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To date, we have successfully developed two commercial products, both of which are enzyme replacement therapies (ERTs): Elelyso® (taliglucerase alfa) for the treatment of adult patients and children four years of age and older with Gaucher disease and Elfabrio® (pegunigalsidase alfa) for the treatment of adult patients with a confirmed diagnosis of Fabry disease.

Elelyso, our first commercial product, is our proprietary recombinant form of glucocerebrosidase (GCD), an enzyme naturally found in human cells that is mutated or deficient in patients with Gaucher disease. Elelyso was approved by the FDA in 2012 for injection as an ERT for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. Elelyso is the first plant cell derived recombinant protein to be approved by the FDA for the treatment of Gaucher disease and is now approved in more than 40 markets including the United States, Brazil, Israel and others. It is not approved in the European Union (EU). In August 2014, the FDA approved Elelyso for injection for children four years of age and greater. We have licensed the rights to commercialize Elelyso worldwide (other than Brazil) to Pfizer pursuant to the terms of an amended and restated exclusive license and supply agreement, or the Amended Pfizer Agreement, which is in effect until 2030. We sell drug substance to Pfizer for the production of Elelyso, subject to certain terms and conditions, and Pfizer retains the revenues generated from its sales of the product. In Brazil, we have licensed rights to commercialize Elelyso to Fiocruz. Elelyso is marketed as BioManguinhos alfataliglicerase in Brazil. We retain distribution rights to Elelyso in Brazil. See Commercialization of Approved Products--Elelyso – Pfizer and --Alfataliglicerase – Fundação Oswaldo Cruz (Fiocruz).

Our sales of Elelyso to Pfizer and Fiocruz are made at a fixed price directly to Pfizer and Fiocruz who maintain product in inventory, and we recognize revenue from those sales upon delivery. The timing of such sales do not directly reflect patient demand and, on a period-to-period basis, there may be variations in the orders placed by each of Pfizer and Fiocruz resulting in variability in our period-to-period results. There may be periods during which no orders are placed by either Pfizer or Fiocruz, whether as a result of inventory de-stocking or other factors. We do not anticipate that these ordering patterns will change until the demand characteristics for Elelyso stabilize, the launch of Elelyso matures and Elelyso’s share of the market for Fabry disease treatment increases globally.

Elfabrio, our second commercial product, for the treatment of adult patients with Fabry disease, is our proprietary, chemically modified, stabilized plant cell culture expressed recombinant α-Galactosidase-A protein, a lysosomal enzyme. It was approved by the European Commission, or the EC, for marketing in the EU and by the FDA for marketing in the United States in May 2023 for adult patients with Fabry disease, and subsequently in more than 10 additional markets. These approvals cover the 1 mg/kg every-two-weeks (E2W) dosage.

On March 5, 2026, the EC ratified the positive opinion issued in January 2026 by the Committee for Medicinal Products for Human Use, or the CHMP, of the European Medicines Agency, or the EMA. The EC decision approves, in the EU, the 2 mg/kg E4W dosing regimen for pegunigalsidase alfa (Elfabrio) in Fabry disease adult patients stable with an ERT treatment.

We have partnered with Chiesi for the development and commercialization of Elfabrio for the treatment of Fabry disease through two exclusive global licensing and supply agreements; the Exclusive License and Supply Agreement dated as of October 17, 2017, by and between Protalix Ltd. and Chiesi, or the Chiesi Ex-US Agreement, and the Exclusive License and Supply Agreement dated as of July 23, 2018, by and between Protalix Ltd. and Chiesi, or the Chiesi US Agreement. The Chiesi Ex-US Agreement and the Chiesi US Agreement are referred to herein collectively as the Chiesi Agreements. Under these two agreements, we have received certain upfront payments and development cost reimbursements, and remain entitled to potential milestone payments and payments for drug product purchased by Chiesi from Protalix Ltd. See Commercialization of Approved Products--Elfabrio (pegunigalsidase alfa/PRX-102) – Chiesi Farmaceutici.

