company has not been designated as a “breaching company” (within the meaning of the Israeli Companies Law,
1999) by the Registrar of Companies of the State of Israel.
8
(j) RedHill Biopharma Inc. (the “Subsidiary”) is the Company’s
only significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission). Except as set forth in the Registration Statement and the Prospectus, the Company owns, directly or indirectly, all of the equity
interests of the Subsidiary free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiary are validly issued and are fully paid, nonassessable and
free of preemptive and similar rights. The Subsidiary is not currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on the Subsidiary’s capital stock, from repaying to the
Company any loans or advances to the Subsidiary from the Company or from transferring any of the Subsidiary’s property or assets to the Company.
(k) The
authorized, issued and outstanding share capital of the Company as of the date of this Agreement is as set forth in the column entitled “Actual” and in the corresponding line items under the caption “Capitalization” in the Prospectus. The issued
and outstanding shares of the Company have been duly authorized and validly issued and are fully paid and non-assessable and were issued in compliance with all applicable foreign (including Israeli), state and federal securities and “blue-sky”
laws; and none of the outstanding shares of the Company was issued in violation of any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Company or any other person.
(l) This
Agreement has been duly authorized, executed and delivered by the Company.
(m) The Deposit Agreement has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to
general principles of equity; upon due issuance of ADSs against the deposit of the Ordinary Shares in respect thereof in accordance with the Deposit Agreement, such ADSs will be duly and validly issued and the owners and holders thereof will be
entitled to the rights specified therein and in the Deposit Agreement; and the Deposit Agreement and the ADSs conform in all material respects to the descriptions thereof contained in the Prospectus.
(n) The
Placement ADSs to be sold by the Company under this Agreement and the Underlying Shares have been duly authorized for issuance and sale to the Agents pursuant to this Agreement and, when issued and/or delivered by the Company or the Depositary,
as the case may be, and when delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein for the Placement ADSs, will be validly issued, fully paid and non-assessable; no holder of the Placement ADSs
or the Underlying Shares will be subject to personal liability by reason of being such a holder; and the issuance and sale of the Placement ADSs and the Underlying Shares to be issued and sold by the Company under this Agreement are not subject
to any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Company or any other person.
(o) Except as
described in the Registration Statement and the Prospectus, or as would not, individually or in the aggregate, have a Material Adverse Effect, the Company has not had any product or manufacturing site (whether Company-owned or that of a contract
manufacturer for Company products or product candidates) subject to a governmental authority (including, without limitation, the Food and Drug Administration of the U.S. Department of Health and Human Services (the “FDA”)) shutdown or import or export prohibition, nor received any FDA Form 483 or other governmental authority notice of inspectional observations, “warning letters,” “untitled letters,” requests to make changes to the
Company products, processes or operations, or similar correspondence or notice from the FDA or other governmental authority alleging or asserting material noncompliance with any applicable laws. To the Company’s knowledge, neither the FDA nor any
other governmental authority has threatened such action. Neither the Company nor the Subsidiary have received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court,
arbitrator, regulatory agency or other governmental authority or third party alleging that any product operation or activity is in violation of any health care laws, nor to the Company’s knowledge, is any such claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action threatened.
9
(p) The
Company, the Subsidiary, and their respective directors and officers and, to the Company’s knowledge, their respective employees and agents have operated and currently are in compliance in all material respects with applicable statutes and
implementing regulations administered or enforced by the FDA, the U.S. Drug Enforcement Administration or any other federal, state, local, or foreign (including Israeli) governmental authority, including, without limitation, the federal Food,
Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the federal False Statements Law (42 U.S.C. § 1320a-7b(a)), the Civil Monetary
Penalties Law (42 U.S.C. § 1320a-7a), all criminal laws relating to health care fraud and abuse, including, but not limited, to 18 U.S.C. §§ 286 and 287, the exclusions law (42 U.S.C. § 1320a-7), the statutes, regulations and directives of
Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act) and all other government funded or sponsored healthcare programs, the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. §
1320d et seq.), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (42 U.S.C. § 17921 et seq.), and all other regulations promulgated pursuant to such laws; and any other similar local, state, federal or
foreign law or regulation. Neither the Company nor the Subsidiary is a party to, and do not have any ongoing reporting obligations pursuant to, any corporate integrity agreement, deferred prosecution agreement, monitoring agreement, consent
decree, settlement order, plan of correction or similar agreement imposed by any governmental authority. Neither the Company, the Subsidiary, nor, to the knowledge of the Company, any of their respective directors, officers, employees or agents
has been debarred, excluded or suspended from participation in or receiving payment from any federal, state or local government health care program or is subject to an audit, investigation, proceeding or other similar action by any governmental
authority that could reasonably be expected to result in debarment, suspension or exclusion.
(q) The
Ordinary Shares, all outstanding warrants and convertible securities and the Company’s articles of association and other organizational documents conform in all material respects to the respective statements relating thereto contained in the
Registration Statement and the Prospectus.
10
(r) Neither
the Company nor the Subsidiary is (a) in violation of its organizational documents or (b) in default in the performance or observance of any obligation, agreement, covenant or condition contained (i) in any of its convertible notes, warrants and
all other instruments, agreements and documents filed or incorporated by reference as exhibits to the Registration Statement (the “Subject Instruments”) or (ii) in any other contract, indenture,
mortgage, deed of trust, loan or credit agreement, bond, note, debenture, evidence of indebtedness, swap agreement, hedging agreement, lease or other instrument or agreement to which it is a party or by which it is bound or to which any of its
property or assets is subject, other than the Company’s organizational documents, (these items, together with the Subject Instruments, are collectively referred to herein as the “Company Documents”)
except (solely in the case of Company Documents other than Subject Instruments) for such defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Neither the Company nor the
Subsidiary has received funding or grants from the Israel Innovation Authority (formerly known as the Office of the Chief Scientist) of the Israeli Ministry of Economy and Industry or the Israel Investment Authority for Industry and Economy
Development (formerly known as the Investment Center) of the Israeli Ministry of Economy and Industry. Neither the Company nor the Subsidiary has received any notice denying, revoking or modifying any “approved enterprise” or “benefited
enterprise” or “preferred enterprise” status under the Israeli Law for the Encouragement of Capital Investments, 5719-1959, with respect to any of the Company or the Subsidiary’s facilities or operations or any other tax benefits received by the
Company or the Subsidiary, as applicable, under such law. All information supplied by the Company or the Subsidiary with respect to the applications or notifications relating to such “approved enterprise” status, “benefited enterprise” status and
“preferred enterprise” status was true, correct and complete in all material respects when supplied to the appropriate authorities. The Company is in compliance in all material respects with the Israeli Companies Law, 1999 and the regulations
promulgated thereunder (the “Israeli Companies Law”) and the Israeli Securities Law, 1968 and the regulations promulgated thereunder (the “Israeli Securities Law”).
The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein, therein and in the Registration Statement and the Prospectus (including the issuance and sale of the Placement ADSs and the
use of the proceeds from the sale of the Placement ADSs as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations under this Agreement do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a breach of, or default, termination event or repayment event under, or result in the creation or imposition of any lien upon any property or assets of the Company or the
Subsidiary pursuant to (i) any Company Documents, except (solely in the case of Company Documents other than Subject Instruments) for such conflicts, breaches, defaults or liens that would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (ii) the provisions of the organizational documents of the Company or the Subsidiary, or (iii) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction over the Company or the Subsidiary or any of the assets, properties or operations of the Company or the Subsidiary, as applicable, except with respect to this clause
(iii) for any such violation that would not, individually or in the aggregate reasonably be expected to result in a Material Adverse Effect or materially and adversely affect the consummation of the transactions contemplated in this Agreement or
the performance by the Company of its obligations under this Agreement. All corporate approvals on the part of the Company, including under Chapter 5 of Part VI of the Israeli Companies Law, for the offer or sale of the Placement ADSs and the
transactions contemplated hereby have been obtained.
(s) No labor
dispute with the employees of the Company or the Subsidiary exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of the principal suppliers,
manufacturers, customers or contractors of the Company or the Subsidiary which would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(t) There is
no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or the
Subsidiary or to which any of the properties or assets of the Company or the Subsidiary is the subject that is required to be disclosed in the Registration Statement or the Prospectus (other than as disclosed therein), or which would reasonably
be expected, individually or in the aggregate, to result in a Material Adverse Effect or to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations
under this Agreement.
11
(u) The
information in the Prospectus under the captions “Risk Factors” and “Material Tax Considerations,” and the information in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2020 under the captions “Item 4. Information
on the Company—B. Business Overview—Intellectual Property,” “Item 4. Information on the Company—B. Business Overview—Government Regulations and Funding,” “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources,”
“Item 6. Directors, Senior Management and Employees—B. Compensation,” “Item 6. Directors, Senior Management and Employees—C. Board Practices,” “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions,” “Item 8.
Financial Information —A. Financial Statements and Other Financial Information—Legal Proceedings,” “Item 10. Additional Information—B. Memorandum and Articles of Association—Description of Securities—Ordinary Shares,” and “Item 10. Additional
Information—E. Taxation,” in each case to the extent that it constitutes matters of law, summaries of legal matters, summaries of provisions of the Company’s organizational documents or any other instruments or agreements, summaries of legal
proceedings, or legal conclusions, is correct in all material respects; all descriptions in the Registration Statement and the Prospectus of any other Company Documents are accurate in all material respects; and there are no franchises,
contracts, indentures, mortgages, deeds of trust, loan or credit agreements, bonds, notes, debentures, evidences of indebtedness, leases or other instruments, agreements or documents required to be described or referred to in the Registration
Statement or the Prospectus or the documents incorporated or deemed to be incorporated by reference therein or to be filed as exhibits to the Registration Statement or the documents incorporated or deemed to be incorporated by reference therein
which have not been so described and filed as required.
(v) Except as
otherwise disclosed in the Registration Statement or the Prospectus, each of the Company and the Subsidiary owns, or has obtained valid and enforceable licenses for, the inventions, patent applications, patents, trademarks, trade names, service
names, copyrights, trade secrets and other intellectual property (1) described in the Registration Statement and the Prospectus as being owned or licensed by it or (2) which are necessary for the conduct of its business as currently conducted or
as currently proposed in the Registration Statement and the Prospectus to be conducted (collectively, “Intellectual Property”) except in the case of clause (2) where the failure to own, possess or
acquire such rights would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as described in the Registration Statement and the Prospectus or as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, to the Company’s knowledge: (i) there are no third parties who have rights to any Intellectual Property, except for Intellectual Property rights which are licensed by the Company or the
Subsidiary from or granted by the Company or the Subsidiary to its partners, licensors, licensees and other third parties and customary reversionary rights of third-party licensors with respect to Intellectual Property that is licensed to the
Company or the Subsidiary; and (ii) there is no infringement by third parties of any Intellectual Property. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no pending or,
to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company or the Subsidiary’s rights in or to any Intellectual Property, and the Company is unaware of any facts which would form a reasonable
basis for any such action, suit, proceeding or claim; (B) challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit,
proceeding or claim; or (C) asserting that the Company or the Subsidiary infringes or otherwise violates, or would, upon the commercialization of any product or service described in the Registration Statement or the Prospectus as under
development, infringe or violate, any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any such action,
suit, proceeding or claim. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each of the Company and the Subsidiary has complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company or the Subsidiary, as applicable, and to the knowledge of the Company all such agreements are in full force and effect. The product candidates described in the Registration Statement and the
Prospectus as under development by the Company or the Subsidiary fall within the scope of the claims of one or more patents or patent applications owned by, or exclusively licensed to, the Company or the Subsidiary, as applicable.
