Financial Performance - For the year ended December 31, 2018, the company reported a total comprehensive income of $2,986 thousand, a significant improvement compared to a loss of $897 thousand in 2017[23]. - Basic and diluted earnings per share from continuing operations were $0.006 in 2018, compared to a loss of $0.002 in 2017, showing a positive shift in profitability[23]. - The accumulated deficit as of December 31, 2018, was approximately $152,588 thousand, highlighting ongoing financial challenges[32]. - The company reported a net cash used in operating activities of $816 thousand for the year ended December 31, 2018, indicating a need for significant additional financing[89]. - The company’s financial results and commercial prospects may be materially impaired if clinical trials do not meet required criteria or if additional trials are needed[46]. Assets and Liquidity - The company's cash, cash equivalents, and short-term bank deposits stood at $5,275 thousand as of December 31, 2018, down from $5,796 thousand in 2017[25]. - Total assets increased to $8,575 thousand in 2018, up from $6,586 thousand in 2017, reflecting growth in the company's financial position[25]. - The company had a working capital of $7,942 thousand as of December 31, 2018, compared to $5,906 thousand in 2017, indicating improved liquidity[25]. Research and Development - Research and development expenses decreased to $38 thousand in 2018 from $443 thousand in 2016, indicating a reduction in operational costs[23]. - The company plans to initiate and manage pre-clinical development and clinical trials for current and new product candidates, indicating a focus on expanding its product pipeline[34]. - The company is focused on the development of hCDR1 for the treatment of systemic lupus erythematosus (SLE) and Sjogren's syndrome (SS)[135]. - hCDR1 is a Phase II-ready asset, with over 400 patients involved in previous trials demonstrating a favorable safety profile[137]. - The company plans to initiate a new advanced clinical trial for hCDR1, focusing on the 0.5 mg weekly dose based on positive findings from previous trials[137]. Regulatory and Market Risks - The company faces risks related to the costs and timing of obtaining regulatory approvals for its product candidates, including hCDR1, which is pending approval[42]. - The company must demonstrate proof of safety and efficacy in humans to obtain FDA approval, which requires substantial resources and time[42]. - The company anticipates that market acceptance of its products will depend on perceptions of safety and efficacy by healthcare providers[56]. - The company may face significant costs related to patent claims and the expiration of the hCDR1 patent in 2024, which could impact its competitive position[36]. - The FDA's approval process for new drugs is lengthy and uncertain, requiring extensive pre-clinical and clinical data[197]. Competition and Market Landscape - The company faces competition from pharmaceutical and biotechnology companies with greater capital resources and experience, which may hinder its ability to develop and market its products effectively[66]. - Only one drug, GlaxoSmithKline's Benlysta, has been approved for SLE in the last 50 years, highlighting the competitive challenges faced by the company[182]. - The pipeline for SLE treatments includes multiple candidates, with two late-stage drugs failing Phase 3 trials in the past eighteen months[183]. - For pSS, no specific drug has been approved, with treatments primarily focused on symptomatic relief[184]. Capital and Financing - The company is seeking additional capital through private and public equity offerings, debt financings, and strategic partnerships, which may dilute existing shareholders[36]. - Future capital requirements will depend on various factors, including the success of clinical trials and the ability to secure additional financing[35]. - The company plans to outsource production for its drug candidates, relying on contract manufacturers for clinical supply needs[190]. - The company does not have manufacturing capabilities and does not intend to establish any[188]. Corporate Governance and Compliance - The company is permitted to follow certain home country corporate governance practices, which may provide less protection to investors compared to U.S. domestic issuers[101]. - If the company fails to maintain compliance with Nasdaq's continued listing standards, it may face delisting, which could adversely affect the liquidity and market price of its ADSs[111]. - The concentration of ownership among principal stockholders, holding approximately 31.88% of outstanding ordinary shares, may limit the influence of new investors on corporate decisions[96]. Intellectual Property - The company is responsible for a total patent expense reimbursement of $382,989 to Yeda, with various installments already issued[175]. - The license agreement with Yeda includes milestone payments of up to $2.2 million, with specific payments tied to clinical trial phases and FDA approvals[176]. - The company may face challenges in protecting its intellectual property, which could adversely affect its competitive position[80]. Operational Challenges - The company has limited experience in conducting clinical trials, which may delay or prevent regulatory approvals and commercialization of its products[42]. - The company relies on third parties for clinical trials and manufacturing, and any failure by these parties could adversely affect product development and commercialization[49][60]. - The company intends to expand its product liability insurance coverage but faces increasing costs and potential inadequacy of coverage[74]. - The company’s Chief Financial Officer dedicates approximately 6 hours a week to operations, which may impact timely completion of financial statements[68]. Economic and Political Risks - The company is exposed to risks from political, economic, and military conditions in Israel, which may adversely affect operations and results[114]. - Economic boycotts and restrictive laws against Israeli companies may adversely impact the company's operating results and financial condition[117]. - The company is exposed to inflation and foreign currency fluctuations, particularly with expenses in New Israeli Shekels (NIS) while holding cash in U.S. dollars[118].