Under the terms of the Chiesi Agreements, Chiesi is solely responsible for the global commercialization and medical programs of Elfabrio, including patient acquisition and retention, and distribution of Elfabrio to patients. We manufacture Elfabrio drug substance and, after the fill\finish process is complete, we sell the resulting drug product to Chiesi. Operationally, Chiesi conducts its own internal commercial forecasting to guide inventory needs. To date, Chiesi has placed bulk orders for Elfabrio. As a result, the orders we receive from Chiesi may not be timed precisely to Chiesi’s pace of patient acquisition and retention. Accordingly, our sales of Elfabrio to Chiesi may not reflect patient demand for Elfabrio as we sell the fulfilled orders to Chiesi’s inventory. In addition, on a period-to-period basis, there may be variations in the orders placed by Chiesi resulting in variability in our period-to-period results as we, in turn, recognize revenues from sales of Elfabrio upon delivery of the drug product to Chiesi. There may be periods during which no orders are placed by Chiesi, whether as a result of inventory de-stocking or other factors. We do not anticipate that these Chiesi ordering patterns will change until the demand characteristics for Elfabrio stabilize, the launch of Elfabrio matures and Elfabrio’s share of the market for Fabry disease treatment increases globally.

2025 and Recent Company Developments

2025 Developments

●On June 30, 2025, we announced that we had been added to the Russell 3000® and Russell 2000® Indexes, effective as of the U.S. market close on June 27, 2025, as part of the 2025 Russell indexes annual reconstitution.

●On August 24, 2025, Gilad Mamlok succeeded Eyal Rubin as our Senior Vice President and Chief Financial Officer.

●On October 6, 2025, we submitted an Investigational New Drug (IND) application to the FDA in connection with our planned RELEASE Phase 2 clinical trial of PRX-115 which became effective following the FDA’s standard 30-day review period.

●On March 5, 2026, the EC ratified the CHMP positive opinion issued in January 2026. The EC decision approves, in the EU, the 2 mg/kg E4W dosing regimen for pegunigalsidase alfa in Fabry disease adult patients stable with an ERT treatment. The CHMP’s positive opinion is the result of an appeal submitted after the CHMP issued a negative opinion in October 2025.

Product Pipeline

Our proprietary ProCellEx platform is being used to manufacture both our approved and marketed products as well as PRX-115 and PRX-119.

We are committed to leveraging our track record of success as we progress with the development of treatments for rare and orphan diseases. In addition, we continuously work on the further development and enhancement of our ProCellEx technology. Accordingly, we are turning our focus to new, early-stage product candidates that treat indications for which there are high unmet needs in terms of efficacy and safety, including renal diseases. We believe that our treatments of interest will address both genetic and non-genetic diseases. We currently intend to use our ProCellEx platform and PEGylation/chemical capabilities, as well as other modalities such as small molecules and antibodies, to take advantage of highly innovative opportunities. We are also exploring novel platform technologies to expand our pipeline.

ProCellEx: Our Proprietary Protein Expression System

ProCellEx is our proprietary platform used to produce and manufacture recombinant proteins through plant cell-based expression in suspension. We are the first and only company to receive FDA approval of a complex human protein produced through plant cell-based expression, and with the approval of Elfabrio, we now produce two commercial proteins through our platform.

ProCellEx consists of a comprehensive set of proprietary technologies and capabilities, including the use of advanced genetic engineering and plant cell culture technology, enabling us to produce complex, proprietary proteins for a variety of human diseases. Our protein expression system facilitates the creation and selection of high-expressing, genetically-stable cell lines capable of expressing recombinant proteins. The system plays an important role in the execution of our corporate strategy as it allows us to develop and produce tailored complex recombinant therapeutic proteins and to genetically engineer and/or chemically modify such proteins pre- and/or post-production. The engineering and modification of the therapeutic proteins have the potential to provide added clinical benefits by improving the biological characteristics (e.g., glycosylation, half-life, immunogenicity).

Our ProCellEx technology allows for many unique advantages, including: biologic optimization; an ability to handle expression of complex proteins; flexible manufacturing with improvements through efficiencies, enhancements and/or rapid horizontal scale-ups; a simplified production process; elimination of the risk of viral contaminations from mammalian components; and intellectual property advantages.

We developed ProCellEx based on our plant cell culture technology for the development, expression and manufacture of recombinant proteins that are the essential foundation of modern biotechnology. We develop new, recombinant therapeutic proteins by using the natural capability of agrobacterium to transfer a DNA fragment into the plant chromosome, allowing the genome of the plant cell to code for specific proteins of interest. The agrobacterium-mediated

transformed cells are then able to produce specific proteins, which are extracted and purified and can be used as therapies to treat a variety of diseases.