12
(w) The
current status of discussions with regulatory authorities is accurately described in the Registration Statement and the Prospectus. The clinical, pre-clinical and other studies and tests conducted by or on behalf of or sponsored by the Company or
the Subsidiary that are described or referred to in the Registration Statement and the Prospectus were and, if still pending, are being conducted in compliance in all material respects with all statutes, laws, rules, regulations, guidance and
protocols, as applicable (including, without limitation, those administered by the FDA, the Israeli Ministry of Health or by any foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed
by the FDA, and the relevant laws, rules and regulations of the Israeli Ministry of Health), except for any non-compliance that would not reasonably be expected to result in a Material Adverse Effect. The descriptions of the results of such
studies and tests that are described or referred to in the Registration Statement and the Prospectus are accurate in all material respects and fairly present in all material respects the data derived from such studies and tests, and the Company
has no knowledge of other studies or tests the results of which are materially inconsistent with the results described or referred to in the Registration Statement and the Prospectus. Neither the Company nor the Subsidiary has received any
notices of non-compliance from the Israeli Ministry of Health, the FDA or any other foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA with respect to any ongoing
clinical or pre-clinical studies or tests requiring the termination or suspension of such studies or tests, except for any termination or suspension that would not reasonably be expected to result in a Material Adverse Effect. For the avoidance
of doubt, the Company makes no representation or warranty that the results of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company or the Subsidiary will be sufficient to obtain governmental approval from
the FDA or any foreign (including Israeli), federal, state or local governmental body exercising comparable authority.
(x) Neither
the Company nor the Subsidiary has failed to file with applicable regulatory authorities any filing, declaration, listing, registration, report or submission that is required to be so filed for the current conduct of its business, except for any
filing, declaration, listing, registration, report or submission the failure of which to be filed would not reasonably be expected to result in a Material Adverse Effect. All such filings were in material compliance with applicable laws, rules
and regulations when filed and no material deficiencies that have not been remedied have been asserted by any applicable regulatory authority (including, without limitation, the FDA or any Israeli or other foreign, federal, state or local
governmental or regulatory authority performing functions similar to those performed by the FDA) with respect to any such filings, declarations, listings, registrations, reports or submissions.
(y) (A) No
filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (including Israeli), (B) no authorization, approval, vote or consent of
any holder of shares or other securities of the Company or creditor of the Company, (C) no authorization, approval, waiver or consent under any Company Document or organizational document, and (D) no authorization, approval, vote or consent of
any other person or entity, is necessary or required to be obtained by the Company for the authorization, execution, delivery or performance by the Company of this Agreement, for the offering of the Placement ADSs as contemplated by this
Agreement, for the issuance, sale or delivery of the Placement ADSs to be sold by the Company pursuant to this Agreement, for the issuance of the Underlying Shares or for the consummation of any of the other transactions contemplated by this
Agreement, in each case on the terms contemplated by the Registration Statement and the Prospectus, except (A) such as have been obtained under applicable laws (domestic or foreign, including Israeli) including, without limitation, the Securities
Act and the Exchange Act, (B) the listing, subject only to notice of issuance, of the ADSs on the Nasdaq Global Market and (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or
blue sky laws in connection with the purchases and distributions of the Placement ADSs by the Agents.
13
(z) Each of
the Company and the Subsidiary possesses such franchises, grants, permits, easements, licenses, approvals, consents, certificates, orders and other authorizations (collectively, “Governmental Licenses”)
issued by the appropriate self-regulatory, federal, state, local or foreign (including Israeli) regulatory agencies, authorities or bodies (including, without limitation, those administered by the FDA or by any foreign (including Israeli),
federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA, including the relevant guidelines of the Israeli Ministry of Health) necessary to conduct the business now operated by it;
and, except as would not, individually or in the aggregate, result in a Material Adverse Effect, each of the Company and the Subsidiary is in compliance with the terms and conditions of all such Governmental Licenses applicable to it, all such
Governmental Licenses are valid and in full force and effect; and neither the Company nor the Subsidiary has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses, and to the knowledge of
the Company, no such proceedings are threatened.
(aa) Each of
the Company and the Subsidiary has good and marketable title in fee simple to all real property owned by it (if any) and good title to all other properties and assets owned by it, in each case, free and clear of all liens except such as (a) are
described in the Registration Statement and the Prospectus or (b) are not, individually or in the aggregate, material to the Company and the Subsidiary, taken as a whole, are not required to be disclosed in the Registration Statement or the
Prospectus, do not, individually or in the aggregate, materially affect the value of such property; all real property, buildings and other improvements, and all equipment and other property held under lease or sublease by the Company or the
Subsidiary are held by it under valid, subsisting and enforceable leases or subleases, as the case may be, with, solely in the case of leases or subleases relating to real property, buildings or other improvements, such exceptions as are not
material and do not interfere in any material respect with the use made or proposed to be made of such property and buildings or other improvements by the Company or the Subsidiary, as applicable, and all such leases and subleases are in full
force and effect; and neither the Company nor the Subsidiary has received any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or the Subsidiary under any of the leases or subleases mentioned
above or affecting or questioning the rights of the Company or the Subsidiary to the continued possession of the leased or subleased premises or to the continued use of the leased or subleased equipment or other property except for such claims
which, if successfully asserted against the Company or the Subsidiary, as applicable, would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(bb) Neither
the Company nor the Subsidiary is, and upon the issuance and sale of the Placement ADSs as herein contemplated and the receipt and application of the net proceeds therefrom as described in the Prospectus under the caption “Use of Proceeds,”
neither of them will be, an “investment company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
14
(cc) Except
as described in the Registration Statement and the Prospectus and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (A) neither the Company nor the Subsidiary is in violation of
any federal, state, local or foreign (including Israeli) statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”),
(B) each of the Company and the Subsidiary has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements, (C) there are no pending or, to the Company’s knowledge,
threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, Liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or the Subsidiary
and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting
the Company or the Subsidiary relating to Hazardous Materials or any Environmental Laws.
(dd) Except
as described in the Registration Statement and the Prospectus, there are no persons with registration rights or other similar rights to have any securities (debt or equity) (A) registered pursuant to the Registration Statement or included in the
Placements contemplated by this Agreement or (B) otherwise registered by the Company under the Securities Act, and there are no persons with co-sale rights, tag-along rights or other similar rights to have any securities (debt or equity) included
in the Placements contemplated by this Agreement or sold in connection with the sale of the Placement ADSs, except in each case for such rights that have been duly waived in writing; and the Company has given all notices required by, and has
otherwise complied in all material respects with its obligations under, all registration rights agreements, co-sale agreements, tag-along agreements and other similar agreements in connection with the transactions contemplated by this Agreement.
(ee) The ADSs
are listed on the Nasdaq Global Market and the Placement ADSs being sold hereunder by the Company have been approved for listing, subject only to official notice of issuance, on the Nasdaq Global Market.
(ff) All of
the information provided to the Agents or to counsel for the Agents by the Company, its counsel, its officers and directors and the holders of any securities (debt or equity) or options to acquire any securities of the Company in connection with
the offering of the Placement ADSs is true, complete, correct and compliant with the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and any letters, filings or other
supplemental information provided to FINRA pursuant to FINRA Rules is true, complete and correct.
(gg) Each of
the Company and the Subsidiary has filed all foreign (including Israeli), federal, state and local tax returns that are required to be filed or has obtained extensions thereof, and all such tax returns are complete and accurate, except as would
not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each of the Company and the Subsidiary has paid all taxes (including, without limitation, any estimated taxes) required to be paid and any other
assessment, fine or penalty, to the extent that any of the foregoing is due and payable, except for any such tax, assessment, fine or penalty that is currently being contested in good faith by appropriate actions and except for such taxes,
assessments, fines or penalties the nonpayment of which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
15
(hh) Each of
the Company and the Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which it is engaged; all material policies of insurance
and any fidelity or surety bonds insuring the Company or the Subsidiary or the business, assets, employees, officers and directors of the Company or the Subsidiary, as applicable, are in full force and effect; each of the Company and the
Subsidiary is in compliance with the terms of such policies and instruments in all material respects; there are no material claims by the Company or the Subsidiary under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the Company nor the Subsidiary has been refused any material insurance coverage sought or applied for; and neither the Company nor the Subsidiary has reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers at a cost that would not, individually or in the aggregate, result in a Material Adverse Effect.
(ii) Each of
the Company and the Subsidiary maintains and has established and maintained effective “internal control over financial reporting” (as defined in Rule 13a-15 under the Exchange Act) designed to provide reasonable assurance that (A) transactions
are executed in accordance with management’s general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. Except as described in the Registration Statement and the Prospectus, there has not been (1) at any time during the Company’s five consecutive fiscal years ended with and including the Company’s most recent fiscal year for
which audited financial statements are included in the Registration Statement and the Prospectus or at any time subsequent thereto, any material weakness (as defined in Rule 1-02 of Regulation S-X of the Commission) in the Company’s internal
control over financial reporting (whether or not remediated), or (2) any fraud, whether or not material, involving management or other employees who have a role in the Company’s internal control over financial reporting and, since the end of the
Company’s most recent fiscal year for which audited financial statements are included in the Registration Statement and the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company has established, and maintains, “disclosure controls and procedures” (as defined in Rules 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company relating to the Company and the Subsidiary in the reports that it files or submits under the Exchange Act are
recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.
16
The Company’s independent public accountants and the audit committee of the Company’s board of directors have been advised of all material weaknesses, if
any, and significant deficiencies (as defined in Rule 1-02 of Regulation S-X of the Commission), if any, in the Company’s internal control over financial reporting and of all fraud, if any, whether or not material, involving management or other
employees who have a role in the Company’s internal control over financial reporting, in each case that occurred or existed, or was first detected, at any time during the Company’s five consecutive fiscal years ended with and including the Company’s
most recent fiscal year for which audited financial statements are included in the Registration Statement and the Prospectus or at any time subsequent thereto.
(jj) There is
and has been no failure on the part of the Company or on the part of any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) with which any of them is required to comply, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(kk) Neither
the Registration Statement nor the ADS Registration Statement is the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act, and the Company is not the subject of a pending proceeding under Section 8A of
the Securities Act. The Company has provided the Agents with true, complete and correct copies of any written comments received from the Commission by the Company or its legal counsel or accountants with respect to the Registration Statement, the
Prospectus, any issuer free writing prospectus or any document incorporated or deemed to be incorporated by reference therein and of all written responses thereto and with respect to the ADS Registration Statement (in each case other than comment
letters or written responses that are publicly available on EDGAR), and no such comments remain unresolved.