Our ProCellEx technology can be utilized to express complex therapeutic proteins belonging to different drug classes, such as enzymes, hormones, monoclonal antibodies, cytokines and vaccines. The entire protein expression process, from initial nucleotide cloning to large-scale production of the protein product, occurs under Current Good Manufacturing Practice-, or cGMP-, compliant, controlled processes. Our plant cell culture technology uses cells, such as carrot and tobacco (BY-2) cells, which undergo advanced genetic engineering and/or chemical modifications, and are grown on an industrial scale in a disposable, flexible bioreactor system. Our system does not involve mammalian or animal-derived components or transgenic field-grown or whole plants at any point in the production process.

Cell growth, from initiating scale-up steps from a cell-bank through large-scale production, takes place in a clean-room environment in flexible, sterile, custom-designed polyethylene bioreactors, and does not require the use of large stainless-steel bioreactors commonly used in mammalian-based systems for recombinant protein production. Unlike these bioreactors, the ProCellEx reactors are easy to use and maintain, allow for rapid horizontal scale-up and do not involve the risk of mammalian viral contamination. Our bioreactors are well-suited for plant cell growth using a simple, inexpensive, chemically defined growth medium. The reactors, which are custom-designed and optimized for plant cell cultures, require low initial capital investment and are rapidly scalable at a low cost.

In addition, we continuously work on the further development and enhancement of our ProCellEx technology.

Plant Cell Production Advantages

ProCellEx®: Protalix’s Differentiated Plant Cell Protein Expression Platform

Our Marketed Products

Both of our commercial products, Elelyso and Elfabrio, are ERTs.

Elelyso for the Treatment of Gaucher Disease

Elelyso (taliglucerase alfa), our first commercial product, was approved by the FDA in 2012 for injection as an ERT for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. In August 2014, the FDA approved Elelyso for injection for children four years of age and greater. Elelyso is the first plant cell derived recombinant protein to be approved by the FDA for the treatment of Gaucher disease and is now approved in more than 40 markets including the United States, Brazil, Israel, and others. It is not approved in the EU.

Gaucher disease, also known as glucocerebrosidase, or GCD, deficiency, is a rare genetic autosomal recessive disorder and one of the most common Lysosomal Storage Disorders, or LSDs, in the world. It is one of a group of disorders that affect specific enzymes that normally break down fatty substances for reuse in the cells. If the enzymes are missing or do not work properly, the substances can build up and become toxic. Gaucher disease occurs when a lipid called glucosylceramide accumulates in the cells of the bone marrow, lungs, spleen, liver, and sometimes the brain. Gaucher disease symptoms can include fatigue, anemia, easy bruising and bleeding, severe bone pain and easily broken bones, and distended stomach due to an enlarged spleen and thrombocytopenia. Epidemiology of Gaucher disease varies; recent literature provides that prevalence of Gaucher disease ranges from 0.70 to 1.75 per 100,000 in the general population. In people of Ashkenazi Jewish heritage, estimates of occurrence vary from approximately 1 in 400 to 1 in 850 people.

The global market for therapies for Gaucher disease, including Sanofi’s Cerezyme®, Shire’s (acquired by Takeda Pharmaceutical Company Limited) Vpriv® and Sanofi’s Cerdelga®, among others, was $1.65 billion in 2025, is forecasted to be approximately $1.6 billion in 2026 and is forecasted to grow at a compound annual growth rate (CAGR) of approximately 0.5% from 2025-2031.

The current standard of care for Gaucher disease is ERT, which is a medical treatment where recombinant enzymes are injected into patients to replace the lacking or dysfunctional enzyme. In Gaucher disease, recombinant GCD is infused to replace the mutated or deficient natural GCD enzyme. Elelyso is the only alternative ERT treatment of Gaucher disease to Cerezyme and Vpriv.

Elfabrio for the Treatment of Fabry Disease

Elfabrio, our second commercial product, was approved by the EC for marketing in the EU and by the FDA for marketing in the United States in May 2023 for adult patients with Fabry disease. Both approvals cover the 1 mg/kg E2W dosage.

On March 5, 2026, the EC ratified the CHMP positive opinion issued in January 2026. The EC decision approves, in the EU, the 2 mg/kg E4W dosing regimen for pegunigalsidase alfa in Fabry disease adult patients stable with an ERT treatment. The CHMP’s positive opinion is the result of an appeal submitted after the CHMP issued a negative opinion in October 2025.

Elfabrio was approved by the FDA with a boxed warning for hypersensitivity reactions/anaphylaxis, consistent with ERT class labeling, and warnings/precautions providing guidance on the signs and symptoms of hypersensitivity and infusion-associated reactions seen in the clinical studies as well as treatments to manage such events should they occur. The warnings/precautions for membranoproliferative glomerulonephritis (MPGN) alert prescribers to the possibility of MPGN and provide guidance for appropriate patient management. Overall, the FDA review team concluded that in the context of Fabry disease as a rare, serious disease with limited therapeutic options that may not be suitable to all individual patients, the benefit-risk of Elfabrio is favorable for the treatment of adults with confirmed Fabry disease. Since the approvals by the FDA and the EMA, Elfabrio has been approved for marketing in more than 10 additional markets for long-term enzyme replacement therapy in adult patients with a confirmed diagnosis of Fabry disease.

Fabry disease, also one of the most common LSDs, is a serious x-linked life-threatening rare genetic disorder. Fabry patients lack or have low levels of α-galactosidase-A resulting in the progressive accumulation of abnormal deposits of a fatty substance called globotriaosylceramide, or Gb3, in blood vessel walls throughout their body. The ultimate consequences of Gb3 deposition range from episodes of pain and impaired peripheral sensation to end-organ failure, particularly of the kidneys, but also of the heart and the cerebrovascular system. Fabry disease occurs in one person per 40,000 to 60,000 males.

The global market for therapies for Fabry disease, that includes agalsidase alfa, agalsidase beta, and Amicus Therapeutics’ Galafold®, among others, is forecasted to be approximately $2.3 billion in 2026 and is forecasted to grow at a CAGR of 6.3% from 2025-2031 reaching approximately $3.2 billion in annual sales in 2031.

The standard of care for Fabry disease is ERT. Currently, the marketed ERTs for Fabry disease are agalsidase alfa (Takeda’s (Shire) Replagal®) agalsidase beta (Sanofi Genzyme’s Fabrazyme®), and pegunigalsidase alfa (Elfabrio). Through an ERT, the missing α-galactosidase-A is replaced with a recombinant form of the protein via intravenous, or IV, infusion once every two weeks. Fabry disease, if left untreated, will progress from a less severe condition to a more serious one. It can have a significant impact on quality of life due to presence of serious, chronic and debilitating complications, including cardiovascular and renal complications, and comorbidities such as pain can have a significant impact on the psychological well-being of Fabry patients and their social functioning. Fabry disease often involves substantial reduction in life expectancy. Causes of death are most often cardiovascular disease and, to a lesser extent, cerebrovascular disease and renal disease. The life expectancy of Fabry patients is significantly shorter compared to the general population. Untreated male Fabry patients may experience shortened lifespans to approximately 50 years, and 70 years for untreated female patients with Fabry disease. This represents a 20- and 10-year reduction of their respective lifespans.

Key Trials and Design for Elfabrio

Our clinical development program for Elfabrio, or PRX-102, was designed to show that PRX-102 has a potential clinical benefit in all adult Fabry patient populations when compared to two marketed Fabry disease enzymes, agalsidase alfa and agalsidase beta. In preclinical studies, PRX-102 showed significantly longer half-life due to higher enzyme stability, enhanced activity in Fabry disease affected organs leading to reduction of the accumulated substrate and reduced immunogenicity, which together can potentially lead to improved efficacy through increased substrate clearance and significantly lower formation of anti-drug antibodies, or ADAs.

The Phase 3 clinical program included three individual studies; the BALANCE study, the BRIDGE study and the BRIGHT study. In the Phase 3 clinical program overall, two potential dosing regimens for PRX-102 were analyzed; 1 mg/kg E2W, with the potential for improved efficacy and safety offering a potential alternative to existing enzyme replacement therapies, and 2 mg/kg E4W. In addition, the Phase 3 clinical trials, a dose range finding study program included two extension studies in which subjects that participated in our Phase 1/2 clinical trials and Phase 3 clinical trials had the opportunity to enroll and continue to be treated with PRX-102.