(ll) Neither
the Company nor the Subsidiary has taken, and neither the Company nor the Subsidiary will take, directly or indirectly, any action designed to or that would constitute or that would reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security to facilitate the sale or resale of the Placement ADSs. In addition, neither the Company nor the Subsidiary has engaged, and neither the Company nor the Subsidiary will engage, in any form of
solicitation, advertising or other action constituting an offer or a sale under the Israeli Securities Law in connection with the transactions contemplated hereby which would require the Company to publish a prospectus in the State of Israel
under the laws of the State of Israel. All grants and issuances of the Company’s securities (including under any share purchase or other equity incentive plans) were made in compliance with the Israeli Securities Law.
(mm) Any
statistical, demographic, market-related and similar data included in the Registration Statement or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate and accurately reflects in all material
respects the materials upon which such data is based or from which it was derived, and the Company has delivered true, complete and correct copies of such materials to the Agents.
(nn) Neither
the Company nor the Subsidiary, nor, to the Company’s knowledge, any employee or agent of the Company or the Subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in the Registration Statement or the Prospectus.
(oo) The
operations of the Company and the Subsidiary are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Israel Prohibition on Money Laundering Law,
5760-2000, as amended, the Israel Prohibition on Funding of Terrorism Law, 5765-2005, as amended, and the regulations and orders promulgated thereunder, the money laundering statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or the Subsidiary with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
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(pp) Neither
the Company nor the Subsidiary, nor any director or officer, nor, to the knowledge of the Company, any agent, employee, affiliate or other person acting on behalf of the Company or the Subsidiary has, in the course of its actions for, or on
behalf of, the Company or the Subsidiary (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any domestic
government official, “foreign official” (as defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”) or government
employee from corporate funds; (iii) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or regulation, including without limitation, the provisions of Sections 291 and 291A of the Israel Penal
Law, 5737-1977; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any domestic government official, such foreign official or employee; and the Company and the Subsidiary and, to the
knowledge of the Company, the affiliates of the Company and the Subsidiary have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(qq) Neither
the Company nor the Subsidiary, nor any director or officer of the Company or the Subsidiary, nor, to the knowledge of the Company, any agent, employee or representative of the Company or the Subsidiary, affiliate or other person acting on behalf
of the Company or the Subsidiary is currently the subject or target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department or the U.S.
Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority (collectively, “Sanctions”), nor is the Company or the Subsidiary located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without
limitation, Cuba, the Democratic Republic of the Congo, Iran, North Korea, the Crimean region, Sudan and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the
proceeds of the offering of the Placement ADSs hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business
with any person that, at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the Company and the Subsidiary have not knowingly engaged in, are not
now knowingly engaged in, and will not knowingly engage in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
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(rr) Each
benefit, pension and compensation plan, agreement policy and arrangement that is maintained, administered or contributed to by the Company for current or former employees or directors of the Company or the Subsidiary, or with respect to which any
of such entities would reasonably be expected to have any current, future or contingent liability or responsibility, has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations,
except as would not individually or in the aggregate be expected to have a Material Adverse Effect and except with respect to matters over which the Company does not have control; the Company has complied with all applicable statutes, orders,
rules and regulations in regard to such plans, agreements, policies and arrangements, except as would not individually or in the aggregate be expected to have Material Adverse Effect; the fair market value of the assets of each such plan,
agreement, policy and arrangement which is required or intended to be funded (excluding for these purposes accrued but unpaid contributions) exceeds in all material respects the present value of all benefits accrued or earned or payments due
under such plan, agreement, policy or arrangement determined using reasonable actuarial assumptions. The liabilities reflected on the relevant entity’s financial statements with respect to each such plan, agreement, policy and arrangement which
is not required or intended to be funded accurately reflects in all material respects the present value of all benefits earned or accrued or payments due under such plan, agreement, policy or arrangement determined using reasonable actuarial
assumptions.
(ss) Except
as disclosed in the Registration Statement and the Prospectus, (i) neither the Company nor the Subsidiary has a lending or similar relationship with either Agent or any bank or other lending institution affiliated with either Agent; (ii) the
Company will not, directly or indirectly, use any of the proceeds from the sales of the Placement ADSs by the Company hereunder to reduce or retire the balance of any loan or credit facility extended by either Agent or any of their respective
“affiliates” or “associated persons” (as such terms are used in FINRA Rule 5121) or otherwise direct any such proceeds to the Agents or any of their respective “affiliates” or “associated persons” (as so defined); and (iii) there are and have
been no transactions, arrangements or dealings between the Company or the Subsidiary, on one hand, and the Agents or any of their respective “affiliates” or “associated persons” (as so defined), on the other hand, that, under FINRA Rule 5110 or
5121, must be disclosed in a submission to FINRA in connection with the offering of the Placement ADSs contemplated hereby or disclosed in the Registration Statement or Prospectus.
(tt) Except
as disclosed in the Registration Statement and the Prospectus, none of the persons who were officers or directors of the Company as of the date of the hereof has given oral or written notice to the Company of his or her resignation, nor has any
such officer or director been terminated by the Company or otherwise removed from his or her office or from the board of directors, as the case may be (including, without limitation, any such termination or removal which is to be effective as of
a future date) nor is any such termination or removal under consideration by the Company or its board of directors.
(uu) No
transaction, stamp or other issuance or transfer taxes or duties, and, assuming that neither Agent is otherwise subject to taxation in Israel due to Israeli tax residence or the existence of a permanent establishment in Israel, no capital gains,
income, withholding or other taxes, are payable by or on behalf of either Agent to the State of Israel or to any political subdivision or authority thereof or therein in connection with: (i) the issuance, sale and delivery of the Placement ADSs
by the Company; (ii) the purchase from the Company, and the initial sales and deliveries by the Agents of the Placement ADSs to purchasers thereof or (iii) the execution and delivery of this Agreement or any other document to be furnished
hereunder.
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(vv) There
are no business relationships or related party transactions involving the Company or the Subsidiary or, to the knowledge of the Company, any other person that are required to be described in the Prospectus that have not been described as
required.
(ww) Neither
the Company nor the Subsidiary is a party to or otherwise bound by any instrument or agreement that limits or prohibits or under its terms could limit or prohibit, directly or indirectly, the Company or the Subsidiary from paying any dividends or
making other distributions on its respective share capital except as described in the Registration Statement and the Prospectus.
(xx) There is
not a broker, finder or other party that is entitled to receive from the Company or the Subsidiary any brokerage or finder’s fee or other fee or commission as a result of any of the transactions contemplated by this Agreement, except for
discounts and commissions in connection with the sales of the Placement ADSs through the Agents pursuant to this Agreement and the other fees and expense reimbursements set forth herein.
(yy) Under
current laws and regulations of the State of Israel and any political subdivision thereof, all dividends and other distributions declared and payable on the Placement ADSs or the Ordinary Shares may be paid by the Company to the holder thereof in
United States dollars or New Israeli Shekels that may be converted into foreign currency and freely transferred out of the State of Israel.
(zz) The
Company has validly and irrevocably appointed RedHill Biopharma Inc. as its authorized agent for service of process pursuant to this Agreement and in connection with the Registration Statement.
(aaa) Neither
the Company nor the Subsidiary nor any of their properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or
otherwise) under the laws of the State of Israel.
(bbb) The
Company has the power to submit, and pursuant to Section 19 of this Agreement, has legally, validly and irrevocably submitted, to the personal jurisdiction of each U.S. federal court or state court located in the Borough of Manhattan, the City of
New York, New York, U.S.A.
(ccc) Each of
the Company and the Subsidiary has been and is in compliance with all applicable laws, rules and regulations, except where failure to be so in compliance could not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(ddd) Except
as disclosed in the Prospectus, neither the Company nor the Subsidiary has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in any preliminary
prospectus, the Prospectus or any free writing prospectus, or referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company or the Subsidiary or, to
the Company’s knowledge, by any other party to any such contract or agreement, which threat of termination or non-renewal has not been rescinded as of the date hereof.
(eee) Prior
to the later of (i) each Settlement Date and (ii) the completion of the Agents’ distribution of the Placement ADSs, the Company has not distributed and will not distribute any offering material in connection with the offering and sales of the
Placement ADSs other than the Registration Statement, the ADS Registration Statement, the Prospectus or any free writing prospectus reviewed and consented to by the Agents, the free writing prospectuses, if any, identified on Exhibit A hereto.
20
(fff) The
Company acknowledges and agrees that the Agents have informed the Company that the Agents may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell ADSs for their own respective accounts while this Agreement is
in effect; provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect (except to the extent the Designated Agent may engage in sales of Placement ADSs purchased or
deemed purchased from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not be deemed to have authorized or consented to any such purchases or sales by the Agents, except as may be otherwise agreed by the
Company and the Agents.
(ggg) The
Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous equity transaction.
(hhh) The
interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement and the Prospectus fairly presents the information called for in all material respects and has been prepared in
accordance with the Commission’s rules and guidelines applicable thereto.
(iii) Except
as disclosed in the Registration Statement and the Prospectus, the Company does not anticipate being treated as a “passive foreign investment company,” as such term is defined in the Internal Revenue Code of 1986, as amended (the “Code”), for the fiscal year ended December 31, 2021. Neither the Company nor the Subsidiary is, and, after giving effect to the placements of the Placement ADSs and the application of the proceeds
thereof, neither of them will be, a “controlled foreign corporation” as defined by the Code.
7. Covenants
of the Company. The Company covenants and agrees with the Agents that:
(a) Registration
Statement Amendments. After the date of this Agreement and during any period in which the Prospectus relating to any Placement ADSs is required to be delivered by the Agents under the Securities Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar rule); (i) the Company will notify the Agents promptly of the time when any subsequent amendment to the Registration Statement, other than Incorporated
Documents, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus, other than Incorporated Documents, has been filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information; (ii) the Company will prepare and file with the Commission, promptly upon the Agents’ request, any amendments or supplements to the Registration Statement or Prospectus that,
in the Agents’ reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement ADSs by the Agents (provided, however, that the failure of the Agents to make such request shall not relieve the Company of any
obligation or liability hereunder, or affect the Agents’ right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agents shall have with respect to the failure by
the Company to make such filing (but without limiting the Agents’ rights under Section 9 hereof) will be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or
supplement to the Registration Statement or Prospectus, other than Incorporated Documents, relating to the Placement ADSs or a security convertible into or exchangeable or exercisable for the Placement ADSs unless a copy thereof has been
submitted to the Agents within a reasonable period of time before the filing and the Agents have not reasonably objected thereto (provided, however, that the failure of the Agents to make such objection shall not relieve the Company of any
obligation or liability hereunder, or affect the Agents’ right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agents shall have with respect to the Company’s
making such filing notwithstanding the Agents’ objection (but without limiting the Agents’ rights under Section 9 hereof) will be to cease making sales under this Agreement) and the Company will furnish to the Agents at the time of filing thereof
a copy of any Incorporated Document, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus, other than Incorporated Documents, to be filed with the Commission as required
pursuant to the applicable paragraph of Rule 424(b) of the Securities Act and, in the case of any Incorporated Document, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed.
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(b) Notice
of Commission Stop Orders. The Company will advise the Agents, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the Placement ADSs for offering or sale in any jurisdiction or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the Agents promptly after it receives any request by the Commission for any amendments to the
Registration Statement or any amendment or supplements to the Prospectus or for additional information related to the offering of the Placement ADSs or for additional information related to the Registration Statement or the Prospectus.