Extension Studies

Two long-term open-label extension studies were available for patients who completed the BALANCE, BRIDGE, and BRIGHT studies, and the extension of the Phase 1/2 study. Overall, 126 patients who participated in our PRX-102 clinical program initially opted, with the advice of the treating physician, to enroll in one of the extension studies: 97 patients in the 1 mg/kg E2W extension study (PB-102-F60, NCT03566017) (10 patients who completed an extension study from the Phase 1/2 study, 18 patients who completed the BRIDGE study; 69 patients who completed the BALANCE study), and 29 patients who completed the BRIGHT study in the 2 mg/kg E4W extension study (PB-102-F51, NCT03614234). Two of the patients in the 2 mg/kg E4W extension study were treated with 1 mg/kg E2W.

After the approval of Elfabrio in the US and the EU, sponsorship and administration of the extension studies was transferred to Chiesi. Over time, and as Elfabrio is approved for marketing in different jurisdictions, patients routinely switch-out of the open-label extension studies. Most such patients have transferred to a commercial setting; others withdrew for other reasons. Accordingly, the 1 mg/kg E2W dosage extension study is now closed as most patients have transferred to commercial or expanded access programs. In addition, the US-based patients that enrolled in the 2 mg/kg E4W dosage extension study are now being treated with Elfabrio on a commercial basis; EU-based patients remain on the extension study.

Over the course of the PRX-102 clinical development program, 142 Fabry disease subjects, in the aggregate, were exposed to treatment with PRX-102. Patients contributing to the integrated safety dataset included subjects from the Phase 1/2 study, each of the BALANCE, BRIDGE and BRIGHT studies, and the Phase 3 extension studies. The safety and immunogenicity profile of PRX-102 are in line with the safety and immunogenicity profiles of other ERTs.

Pediatric FLY Study

Chiesi is sponsoring a clinical trial entitled “Multi-Centre, Open-label Trial to Assess the Safety, Pharmacodynamics, Efficacy and Pharmacokinetics of pegunigalsidase alfa in Patients From 2 Years to Less Than 18 Years of Age With Confirmed Fabry Disease” (NCT06328608). Recruitment is ongoing. The design of the study is based on the Initial Pediatric Study Plan (iPSP) agreed to with the FDA and the paediatric investigation plan (PIP) for Elfabrio, which has been accepted, as amended, by the Paediatric Committee (PDCO) of the EMA. The study involves the 1 mg/kg E2W dosage regimen.

Japanese RISE Study

Chiesi is currently recruiting patients for its clinical trial entitled “A Multicenter Open-Label Study to Evaluate the Safety, Pharmacokinetics, Pharmacodynamics, and Efficacy of Pegunigalsidase Alfa (PRX-102) in Japanese Patients With Fabry Disease,” or the RISE study (NCT05710692). The aim of the RISE study is to evaluate the safety and efficacy of pegunigalsidase alfa in Japanese patients (adults and adolescents) affected by Fabry disease. It is planned that a total of approximately 16 male and female Fabry disease patients between the ages of 13 and 70 years will be enrolled in the study which is being conducted in Japan. The study will evaluate both the 1 mg/kg E2W and the 2 mg/kg E4W dosage regimens.

Our Pipeline – Clinical Programs

PEGylated Uricase (PRX-115)

PRX-115 is our proprietary recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme under development for the potential treatment of patients with uncontrolled gout.

Currently, we are actively recruiting for the RELEASE study, a Phase 2 clinical trial of PRX-115 entitled “A Multicenter, Randomized, Double-Blind, Placebo-Controlled, Phase 2 Study Assessing the Efficacy, Safety, and Dosing Regimen Selection of Multiple Intravenous Infusions of PRX-115 With and Without Methotrexate Versus Placebo in Adult Patients with Gout.” The RELEASE study is a multicenter, randomized, double-blind, placebo-controlled Phase 2 study assessing the efficacy, safety, and dosing regimen selection of multiple IV infusions of PRX-115 over 24 weeks, with or without the immunomodulator methotrexate (MTX), versus the respective placebos in adult patients with gout. Participants will receive PRX-115 by intravenous (IV) infusions according to different treatment schedules, with and without MTX. We expect to enroll approximately 150 adult patients in the study in clinical sites located in the United States, Georgia, and Israel.