(c) Delivery
of Prospectus; Subsequent Changes. During any period in which the Prospectus relating to the Placement ADSs is required to be delivered by the Agents under the Securities Act with respect to the offer and sale of the Placement ADSs
(including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar rule), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in
force, and will file on or before their respective due dates (taking into account any extensions available under the Exchange Act) all reports and any definitive proxy or information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Agents to suspend the offering of Placement ADSs during such period and the Company will promptly amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance. If the Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities
Act, it will use its best efforts to comply with the provisions thereof and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agents promptly of all such filings if not available on EDGAR.
(d) Listing
of Placement ADSs. During any period in which the Prospectus relating to the Placement ADSs is required to be delivered by the Agents under the Securities Act with respect to the offer and sale of the Placement ADSs (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or a similar rule), the Company will use its commercially reasonable efforts to cause the Placement ADSs to be listed on the Nasdaq Global Market.
The Company will timely file with Nasdaq all material documents and notices required by Nasdaq of companies that have or will issue securities that are traded on the Nasdaq Global Market.
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(e) Delivery
of Registration Statement and Prospectus. The Company will furnish to the Agents and their counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all Incorporated Documents) and all
amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which the Prospectus relating to the Placement ADSs is required to be delivered under the Securities Act (including all
Incorporated Documents filed with the Commission during such period), in each case as soon as reasonably practicable and in such quantities as the Agents may from time to time reasonably request and, at the Agents’ request, will also furnish
copies of the Prospectus to each exchange or market on which sales of the Placement ADSs may be made; provided, however, that the Company shall not be required to
furnish any document (other than the Prospectus) to the Agents to the extent such document is available on EDGAR.
(f) Earnings
Statement. The Company will make generally available to its security holders and to the Agents as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement
covering a 12-month period that satisfies the provisions of Section 11(a) of and Rule 158 under the Securities Act.
(g) Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated in accordance with the provisions of Section 11 hereunder, will pay all expenses incident to the performance of its obligations
hereunder, including expenses relating to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of the Prospectus and of each amendment and supplement thereto and of this Agreement and
such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement ADSs, (ii) the preparation, issuance, sale and delivery of the Placement ADSs and any taxes due or payable in
connection therewith, (iii) the qualification of the Placement ADSs under securities laws in accordance with the provisions of Section 7(w) of this Agreement, including filing fees (provided, however, that any fees or disbursements of counsel for
the Agents in connection therewith shall be paid by the Agents except as set forth in clauses (vii) and (viii) below), (iv) the printing and delivery to the Agents and its counsel of copies of the Prospectus and any amendments or supplements
thereto, and of this Agreement, (v) the fees and expenses incurred in connection with the listing or qualification of the Placement ADSs for trading on the Nasdaq Global Market, (vi) the filing fees and expenses, if any, owed to the Commission or
FINRA and the fees and expenses of the Depositary for the ADSs, (vii) the reasonable fees and disbursements of the Agents’ outside legal counsel (A) in an amount not to exceed $75,000 in connection with the establishment of the offering program
contemplated by this Agreement (in addition to the fees and associated expenses referred to in clause (vi) above), and (B) in an amount not to exceed an additional $15,000 per fiscal quarter thereafter.
(h) Use of
Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
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(i) Notice
of Other Sales. Without the prior written consent of the Agents, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Ordinary Shares or ADSs (other than
the Placement ADSs offered pursuant to this Agreement) or securities convertible into or exchangeable or exercisable for Ordinary Shares or ADSs, warrants or any rights to purchase or acquire Ordinary Shares or ADSs during the period beginning on
the fifth Trading Day immediately prior to the date on which any Placement Notice is delivered to the Designated Agent hereunder and ending on the second Trading Day immediately following the final Settlement Date with respect to Placement ADSs
sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement ADSs covered by a Placement Notice, the date of such suspension or termination); and will not directly or
indirectly in any other “at the market offering” or other similar continuous equity transaction (such as an equity line of credit), offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Ordinary Shares or
ADSs (other than the Placement ADSs offered pursuant to this Agreement) or securities convertible into or exchangeable or exercisable for Ordinary Shares or Placement ADSs, warrants or any rights to purchase or acquire, Ordinary Shares or ADSs
prior to the later of the termination of this Agreement and the sixtieth day immediately following the final Settlement Date with respect to Placement ADSs sold pursuant to such Placement Notice; provided,
however, that such restrictions will not be required in connection with the Company’s issuance or sale of (i) Ordinary Shares or ADSs, options to purchase Ordinary Shares or ADSs, or other securities under
the Company’s existing equity incentive plans, or Ordinary Shares or ADSs issuable upon the exercise of options or vesting of other securities, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend
reinvestment plan (but not Ordinary Shares or ADSs subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented, (ii) Ordinary Shares or ADSs issuable upon conversion
of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise agreed to in writing by the Agents and (iii) Ordinary Shares or ADSs or
securities convertible into or exchangeable for Ordinary Shares or ADSs as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital
raising purposes.
(j) Change
of Circumstances. The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement Notice or sell Placement ADSs, advise the Agents promptly after it shall have received notice or obtained knowledge
of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document provided or required to be provided to the Agents pursuant to this Agreement.
(k) Due
Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence review conducted by the Agents and their respective affiliates, agents and counsel from time to time in connection with
the transactions contemplated hereby, including providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agents may reasonably request.
(l) Required
Filings Relating to Placement of Placement ADSs. The Company agrees that on or prior to such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of
Rule 424(b) under the Securities Act, which prospectus supplement will set forth, within the relevant period, the number or amount of Placement ADSs sold through the Agents, the Net Proceeds to the Company and the compensation payable by the
Company to the Agents with respect to such Placement ADSs, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of
such exchange or market; provided, that, unless a prospectus supplement containing such information is required to be filed under the Securities Act, the requirement of this Section 7(l) may be satisfied
by the Company’s inclusion in the Company’s next-filed quarterly report on Form 6-K or Form 20-F, as applicable, of the number or amount of Placement ADSs sold through the Agents, the Net Proceeds to the Company and the compensation payable by
the Company to the Agents with respect to such Placement ADSs during the relevant period.
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(m) Representation
Dates; Certificate. On or prior to the date on which the Company first delivers a Placement Notice pursuant to this agreement (the “First Placement Notice Date”) and each time the Company:
(i) amends or
supplements the Registration Statement or the Prospectus relating to the Placement ADSs (other than a prospectus supplement filed in accordance with Section 7(l) of this Agreement) by means of a post-effective amendment, sticker or supplement but
not by means of incorporation of document(s) by reference into the Registration Statement or the Prospectus relating to the Placement ADSs;
(ii) files an
annual report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended financial information or a material amendment to the previously filed Form 20-F); or
(iii) files a
quarterly report on Form 6-K or a report on Form 6-K containing amended financial information under the Exchange Act (each date of filing of one or more of the documents referred to in clauses (i) through (iii) shall be a “Representation Date”),
the Company shall furnish the Agents (but in the case of clause (iii) above only if (1) a Placement Notice is pending or in effect and (2) the Agents
requests such certificate within three Business Days after the filing of such Form 6-K with the Commission) with a certificate, in the form attached hereto as Exhibit 7(m) (modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented), within two Trading Days of any Representation Date. The requirement to provide a certificate under this Section
7(m) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending or in effect, which waiver shall continue until the earlier to occur of (1) the date the Company delivers a Placement Notice hereunder (which
for such calendar quarter shall be considered a Representation Date) and (2) the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement ADSs following a Representation Date on which
the Company relied on the waiver referred to in the previous sentence and did not provide the Agents with a certificate under this Section 7(m), then before the Company delivers a Placement Notice or the Designated Agent sells any Placement ADSs
pursuant thereto, the Company shall provide the Agents with a certificate, in the form attached hereto as Exhibit 7(m), dated the date of such Placement Notice. Within two Trading Days of each
Representation Date, the Company shall have furnished to the Agents such further information, certificates and documents as the Agents may reasonably request.
(n) Legal
Opinions. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause to be furnished to the
Agents the written opinion and negative assurance letter of Gross & Co., Israeli counsel to the Company, and of Haynes and Boone, LLP, U.S. counsel to the Company, or such other Israeli or U.S. counsel satisfactory to the Agents (“Company Counsel”), in form and substance satisfactory to the Agents and their counsel, dated the date that the opinion and negative assurance letter are required to be delivered, modified, as necessary,
to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, that in lieu of such opinion and negative assurance
letter for subsequent Representation Dates, Company Counsel may furnish the Agents with a letter to the effect that the Agents may rely on a prior opinion or negative assurance letter delivered by such counsel under this Section 7(n) to the same
extent as if it were dated the date of such letter (except that statements in such prior opinion or negative assurance letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such
Representation Date).
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(o) Intellectual
Property Opinion. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause to be furnished to
the Agents the written opinion of Greenberg Traurig, LLP, counsel for the Company with respect to intellectual property matters, or such other intellectual property counsel satisfactory to the Agents (“Intellectual
Property Counsel”), in form and substance satisfactory to the Agents and their counsel, dated the date that the opinion letter is required to be delivered, modified, as necessary, to relate to the Registration Statement and the
Prospectus as then amended or supplemented; provided, however, that in lieu of such written opinion for subsequent Representation Dates, Intellectual Property
Counsel may furnish the Agents with a letter to the effect that the Agents may rely on a prior opinion letter delivered by such counsel under this Section 7(o) to the same extent as if it were dated the date of such opinion letter (except that
statements in such prior opinion letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation Date).
(p) Comfort
Letter. On or prior to the First Placement Notice Date and on any date which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable, the Company shall cause its independent registered
public accounting firm (and any other independent accountants whose report is included in the Registration Statement or the Prospectus) to furnish the Agents letters (the “Comfort Letters”), dated
the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(p); provided, that if requested by the Agents, the Company shall cause a Comfort Letter to be
furnished to the Agents within 10 Trading Days of the occurrence of any material transaction or event that necessitates the filing of additional, pro forma, amended or revised financial statements (including any restatement of previously issued
financial statements). Each Comfort Letter shall be in form and substance satisfactory to the Agents and each Comfort Letter from the Company’s independent registered public accounting firm shall (i) confirm that they are an independent
registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) state, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) update the Initial Comfort Letter with
any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such
letter.
(q) Market
Activities. The Company will not, directly or indirectly, and will cause its officers, directors and Subsidiary not to (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Ordinary Shares or ADSs or (ii) sell, bid for, or purchase Ordinary Shares or ADSs in violation of Regulation M, or pay anyone any
compensation for soliciting purchases of the Placement ADSs other than the Agent; provided, however, that the Company may bid for and purchase Ordinary Shares or
ADSs in accordance with Rule 10b-18 under the Exchange Act.
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(r) Insurance.
The Company and the Subsidiary shall maintain, or cause to be maintained, insurance in such amounts and covering such risks as is reasonable and customary for the business for which it is engaged.
(s) Compliance
with Laws. The Company and the Subsidiary shall maintain, or cause to be maintained, all material environmental certificates, authorizations or permits required by federal, state and local law in order to conduct their businesses as
described in the Prospectus (collectively, “Permits”), and the Company and the Subsidiary shall conduct their businesses, or cause their businesses to be conducted, in substantial compliance with
such Permits and with applicable Environmental Laws, except where the failure to maintain or be in compliance with such Permits could not reasonably be expected to result in a Material Adverse Effect.