Gout is the most common inflammatory arthritis, affecting a projected 11.9 million adults in the United States alone. Based on market research we have commissioned, we estimate that approximately 25% of the gout population in the US and Western Europe does not have their gout controlled. Some of those patients cannot be treated with existing therapies; others stop treatment with existing therapies due to adverse events. In addition, such research presents that there are gout patients treated with existing therapies that continue to suffer from tophi despite having reached urate target levels. The risk of gout increases with age, and is more common in males. Gout results from sustained elevation of serum urate levels (hyperuricaemia). Urate levels may increase due to diet, genetic predisposition and environmental factors leading to the deposition of monosodium urate crystals and\or tophi in joints, tendons and other tissues, which triggers recurrent episodes of pronounced acute inflammation, known as gout flares. Gout leads to substantial morbidity, severe pain, reduced quality of life, decreased physical function, increased healthcare costs, and lost economic productivity. Furthermore, gout is strongly associated with a number of comorbidities, including hypertension, cardiovascular disease, renal impairment, diabetes, obesity, hyperlipidaemia and frequently occurs in a combination known as metabolic syndrome.

Uncontrolled gout is when serum urate (sUA) levels are above the maximum medically appropriate level (6.8 mg/dL), as well as tophi formation and/or flares that cannot be treated with available urate lowering therapies. Currently available Urate-lowering therapies (ULTs) can be effective in treating gout. However, factors such as low adherence, under dosing, disease progression that causes high patient burden or patients that are not suitable for available therapy, require new, effective and safe therapies to treat these underserved uncontrolled gout patients.

The uricase enzyme, which does not exist naturally in humans, converts urate to allantoin, which is easily eliminated through urine. PRX-115, our recombinant uricase enzyme, expressed via our ProCellEx system, is designed to lower urate levels and improve clinical manifestation of the disease while having low immunogenicity and increased half-life of the drug in the blood. Pre-clinical data demonstrates long half-life, reduced immunogenic risk and high specific activity support the potential of PRX-115 to be a safe and effective treatment for patients with uncontrolled gout.

We completed a Phase 1 clinical trial of PRX-115 for the potential treatment of uncontrolled gout entitled “A Double-blind, Placebo-controlled, Single Ascending Dose Study to Evaluate the Safety, Tolerability, Pharmacokinetics, and Pharmacodynamics Properties of PRX-115 in Adult Volunteers With Elevated Uric Acid Levels” (NCT05745727), or the FIH study. The FIH study was conducted at New Zealand Clinical Research (NZCR) under the New Zealand Medicines and Medical Devices Safety Authority (MedSafe) and the Health and Disability Ethics Committee (HDEC) guidelines. The completed study included eight sequential dosing cohorts, each composed of eight subjects (six active and two placebo), a 3:1 ratio. Subjects in each cohort, males and females aged 18 through 65, received a single dose of PRX-115 and were analyzed for safety, pharmacokinetics (PK), pharmacodynamics (PD) (concentrations of plasma urate) and immunogenicity for 85 days. Overall, 64 randomized subjects were enrolled across the eight cohorts; 48 subjects were treated with PRX–115 and 16 subjects were treated with placebo.

Key results from the full FIH study are as follows:

●Exposure to PRX-115 increased in a dose-dependent manner. Detectable PRX-115 levels were observed in plasma for up to 12 weeks from subjects in cohorts 6, 7, and 8. See Figure 1.

Figure 1

●In all tested doses, a single dose of PRX-115 rapidly reduced plasma urate levels. The effect and duration of response were found to be dose dependent. Following a single dose, mean plasma urate levels remained below 6.0 mg/dL for up to 12 weeks at the highest doses. See Figure 2.

Figure 2

●All randomized participants completed the study. PRX-115 was found to be well-tolerated. See Figure 3.

Figure 3. Overall Summary of Treatment Emergent Adverse Events*

*Number of subjects reporting at least one adverse event.