(t) Investment
Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor the Subsidiary will be or become, at any time prior to the termination of this Agreement, an “investment company,” as such
term is defined in the Investment Company Act.
(u) Securities
Act and Exchange Act. The Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the Exchange Act as from time to time in force, so far as necessary to permit the sales of, or dealings
in, the Placement ADSs as contemplated by the provisions hereof and the Prospectus.
(v) No
Offer to Sell. Other than a free writing prospectus (as defined in Rule 405 under the Securities Act) approved in advance by the Company and the Agents, neither the Agents nor the Company (including its agents and representatives, other
than the Designated Agent in its capacity as agent) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an
offer to sell or solicitation of an offer to buy Placement ADSs hereunder.
(w) Blue
Sky and Other Qualifications. The Company will use its commercially reasonable efforts, in cooperation with the Agents, to qualify the Placement ADSs for offering and sale, or to obtain an exemption for the Placement ADSs to be offered and
sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agents may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the
Placement ADSs (but in no event for less than one year from the date of this Agreement); provided, however, that the Company shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Placement ADSs have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be, in
effect for so long as required for the distribution of the Placement ADSs (but in no event for less than one year from the date of this Agreement).
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(x) Sarbanes-Oxley
Act. The Company will maintain and keep accurate books and records reflecting its assets and maintain internal accounting controls in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with IFRS and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s financial statements in accordance with IFRS, (iii) that receipts
and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on its financial statements. The Company will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the
Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure and to ensure that material information relating to the Company is made known to it by others within the Company, particularly during the period in which such periodic reports are being prepared..
(y) Renewal
of Registration Statement. If, immediately prior to the third anniversary of the initial effective date of the Registration Statement (the “Renewal Date”), any of the Placement ADSs remain
unsold and this Agreement has not been terminated, the Company will, prior to the Renewal Date, file a new shelf registration statement or, if applicable, an automatic shelf registration statement relating to the ADSs that may be offered and sold
pursuant to this Agreement (which shall include a prospectus reflecting the number or amount of Placement ADSs that may be offered and sold pursuant to this Agreement), in a form satisfactory to the Agents and their counsel, and, if such
registration statement is not an automatic shelf registration statement, will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Date. The Company will take all other reasonable
actions necessary or appropriate to permit the public offer and sale of the Placement ADSs to continue as contemplated in the expired registration statement and this Agreement. From and after the effective date thereof, references herein to the
“Registration Statement” shall include such new shelf registration statement or such new automatic shelf registration statement, as the case may be.
(z) General
Instruction I.B.5. of Form F-3. If, from and after the date of this Agreement, the Company is no longer eligible to use Form F-3 (including pursuant to General Instruction I.B.5.) at the time it files with the Commission an annual report on
Form 20-F or any post-effective amendment to the Registration Statement, then it shall promptly notify the Agents and, within two Business Days after the date of filing of such annual report on Form 20-F or amendment to the Registration
Statement, the Company shall file a new prospectus supplement with the Commission reflecting the number of ADSs available to be offered and sold by the Company under this Agreement pursuant to General Instruction I.B.5. of Form F-3; provided, however, that the Company may delay the filing of any such prospectus supplement for up to 30 days if, in the reasonable judgment of the Company, it is in
the best interest of the Company to do so, provided that no Placement Notice is in effect or pending during such time. Until such time as the Company shall have corrected such misstatement or omission or effected such compliance, the Company
shall not notify the Agents to resume the offering of Placement ADSs.
(aa) Tax
Indemnity. The Company will indemnify and hold harmless the Agents against any documentary, stamp or similar issue tax, including any interest and penalties, on the issue and sale of the Placement ADSs.
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(bb) Depositary.
The Company has engaged and will maintain, at its sole expense, a depositary for its ADSs.
8. Conditions
to the Agents’ Obligations. The obligations of the Designated Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the
due performance by the Company of its obligations hereunder, to the completion by the Agents of a due diligence review satisfactory to the Agents in their reasonable judgment, and to the continuing satisfaction (or waiver by the Agents in their
sole discretion) of the following additional conditions:
(a) Registration
Statement Effective. The Registration Statement shall be effective and shall be available for all offers and sales of Placement ADSs (i) that have been issued pursuant to all prior Placement Notices and (ii) that will be issued pursuant to
any Placement Notice.
(b) Sales
Agreement Prospectus. The Company shall have filed with the Commission the Base Prospectus and the Sales Agreement Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second
Business Day following the date of effectiveness of the Registration Statement.
(c) No
Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company or the Subsidiary of any request for additional information from the Commission or any other federal, state or foreign
(including Israeli) governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii)
the issuance by the Commission or any other federal, state or foreign (including Israeli) governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt by the Company or the Subsidiary of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement ADSs for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made in the Registration Statement or the Prospectus or any material Incorporated Document untrue in any material respect or that requires the
making of any changes in the Registration Statement, the Prospectus or Incorporated Documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading and, in the case of the Prospectus, so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) No
Misstatement or Material Omission. The Agents shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agents’ opinion is
material, or omits to state a fact that in the Agents’ opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.
(e) Material
Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change, on a consolidated basis, in the authorized share capital of the
Company or any Material Adverse Effect or any development that could reasonably be expected to result in a Material Adverse Effect, or any downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset
backed securities), if any, by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company’s securities (other than asset backed securities), if any, the
effect of which, in the judgment of the Agents (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement ADSs on
the terms and in the manner contemplated in the Prospectus.
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(f) Company
Counsel Legal Opinions. The Agents shall have received the opinions and negative assurance letters, as applicable, of Company Counsel and Intellectual Property Counsel required to be delivered pursuant to Section 7(n) and Section 7(o), as
applicable, on or before the date on which such delivery of such opinions and negative assurance letters are required pursuant to Section 7(n) and Section 7(o), as applicable.
(g) Agents’
Counsel Legal Opinion. The Agents shall have received from Covington & Burling LLP, U.S. counsel for the Agents, such opinion or opinions, on or before the date on which the delivery of the Company Counsel legal opinion is required
pursuant to Section 7(n), with respect to such matters as the Agents may reasonably require, and the Company shall have furnished to such counsel such documents as they may request to enable them to pass upon such matters.
(h) Depositary’s
Counsel Legal Opinion. The Agents shall have received from Emmet, Marvin & Martin, LLP, counsel for the Depositary, an opinion, on or prior to the First Placement Notice Date, satisfactory in form and substance to the Agents and
counsel for the Agents.
(i) Comfort
Letter. The Agents shall have received the Comfort Letter required to be delivered pursuant to Section 7(p) on or before the date on which such delivery of such Comfort Letter is required pursuant to Section 7(p).
(j) Representation
Certificate. The Agents shall have received the certificate required to be delivered pursuant to Section 7(m) on or before the date on which delivery of such certificate is required pursuant to Section 7(m).
(k) Secretary’s
Certificate. On or prior to the First Placement Notice Date, the Agents shall have received a certificate, signed on behalf of the Company by the Secretary of the Company and attested to by an executive officer of the Company, dated as of
such date and in form and substance satisfactory to the Agents and their counsel, certifying as to (i) articles of association of the Company, as amended, (ii) the resolutions of the board of directors of the Company or duly authorized committee
thereof authorizing the execution, delivery and performance of this Agreement, the sale of the Placement ADSs and the issuance of the Underlying Shares and (iii) the incumbency of the officers of the Company duly authorized to execute this
Agreement and the other documents contemplated by this Agreement (including each of the officers set forth on Schedule 2).
(l) CFO
Certificate. On or prior to the First Placement Notice Date, the Agents shall have received a certificate, signed on behalf of the Company by the Chief Financial Officer of the Company, dated as of such date and in form and substance
satisfactory to the Agents and their counsel, with respect to certain financial data contained in the Registration Statement and the Prospectus, providing “management comfort” with respect to such information.
(m) Depositary
Certificate. On or prior to the First Placement Notice Date, the Depositary shall have furnished or caused to be furnished to the Agents a certificate satisfactory to the Agents of one of its authorized officers stating that the Deposit
Agreement has been duly executed and has not been terminated by the Depositary.
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(n) Deposit
Agreement. The Deposit Agreement shall be in full force and effect and the Company and the Depositary shall have taken all action necessary to permit the deposit of Underlying Shares and the issuance of the Placement ADSs in accordance with
the Deposit Agreement.
(o) No
Suspension. The ADSs shall be duly listed, and admitted and authorized for trading, subject to official notice of issuance, on the Nasdaq Global Market. Trading in the ADSs shall not have been suspended on, and the ADSs shall not have been
delisted from, the Nasdaq Global Market.
(p) Other
Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company shall have furnished to the Agents such appropriate further information, opinions, certificates, letters and other
documents as the Agents may have reasonably requested. All such information, opinions, certificates, letters and other documents shall have been in compliance with the provisions hereof. The Company shall have furnished the Agents with conformed
copies of such opinions, certificates, letters and other documents as the Agents may have reasonably requested.
(q) Securities
Act Filings Made. All filings with the Commission required by Rule 424(b) or Rule 433 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time
period prescribed for such filing by Rule 424(b) (without reliance on Rule 424(b)(8) of the Securities Act) or Rule 433, as applicable.
(r) Approval
for Listing. Either (i) the Placement ADSs shall have been approved for listing on the Nasdaq Global Market, subject only to notice of issuance, or (ii) the Company shall have filed an application for listing of the Placement ADSs on the
Nasdaq Global Market at, or prior to, the First Placement Notice Date and Nasdaq shall have reviewed such application and not provided any objections thereto.
(s) FINRA.
FINRA shall have raised no objection to the terms of the offering contemplated hereby and the amount of compensation allowable or payable to the Agents as described in the Prospectus.
(t) No
Termination Event. There shall not have occurred any event that would permit either Agent to terminate this Agreement pursuant to Section 11(a).
9. Indemnification
and Contribution.
(a) Company
Indemnification. The Company agrees to indemnify and hold harmless the Agents, their affiliates and their affiliates’ respective partners, members, directors, officers, employees and agents, and each person, if any, who (i) controls the
applicable Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the applicable Agent, in each case from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any and all amounts paid in settlement (in accordance with this Section 9), any action, suit,
investigation or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party (including any governmental or self-regulatory authority, or otherwise, or any claim asserted or
threatened), as and when incurred, to which the applicable Agent, or any such other person may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any
amendment or supplement to the Registration Statement or the Prospectus) or in any free writing prospectus or in any application or other document executed by or on behalf of the Company or based on written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify Ordinary Shares or ADSs under the securities laws thereof or filed with the Commission, (y) the omission or alleged omission to state in any such document a material fact required to be
stated therein or necessary to make the statements therein (solely with respect to the Prospectus, in light of the circumstances under which they were made) not misleading or (z) any breach by any of the indemnifying parties of any of their
respective representations, warranties or agreements contained in this Agreement; provided, however, that this indemnity agreement shall not apply to the extent
that such loss, claim, liability, expense or damage arises from the sale of the Placement ADSs pursuant to this Agreement and is caused, directly or indirectly, by an untrue statement or omission, or alleged untrue statement or omission, made in
reliance upon and in conformity with the Agents’ Information. This indemnity agreement will be in addition to any liability that the Company might otherwise have.
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(b) Agent
Indemnification. Each Agent, severally and not jointly, agrees to indemnify and hold harmless the Company and its directors and each officer of the Company that signed the Registration Statement, and each person, if any, who (i) controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company against any and all loss, liability, claim, damage and expense described in
the indemnity contained in Section 9(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with the Agents’ Information.
(c) Procedure.
Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or
parties under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i)
any liability that it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 9 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party
will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other
charges of more than one separate firm (plus local counsel) admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly after the indemnifying party receives a written invoice relating to such fees, disbursements and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for any settlement of any action or claim
effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 9 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party, in form and substance
reasonably satisfactory to such indemnified party, from all liability arising out of such claim, action or proceeding and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
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(d) Settlement
Without Consent if Failure to Reimburse. If an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel for which
it is entitled to be reimbursed under this Section 9, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 9(a) effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
(e) Contribution.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be
unavailable or insufficient from the Company or an Agent, the Company and such Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit, investigation or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than such Agent, such as persons who
control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and such Agent may be subject
in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and such Agent on the other hand. The relative benefits received by the Company on the one hand and such Agent on the other hand
shall be deemed to be in the same proportion as the total Net Proceeds from the sale of the Placement ADSs (before deducting expenses) received by the Company bear to the total compensation received by such Agent from the sale of Placement ADSs
on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and such Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or
damage, or action, suit, investigation or proceeding in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or such Agent, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company and the Agents agree that it would not be just and equitable if contributions pursuant to this Section 9(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action, suit, investigation or proceeding in respect thereof, referred to above in this Section 9(e) shall be deemed to include, for the purpose of this Section 9(e), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action, suit, investigation, proceeding or claim to the extent consistent with this Section 9. Notwithstanding the foregoing provisions of this Section
9(e), neither Agent shall be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(e), any person who controls a party to this Agreement within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, any affiliates of either Agent, any partners, members, directors, officers, employees and agents of either Agent and each person that is controlled by or under common control with either Agent will have the same
rights to contribution as that party, and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 9(e), will notify any such party or parties from whom contribution may be
sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9(e) except to the extent that the failure to so notify such other
party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c) hereof or pursuant to Section 9(d) hereof, no party
will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 9(c) hereof. The Agents’ respective obligations to contribute pursuant to this section are
several in proportion to the respective number of Placement ADSs they have sold hereunder, and not joint.
33
10. Representations
and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive,
as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agents, any controlling persons, or the Company (or any of their respective officers, directors, employees or controlling persons), (ii) delivery and
acceptance of the Placement ADSs and payment therefor or (iii) any termination of this Agreement.
11. Termination.
(a) Each
Agent, individually, shall have the right, by giving notice as hereinafter specified, at any time to terminate this Agreement with respect to itself if (i) any Material Adverse Effect, or any development that could reasonably be expected to
result in a Material Adverse Effect, has occurred that, in the judgment of such Agent, may materially impair the ability of the Agents to sell the Placement ADSs hereunder, (ii) the Company shall have failed, refused or been unable to perform any
agreement on its part to be performed hereunder; provided, however, in the case of any failure of the Company to deliver (or cause another person to deliver) any
certification, opinion or letter required under Section 7(m), Section 7(n), Section 7(o) or Section 7(p), the Agents’ right to terminate shall not arise unless such failure to deliver (or cause to be delivered) continues for more than 15 calendar
days from the date such delivery was required, (iii) any other condition of the Agents’ obligations hereunder is not fulfilled, (iv) any suspension or limitation of trading in the Placement ADSs or in securities generally on the Nasdaq Global
Market shall have occurred, (v) a general banking moratorium shall have been declared by any of United States federal or New York authorities, or (vi) there shall have occurred any outbreak or escalation of national or international hostilities
or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States or international political, financial or
economic conditions that, in the judgment of such Agent, may materially impair the ability of such Agent to sell the Placement ADSs hereunder or to enforce contracts for the sale of securities. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 16 and Section 19 hereof shall remain in full force and effect notwithstanding such termination. If either Agent elects to terminate this
Agreement as provided in this Section 11(a), such Agent shall provide the required notice as specified in Section 12.
34
(b) The
Company shall have the right, by giving 10 days’ prior notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party
to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 19 hereof shall remain in full force and effect notwithstanding such termination.
(c) Each
Agent, individually, shall have the right, by giving 10 days’ prior notice as hereinafter specified, to terminate this Agreement with respect to itself in such Agent’s sole discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 19 hereof shall remain in full force and effect notwithstanding such
termination.
(d) Unless
earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement ADSs through the Agents on the terms and subject to the conditions set forth herein; provided that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 19 hereof shall remain in full force and effect notwithstanding such termination.
(e) This
Agreement shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 11(f), Section 16 and Section 19 shall remain in full force and effect.
(f) Any termination of this Agreement pursuant to Section 11(a), 11(b), or 11(c) above shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agents or the Company, as the case may be. If such termination shall occur prior to the
Settlement Date for any sale of Placement ADSs, such Placement ADSs shall settle in accordance with the provisions of this Agreement. Upon termination of this Agreement, the Company shall not be required to pay to the Agents any discount or
commission with respect to any Placement ADSs not otherwise sold by the Agents under this Agreement; provided, however, that the Company shall remain obligated to
reimburse the Agents’ expenses pursuant to Section 7(g).
(g) Upon any termination by a single Agent pursuant to Section 11(a), 11(b), or 11(c), the Company shall file a Report on Form 6-K announcing the termination of this Agreement as to such
Agent, which Report on Form 6-K shall state that such Report on Form 6-K is incorporated by reference into the Registration Statement.
35
12. Notices.
All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified in this Agreement, and if sent to the Agent, shall be
delivered to:
SVB Leerink LLC
1301 Avenue of the Americas, 12th Floor
New York, New York 10019
Attention: Peter M. Fry
E-mail: peter.fry@svbleerink.com
Cantor Fitzgerald & Co.
499 Park Avenue
New York, NY 10022
Attention: Capital Markets
Facsimile: (212) 307-3730
with copies (which shall not constitute notice) to:
SVB Leerink LLC
1301 Avenue of the Americas, 12th Floor
New York, New York 10019
Attention: Stuart R. Nayman, Esq.
E-mail: stuart.nayman@svbleerink.com
Cantor Fitzgerald & Co.
499 Park Avenue
New York, NY 10022
Attention: General Counsel
Facsimile: (212) 829-4708
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
Attention: Matthew T. Gehl
E-mail: mgehl@cov.com
Gornitzky & Co
Zion Building, 45 Rothschild Blvd.
Tel Aviv, 6578403, Israel
Attention: Chaim Friedland and Ari Fried
E-mail: friedland@gornitzky.com; arif@gornitzky.com
36
and if to the Company, shall be delivered to:
RedHill Biopharma Ltd.
21 Ha’arba’a Street
Tel Aviv, Israel 6473921
Attention: Micha Ben Chorin
E-mail: micha@redhillbio.com
Fax: + 972-3-541-3144
with copies (which shall not constitute notice) to:
Haynes and Boone, LLP
30 Rockefeller Plaza
26th Floor
New York, New York 10112
Attention: Rick A. Werner
E-mail: rick.werner@haynesboone.com
Gross & Co.
One Azrieli Center
Round Building
Tel Aviv 6701101, Israel
Attention: Perry Wildes
E-mail: perry@gkh-law.com
Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such
purpose. Each such notice or other communication shall be deemed given (i) when delivered personally on or before 4:30 P.M., New York City time, on a Business Day, or, if such day is not a Business Day, on the next succeeding Business Day, (ii) by
Electronic Notice as set forth in the next paragraph, (iii) on the next Business Day after timely delivery to a nationally-recognized overnight courier or (iv) on the Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Nasdaq Global Market and commercial banks in the City of New
York are open for business.
An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this
Section 12 if sent to the electronic mail address specified by the receiving party in Section 12. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives actual acknowledgment of receipt from the person
whom the notice is sent, other than via auto-reply. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”),
which shall be sent to the requesting party within 10 days of receipt of the written request for Nonelectronic Notice.
37
13. Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agents and their respective successors and the affiliates, controlling persons, officers, directors and other persons referred to in Section
9 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of each such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto, the persons referred to in the preceding sentence and their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that either Agent may assign its rights
and obligations hereunder to an affiliate of such Agent without obtaining the Company’s consent, so long as such affiliate is a registered broker-dealer.
14. Adjustments
for Share Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any share split, share dividend or similar event effected with respect to the Ordinary
Shares.
15. Entire
Agreement; Amendment; Severability; Waiver. This Agreement (including all schedules (as amended pursuant to this Agreement) and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and
supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a
written instrument executed by the Company and the Agent; provided, however, that Schedule 2 of this Agreement may
be amended by either party from time to time by sending a notice containing a revised Schedule 2 to the other party in the manner provided in Section 12 and, upon such amendment, all references
herein to Schedule 2 shall automatically be deemed to refer to such amended Schedule 2. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is
valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such
provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement. No implied waiver by a party shall arise in the absence of a waiver in writing signed by such
party. No failure or delay in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right,
power, or privilege hereunder.
16. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
17. Waiver
of Immunity. With respect to any action, suit or proceeding arising out of or relating to or based upon this Agreement or any of the transactions contemplated hereby, the Company irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it would otherwise be entitled, and with respect to any such
action, suit or proceeding, waives any such immunity in any court of competent jurisdiction, and agrees not to raise or claim or cause to be pleaded any such immunity at or in respect of any such action, suit or proceeding, including, without
limitation, any immunity pursuant to the U.S. Foreign Sovereign Immunities Act of 1976, as amended.
38
18. Judgment
Currency; Payments. The obligation of the Company in respect of any sum due to the Agents under this Agreement shall, notwithstanding any judgment in a currency other than U.S. dollars (the “Judgment
Currency”), not be discharged until the first Business Day following receipt by the Agents of any sum adjudged to be so due in the Judgment Currency on which (and only to the extent that) the Agents may in accordance with normal
banking procedures purchase U.S. dollars with the Judgment Currency; if the U.S. dollars so purchased are less than the sum originally due to the Agents hereunder, the Company agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Agents against such loss in respect of any sum due to the Agents from the Company. If the U.S. dollars so purchased are greater than the sum originally due to the Agents hereunder, the Agents agree to pay to the Company
an amount equal to the excess of the U.S. dollars so purchased over the sum originally due to the Agents hereunder. All payments made or deemed to be made by the Company under this Agreement, if any, to the Agents, their respective affiliates,
and their affiliates’ respective partners, members, directors, officers, employees and agents or to any person controlling either Agent within the meaning of the Securities Act or the Exchange Act or that is controlled by or is under common
control with either Agent, will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature (other than taxes on net income or similar taxes) imposed or
levied by or on behalf of the State of Israel or any political subdivision or any taxing authority thereof or therein unless the Company is or becomes required by law to withhold or deduct such taxes, duties, assessments or other governmental
charges. In such event, the Company will pay such additional amounts as will result, after such withholding or deduction, in the receipt by the Agents, their respective affiliates, and their affiliates’ respective partners, members, directors,
officers, employees and agents or to any person controlling either Agent within the meaning of the Securities Act or the Exchange Act or that is controlled by or is under common control with either Agent, as the case may be, of the amounts that
would otherwise have been receivable in respect thereof.