Only 25% of the subjects treated with PRX-115 in the study (12/48) reported study drug-related adverse events. The majority of such adverse events were mild to moderate and transient in nature. One subject experienced an anaphylactic reaction in cohort 2 immediately following the commencement of the infusion (6 minutes) and, accordingly, was exposed to approximately 5% of the applicable PRX-115 dose. The reaction resolved completely and the subject continued in the study for follow-up safety assessments. Premedication with anti-histamines and steroids were administered to all subjects following the anaphylaxis event. No other subjects experienced a similar reaction and no other serious adverse events were reported in the study. No related adverse events were reported for subjects treated in cohorts 6 and 7, and only for one patient per cohort in cohorts 4, 5 and 8. Approximately 50% of the subjects developed ADAs. The incidence of ADAs showed a negative relationship with the applicable PRX-115 dose, with the highest incidence observed in Cohort 1 and lower incidences in the higher PRX-115 dose cohorts.

These results suggest that PRX-115 has the potential to be a promising treatment option for patients with gout. The results demonstrate that PRX-115 may offer an effective urate-lowering treatment with an added benefit of a potentially wide dosing interval, which may enhance patient compliance and treatment flexibility. Further studies are needed to confirm the long-term safety and efficacy of PRX-115 in the gout patient population.

To date, two variants of recombinant uricases are approved for marketing: (i) Krystexxa® (pegloticase) for treatment of chronic gout refractory to conventional therapy (gout patients who have contraindication/failure of other lowering urate treatments) and (ii) Elitek®, indicated for the treatment of tumor lysis syndrome but not gout. Both have a black box warning for anaphylaxis and other major side-effects. The FDA label of Krystexxa was amended in 2022 to include co-treatment of methotrexate to prolong efficacy and increase tolerability in patients with refractory gout. Krystexxa is marketed only in the US.

Our Pipeline – Preclinical and Research Programs

PRX-119

PRX-119 is our plant cell-expressed PEGylated recombinant human DNase I product candidate which we are designing to have an elongated half-life in the circulation for the potential treatment of NETs-related diseases. NETs, or Neutrophil extracellular traps, are web-like structures released by activated neutrophils that trap and kill a variety of microorganisms. NETs are composed of DNA, histones, antimicrobial and pro-inflammatory proteins. Excessive formation or ineffective clearance of NETs can cause different pathological effects. NETs formation has been observed in various autoimmune, inflammatory and fibrotic conditions, diverse forms of thrombosis, cancer and metastasis. According to scientific literature, animal studies have demonstrated that DNase treatment reduce NETs toxicity. Our proprietary modified DNase I, which we have designed for long and customized systemic circulation in the bloodstream, may potentially enable effective treatment for these conditions.

The administration of PRX-119 resulted in a decrease in circulating of DNA levels and significantly enhanced the survival of mice in both a CLP-induced sepsis model and an ARDS model.

Antisense oligonucleotide (ASO) therapies for rare renal indications

We are currently engaged in a collaborative research project with Secarna Pharmaceuticals GmbH & Co. KG, or Secarna, through which we are partnering in the discovery of novel antisense oligonucleotide (ASO) therapies against multiple targets for rare renal indications. We have selected pharmaceutical targets with fundamental biological roles in rare renal indications, and Secarna plans to apply OligoCreator®, its proprietary AI-empowered oligonucleotide discovery and development platform, to design and profile ASO candidates against those targets. It is our mutual goal to advance the programs from discovery stage to clinical trials. As part of the collaboration, Secarna granted to us an option to an exclusive, worldwide milestone and royalty bearing license to further develop, market, and commercialize therapeutic programs.

Commercialization of Approved Products

Elelyso – Pfizer

We have licensed to Pfizer the global rights to market and sell Elelyso in all markets, excluding Brazil, pursuant to the Amended Pfizer Agreement. Pursuant to such agreement we have agreed to sell drug substance to Pfizer for the production of Elelyso for a fixed cost, subject to certain terms and conditions, through 2030. Any failure to comply with our supply commitments may subject us to substantial financial penalties. The Amended Pfizer Agreement includes customary provisions regarding cooperation for regulatory matters, patent enforcement, termination, indemnification and insurance requirements. We retain distribution rights to taliglucerase alfa in Brazil.

Our sales of Elelyso to Pfizer are made at a fixed price directly to Pfizer who maintains product in inventory, and we recognize revenue from those sales upon delivery. The timing of such sales does not directly reflect patient demand and, on a period-to-period basis, there may be variations in the orders placed by Pfizer resulting in variability in our period-to-period results. There may be periods during which no orders are placed by Pfizer, whether as a result of inventory de-stocking or other factors.