19. Consent
to Jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection with any of the transactions contemplated hereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum, or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy (certified or registered mail, return receipt requested) to such party at the address in effect for notices under Section 12 of this Agreement and agrees that such service shall
constitute good and sufficient notice of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
20. Construction.
(a) The
section and exhibit headings herein are for convenience only and shall not affect the construction hereof.
39
(b) Words
defined in the singular shall have a comparable meaning when used in the plural, and vice versa.
(c) The words
“hereof,” “hereto,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(d) Wherever
the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation.”
(e) References
herein to any gender shall include each other gender.
(f) References
herein to any law, statute, ordinance, code, regulation, rule or other requirement of any governmental authority shall be deemed to refer to such law, statute, ordinance, code, regulation, rule or other requirement of any governmental authority
as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder.
21. Permitted
Free Writing Prospectuses. Each of the Company and the Agents represents, warrants and agrees that, unless it obtains the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed, it
has not made and will not make any offer relating to the Placement ADSs that would constitute an issuer free writing prospectus, or that would otherwise constitute a free writing prospectus (as defined in Rule 405), required to be filed with the
Commission. Any such free writing prospectus consented to by the Agents or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an issuer free writing prospectus, and that it has complied and will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.
22. Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the
Agents have been retained to act as sales agent in connection with the sale of the Placement ADSs, the Agents have acted at arms’ length and no fiduciary or advisory relationship between the Company or any of its respective affiliates,
shareholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agents, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Agents have advised or are advising the Company on other matters and the Agents have no duties or obligations to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth
herein;
(b) the
Company is capable of evaluating, and understanding and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) neither
the Agents nor their respective affiliates have provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and the Agents have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate;
40
(d) the
Company has been advised and is aware that the Agents and their respective affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Agents and their respective
affiliates have no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and
(e) the
Company waives, to the fullest extent permitted by law, any claims it may have against the Agents or their respective affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated by
this Agreement and agrees that the Agents and their respective affiliates shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or
in right of the Company, including shareholders (or other equity holders), creditors or employees of the Company.
23. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made
by facsimile or electronic transmission. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic
Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
24. Use of
Information. The Agents may not provide any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to any third party other than their legal counsel advising it on
this Agreement and the transactions contemplated by this Agreement unless expressly approved by the Company in writing.
25. Agents’ Information. As used in this Agreement, “Agents’ Information” means solely the following information in the Registration
Statement and the Prospectus: the last sentence of the seventh paragraph under the heading “Plan of Distribution” in the Sales Agreement Prospectus.
All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant to EDGAR. All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or
the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the
case may be.
All references in this Agreement to “supplements” to the Prospectus shall include any supplements, “wrappers” or similar materials
prepared in connection with any offering, sale or private placement of any Placement ADSs by the Agents outside of the United States.
[Remainder of Page Intentionally Blank]
41
If the foregoing correctly sets forth the understanding between the Company and the Agents, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Agents.
|
|
Very truly yours,
REDHILL BIOPHARMA LTD.
By: /s/ Dror Ben-Asher
Name: Dror Ben-Asher
Title: Chief Executive Officer
ACCEPTED as of the date
first-above written:
SVB LEERINK LLC
By: /s/ Peter M. Fry
Name: Peter M. Fry
Title: Head of Alt Equities
CANTOR FITZGERALD & CO.
By: /s/ Sage Kelly
Name: Sage Kelly
Title: Global Head of Investment Banking
|
[Signature Page to Sales Agreement]
Exhibit A
None.
SCHEDULE 1
FORM OF PLACEMENT NOTICE
From: [
]
[TITLE]
RedHill Biopharma Ltd.
Cc: [
]
To: [Designated
Agent]
Subject: [Designated
Agent]—At the Market Offering—Placement Notice
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Sales Agreement, dated July 29, 2021 (the “Agreement”), by and among RedHill Biopharma Ltd., a
company limited by shares organized under the laws of the State of Israel (the “Company”), SVB Leerink LLC and Cantor Fitzgerald & Co., I hereby request on behalf of the Company that [Designated
Agent] sell up to [ ] American Depositary Shares, each representing ten ordinary shares, par value NIS 0.01 per share, of the Company (the “ADSs”), at a minimum market price of $ per ADS[; provided that no more than [ ] ADSs shall be sold in any one Trading Day (as such term is defined in Section 3 of the Agreement)]. Sales should begin [on the date of this Placement Notice] and end on [DATE]
[until all ADSs that are the subject of this Placement Notice are sold](the “Placement Period”).
SCHEDULE 3
Compensation
The Company shall pay the Designated Agent compensation in cash up to 3% of the gross proceeds from the sales of Placement ADSs pursuant to the terms of the Sales Agreement
of which this Schedule 3 forms a part.
Exhibit 7(m)
OFFICERS’ CERTIFICATE
Each of Dror Ben-Asher, the duly qualified and elected Chief Executive Officer of RedHill Biopharma Ltd., a company limited by shares organized under the laws of the State of Israel (the “Company”), and Micha Ben Chorin, the duly qualified and elected Chief Financial Officer of the Company, does hereby certify in his respective capacity and on behalf of the Company, pursuant to Section 7(m) of the Sales
Agreement, dated July 29, 2021 (the “Sales Agreement”), by and among the Company, SVB Leerink LLC and Cantor Fitzgerald & Co., that, after due inquiry, to the best of the knowledge of the
undersigned:
(i) The
representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse
Effect, are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, and (B) to the extent such representations and warranties are not subject to any qualifications or
exceptions relating to materiality or Material Adverse Effect, are true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect as if expressly made on and as of the date
hereof.
(ii) The
Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Sales Agreement at or prior to the date hereof.
(iii) As of
the date hereof, (A) the Registration Statement complies in all material respects with the requirements of the Securities Act and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, (B) the Prospectus complies in all material respects with the requirements of the Securities Act does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (C) no event has occurred as a result of which it is necessary
to amend or supplement the Registration Statement or the Prospectus in order to make the statements therein not untrue or misleading or for clauses (A) and (B) above, to be true and correct.
(iv) There
has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition (financial or otherwise), earnings, results of operations, business, properties, operations,
assets, liabilities or prospects of the Company and the Subsidiary, taken as a whole, whether or not arising from transactions in the ordinary course of business, since the date as of which information is given in the Prospectus, as amended or
supplemented to the date hereof.
(v) The
Company does not possess any material non-public information.
(vi) The
maximum amount of Placement ADSs that may be sold pursuant to the Sales Agreement has been duly authorized by the Company’s board of directors or a duly authorized committee thereof pursuant to a resolution or unanimous written consent in
accordance with the Company’s Articles of Association, as amended, and applicable law.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Sales Agreement.
IN WITNESS WHEREOF, each of the undersigned, in such individual’s respective capacity as Chief Executive Officer or Chief Financial
Officer of the Company, has executed this Officers’ Certificate on behalf of the Company.
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|
By:
Name: Dror Ben-Asher
Title: Chief Executive Officer
Date:
By:
Name: Micha Ben Chorin
Title: Chief Financial Officer
Date:
|
Exhibit 5.1
Tel Aviv, July 29, 2021
RedHill Biopharma Ltd.
21 Ha'arba'a Street
Tel Aviv, 6473921
Israel
Re: RedHill Biopharma Ltd.
Ladies and Gentlemen:
We have acted as Israeli counsel for RedHill Biopharma Ltd., an Israeli company organized under the laws of the State of Israel (the “Company”), in connection with the registration
statement on Form F-3 (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) on or about July 29, 2021 under the Securities Act of 1933, as amended (the “Act”). The Registration
Statement relates to the proposed offer and sale by the Company from time to time, as set forth in the prospectus contained in the Registration Statement (the “Prospectus”) and as shall be set forth in one or more supplements to the
Prospectus (each, a “Prospectus Supplement”), of up to a $200,000,000 aggregate amount of any of all the following securities (the “Securities”): (i) American Depositary Shares ("ADSs") representing ordinary shares, par value
NIS 0.01 per share, of the Company (“Ordinary Shares”), (ii) Ordinary Shares, (iii) warrants to purchase Ordinary Shares and/or ADSs ("Warrants"), (iv) subscription rights ("Subscription Rights") to purchase Ordinary Shares
and/or ADSs and/or (v) units comprised of one or more of the securities that are offered under the Prospectus ("Units").
The Warrants will be issued under a warrant agreement (the “Warrant Agreement”) between the Company and a warrant agent (the “Warrant Agent”). The Subscription
Rights will be issued under a subscription rights agreement (the “Subscription Rights Agreement”) between the Company and a rights agent (the “Rights Agent”). The Units will be issued under a unit agreement (the “Unit Agreement”)
between the Company and a unit agent (the “Unit Agent”).
We have also acted as counsel to the Company in connection with the Sales Agreement, dated as of July 29, 2021 (the “Sales Agreement”), by and
among the Company, SVB Leerink LLC (the “SVB Leerink”), and Cantor Fitzgerald & Co. (and collectively, with SVB Leerink, the “Agents”) pursuant to
which the Company has agreed to offer and sell ADSs having an aggregate offering price of up to $100 million (the “ATM Shares”). The ATM Shares will be issued pursuant to the Registration Statement
and the related prospectus contained therein covering the ATM Shares.
In connection herewith, we have examined originals or copies, satisfactory to us, of the Company's Amended and Restated Articles of Association and resolutions of the board of
directors, and we have examined and relied without investigation as to matters of fact upon the Registration Statement and the exhibits thereto, and such certificates, statements and results of inquiries of public officials and officers and
representatives of the Company and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, corporate records, certificates and instruments as we have deemed necessary or appropriate to enable us to render
the opinions expressed herein. We have assumed the genuineness of all signatures on all documents examined by us, the legal competence and capacity of natural persons, the authenticity of documents submitted to us as originals, and the conformity
with authentic original documents of all documents submitted to us as copies.
We also have assumed that: (1) at the time of execution, issuance and delivery of any Warrants, the related Warrant Agreement will be the valid and legally binding obligation of
the Warrant Agent, enforceable against such party in accordance with its terms; (2) at the time of execution, issuance and delivery of any Subscription Rights, the related Subscription Rights Agreement will be the valid and legally binding obligation
of the Rights Agent, enforceable against such party in accordance with its terms; and (3) at the time of the execution, issuance and delivery of the Units, the related Unit Agreement will be the valid and legally binding obligation of the Unit Agent,
enforceable against such party in accordance with its terms.
We have assumed further that: (1) at the time of execution, issuance and delivery of any Warrants, the related Warrant Agreement will have been duly authorized, executed and
delivered by the Company and the Warrant Agent; (2) at the time of execution, issuance and delivery of any Subscription Rights, the related Subscription Rights Agreement will have been duly authorized, executed and delivered by the Company and the
Rights Agent; (3) at the time of execution, issuance and delivery of the Units, the Unit Agreement will have been duly authorized, executed and delivered by the Company and the Unit Agent; and (4) at the time of the issuance and sale of any of the
Securities, the terms of the Securities, and their issuance and sale, will have been established so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company.
For the purpose of the opinions expressed below, we have assumed further that after the issuance of the ADSs or the Ordinary Shares pursuant to the Registration Statement, the
total number of issued Ordinary Shares, together with the total number of Ordinary Shares reserved for issuance upon the exercise, exchange or conversion, as the case may be, of any exercisable, exchangeable or convertible security then outstanding,
will not exceed the total number of authorized share capital under the Company's Amended and Restated Articles of Association.
Based upon the foregoing, in reliance thereon and subject to the assumptions, comments, qualifications, limitations and exceptions stated herein and the effectiveness of the
Registration Statement under the Act, we are of the opinion that:
| 1. |
With respect to the Ordinary Shares underlying ADSs and the Ordinary Shares, assuming the taking of all necessary corporate action to authorize and approve the issuance of any ADSs and/or Ordinary Shares, as the case may be, the terms of
the offering thereof and related matters, upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the board of directors and otherwise in accordance with the
provisions of the applicable convertible Securities, if any, such Ordinary Shares will be validly issued, fully paid and non-assessable.
|
2
| 2. |
With respect to the Warrants, assuming the (a) taking of all necessary corporate action to authorize and approve the issuance of the underlying ADS's and the issuance and terms of any Warrants, the related Warrant Agreement, the terms of
the offering thereof and related matters and (b) due execution, authentication, issuance and delivery of such Warrants upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar
agreement approved by the board of directors and otherwise in accordance with the provisions of the applicable Warrant Agreement, such Warrants will constitute valid and legally binding obligations of the Company to the extent governed by
Israeli law.
|
| 3. |
With respect to the Subscription Rights, assuming the (a) taking of all necessary corporate action to authorize and approve the issuance and terms of any Subscription Rights, the related Subscription Rights Agreement and the Ordinary
Shares and/ADSs underlying the Subscription Rights, the terms of the offering thereof and related matters and (b) due execution, countersignature (where applicable), authentication, issuance and delivery of such Subscription Rights upon
payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the board of directors and otherwise in accordance with the provisions of the applicable Subscription
Rights Agreement, such Subscription Rights will constitute valid and legally binding obligations of the Company to the extent governed by Israeli law.
|
| 4. |
With respect to the Units, assuming the (a) taking of all necessary corporate action to authorize and approve the issuance and the terms of the Units, the related Unit Agreement and any Securities which are components of the Units, the
terms of the offering thereof and related matters and (b) due execution, countersignature (where applicable), authentication, issuance and delivery of the Units and the Securities that are components of such Units in each case upon the
payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the board of directors, and otherwise in accordance with the provisions of the applicable (i) Warrant
Agreement, in the case of Warrants and (ii) Subscription Rights Agreement, in case of Subscription Rights, such Units will be validly issued and will entitle the holders thereof to the rights specified in the Unit Agreements to the extent
governed by Israeli law.
|
| 5. |
With respect to the ATM Shares, assuming that (a) prior to the issuance of any of ATM Shares under the Sales Agreement by any and all of the Agents, the price, number of ATM Shares and certain other terms of issuance with respect to any
specific placement notice delivered under the Sales Agreement will be authorized and approved by the board of directors or a pricing committee of the board of directors in accordance with Israeli law and (B) all corporate proceedings
necessary for the authorization, issuance and delivery of the ATM Shares shall have been taken, upon issuance pursuant to the terms of the Sales Agreement and in accordance with resolutions of the board of directors related to the offering of
the ATM Shares, the ATM Shares will be validly issued, fully paid and non-assessable.
|
3
| a) |
In addition to the assumptions, comments, qualifications, limitations and exceptions set forth above, the opinions set forth herein are further limited by, subject to and based upon the following assumptions, comments, qualifications,
limitations and exceptions:We are members of the Israel Bar, and we express no opinion as to any matter relating to the laws of any jurisdiction other than the laws of the State of Israel and have not, for the purpose of giving this opinion,
made any investigation of the laws of any other jurisdiction than the State of Israel. The opinions set forth herein are made as of the date hereof and are subject to, and may be limited by, future changes in the factual matters set forth
herein, and we undertake no duty to advise you of the same. The opinions expressed herein are based upon the law in effect (and published or otherwise generally available) on the date hereof, and we assume no obligation to revise or
supplement these opinions should such law be changed by legislative action, judicial decision or otherwise. In rendering our opinions, we have not considered, and hereby disclaim any opinion as to, the application or impact of any laws,
cases, decisions, rules or regulations of any other jurisdiction, court or administrative agency. This opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other
matters.
|
| b) |
Our opinions herein are subject to and may be limited by (i) applicable bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting or relating to the rights and remedies of creditors generally
including, without limitation, laws relative to fraudulent conveyances, preference and equitable subordination, (ii) general principles or equity (regardless of whether considered in a proceeding in equity or at law), (iii) an implied
covenant of good faith and fair dealing, (iv) requirements that a claim with respect to any Securities denominated other than in United States dollars (or a judgment denominated other than in United States dollars with respect to such a
claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, and (v) governmental authority to limit, delay or prohibit the making of payments outside the United States or in
foreign currency or composite currency.
|
| c) |
Our opinions are further subject to the effect of generally applicable rules of law arising from statutes, judicial and administrative decisions, and the rules and regulations of governmental authorities that: (i) limit or affect the
enforcement of provisions of a contract that purport to require waiver of the obligations of good faith, fair dealing, diligence and reasonableness; (ii) limit the availability of a remedy under certain circumstances where another remedy has
been elected; (iii) limit the enforceability of provisions releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, to the extent the action or inaction involves
negligence, recklessness, willful misconduct or unlawful conduct; (iv) may, where less than all of the contract may be unenforceable, limit the enforceability of the balance of the contract to circumstances in which the unenforceable portion
is not an essential part of the agreed exchange and (v) govern and afford judicial discretion regarding the determination of damages and entitlement to attorneys' fees.
|
4
| d) |
We express no opinion as to the enforceability of any provision in any Warrant Agreement, Subscription Rights Agreement, Unit Agreement or other agreement purporting or attempting to (A) confer exclusive jurisdiction and/or venue upon
certain courts or otherwise waive the defenses of forum non conveniens or improper venue, (B) confer subject matter jurisdiction on a court not having independent grounds therefor, (C) modify or waive the requirements for effective service of
process for any action that may be brought, (D) waive the right of the Company or any other person to a trial by jury, (E) provide that remedies are cumulative or that decisions by a party are conclusive, or (F) modify or waive the rights to
notice, legal defenses, statutes of limitations or other benefits that cannot be waived under applicable law.
|
| e) |
We express no opinion as to the enforceability of any rights to indemnification or contribution provided for in any Warrant Agreement, Subscription Rights Agreement, Unit Agreement or other agreement which are violative of public policy
underlying any law, rule or regulation (including any federal or state securities law, rule or regulation) or the legality of such rights.
|
| f) |
You have informed us that you intend to issue the Securities from time to time on a delayed or continuous basis, and this opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof. We understand
that prior to issuing any Securities you will afford us an opportunity to review the corporate approvals and operative documents pursuant to which such Securities are to be issued (including the applicable Prospectus Supplement) and will file
such supplement or amendment to this opinion (if any) as we may reasonably consider necessary or appropriate by reason of the terms of such Securities.
|
| g) |
With respect to our opinion as to the ADSs and Ordinary Shares, including any ADSs and Ordinary Shares issued upon exercise or conversion of any Securities and the ATM Shares, we have assumed that, at the time of issuance and sale and to
the extent any such issuance would exceed the maximum share capital of the Company currently authorized, the number of Ordinary Shares that the Company is authorized to issue shall have been increased in accordance with the Company’s Articles
of Association and as described in the Registration Statement such that a sufficient number of Ordinary Shares are authorized and available for issuance under the Articles of Association.
|
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus. We also
consent to your filing copies of this opinion as an exhibit to the Registration Statement with agencies of such states as you deem necessary in the course of complying with the laws of such states regarding the offering and sale of the Securities. In
giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.
|
|
Very truly yours,
/s/ Gross & Co.
|
5
Exhibit 5.2
HAYNES AND BOONE, LLP
July 29, 2021
RedHill Biopharma Ltd.
21 Ha'arba'a Street
Tel Aviv, 64739
Israel
Ladies and Gentlemen:
We have acted as special U.S. counsel to RedHill Biopharma Ltd., a company limited by shares organized under the laws of the State of
Israel (the “Company”), in connection with the sale of the Company’s American Depositary Shares (the “ADSs”), each ADS representing ten (10) ordinary shares of the Company, NIS 0.01 par value per share (the “Ordinary Shares”), having an aggregate
offering price of up to $100,000,000.00, pursuant to registration statement on Form F-3 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”), on July 29, 2021. This opinion is being rendered in connection with the offering and sale by the Company of the ADSs pursuant to the terms of a sales agreement, dated July 29, 2021 (the “Sales Agreement”), by and among the
Company, SVB Leerink LLC and Cantor Fitzgerald & Co. (collectively, the “Agent”). The ADSs will be issued pursuant to a Deposit Agreement, dated as of December 26, 2012 (the “Deposit Agreement”) among the Company, The Bank of New York
Mellon, as depositary (the “Depositary”), and all Owners and Holders (each as defined therein) from time to time of ADSs of the Company issued thereunder.
In connection with this opinion, we have examined such corporate records, documents, instruments, certificates of public officials and of the Company and such questions of law as we have deemed necessary for the purpose
of rendering the opinions set forth herein.
In such examination, we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies.
Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that, when the ADSs are issued in accordance with the Deposit Agreement against the deposit of duly
authorized, validly issued, fully paid and non-assessable Ordinary Shares, such ADSs will be duly and validly issued under the Deposit Agreement and will entitle the holders thereof to the rights specified therein.
Please note that we are opining only as to the matters expressly set forth herein, that no opinion should be inferred as to any other matter. We are opining herein as to the laws of the State of New York as in effect on
the date hereof, and we express no opinion with respect to any other laws, rules or regulations. This opinion is based upon currently existing laws, rules, regulations and judicial decisions, and we disclaim any obligation to advise you of any change
in any of these sources of law or subsequent legal or factual developments which might affect any matters or opinions set forth herein. In rendering the foregoing opinions, we have relied, for matters involving Israeli law, solely on the opinion of
GKH & Co., Israeli counsel to the Company.
This opinion is being rendered solely in connection with the registration of the offering and the sale of the ADSs, pursuant to the registration requirements of the Securities Act.
We hereby consent to the use of this opinion as Exhibit 5.2 to the Registration Statement, and to the reference to us under the caption “Legal Matters” in the prospectus included in the Registration Statement. In giving
such consent, we do not hereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations of the Commission thereunder. This opinion is given as of the date
hereof and we assume no obligation to update or supplement such opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes that may hereafter occur.
Very truly yours,
/s/ Haynes and Boone, LLP
Haynes and Boone, LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form F-3 of RedHill Biopharma Ltd. of our report dated March 17, 2021 relating to the financial statements and
the effectiveness of internal control over financial reporting, which appears in RedHill Biopharma Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2020. We also consent to the reference to us under the heading “Experts” in such
Registration Statement.
/s/ Kesselman & Kesselman
Certified Public Accountants (Isr.)
A member firm of PricewaterhouseCoopers International Limited
Tel-Aviv, Israel
July 29, 2021
Kesselman & Kesselman, Derech Menachem Begin 146 Tel Aviv-Yafo 6492103 Israel,
P.O Box 7187 Tel-Aviv 6107120 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il