Alfataliglicerase – Fundação Oswaldo Cruz (Fiocruz)

Elelyso, marketed as BioManguinhos alfataliglicerase in Brazil, is commercialized in Brazil through the Brazil Agreement with Fiocruz which became effective in January 2014. Gaucher patients in Brazil are entitled to receive ERT paid for by the Brazilian MoH. The Brazilian MoH clinical treatment guidelines (PCDT) state that BioManguinhos alfataliglicerase is the therapy of choice for newly diagnosed patients. BioManguinhos alfataliglicerase is currently estimated to be used by approximately 25% of Gaucher patients in Brazil.

The Brazil Agreement provides for a staged technology transfer that is intended to transfer to Fiocruz the capacity and skills required for the Brazilian government to construct its own manufacturing facility, at its sole expense, and to produce a sustainable, high-quality, and cost-effective supply of BioManguinhos alfataliglicerase. Fiocruz has not satisfied certain purchase commitments under the Brazil Agreement. We continue to sell BioManguinhos alfataliglicerase for a fixed price through purchase orders and, on a continuous basis, we discuss with Fiocruz potential steps to maximize sales of BioManguinhos alfataliglicerase to the Brazilian MoH.

Our sales of BioManguinhos alfataliglicerase to Fiocruz are made at a fixed price directly to Fiocruz who maintains product in inventory, and we recognize revenue from those sales upon delivery. The timing of such sales does not directly reflect patient demand and, on a period-to-period basis, there may be variations in the orders placed by Fiocruz resulting in variability in our period-to-period results. There may be periods during which no orders are placed by Fiocruz, whether as a result of inventory de-stocking or other factors.

Elfabrio (pegunigalsidase alfa/PRX-102) – Chiesi Farmaceutici

Elfabrio is commercialized worldwide by Chiesi under the Chiesi Agreements. Under the Chiesi Ex-US Agreement, we granted to Chiesi an exclusive license for all markets outside of the United States to commercialize pegunigalsidase alfa. At execution of the Chiesi Ex-US Agreement, Chiesi made an upfront, non-refundable, non-creditable payment to Protalix Ltd. of $25.0 million, followed by additional payments of $25.0 million to cover development costs in the aggregate. Protalix Ltd. currently remains eligible to receive additional payments of up to a maximum of $270.0 million,

in the aggregate and including the $25.0 million currently payable, subject to the satisfaction of certain regulatory and commercial milestones. Protalix Ltd. agreed to manufacture all of the pegunigalsidase alfa needed for all purposes under the agreement, subject to certain exceptions, and Chiesi agreed to purchase the pegunigalsidase alfa from Protalix Ltd., subject to certain terms and conditions. Chiesi is required to make payments to Protalix Ltd. ranging from 15% to 35% of its net sales under the Chiesi Ex-US Agreement, depending on the amount of annual sales, subject to certain terms and conditions, as consideration for product supply. The agreement shall remain in effect until the later of (i) the expiration of the last enforceable Protalix patent right thereunder or (ii) the 15th anniversary of the launch on a country-by-country basis, subject to certain terms and conditions, unless earlier terminated in accordance with the terms and conditions thereof.

Under the Chiesi US Agreement we granted to Chiesi the exclusive license to develop and commercialize pegunigalsidase alfa in the United States. Protalix Ltd. received from Chiesi an upfront, non-refundable, non-creditable payment of $25.0 million from Chiesi and additional payments of $20.0 million to cover development costs. To date, we have received the complete amount of such development costs, and, following the approval of Elfabrio by the FDA, we received a milestone payment equal to $20.0 million. Protalix Ltd. currently remains eligible to receive additional payments of up to a maximum of $740.0 million, in the aggregate, subject to the satisfaction of certain regulatory and commercial milestones. Chiesi is required to make payments to Protalix Ltd. ranging from 15% to 40% of its net sales under the Chiesi US Agreement to Protalix Ltd., depending on the amount of annual sales, subject to certain terms and conditions, as consideration for product supply. The agreement shall remain in effect until the later of (i) the expiration of the last enforceable Protalix patent right thereunder or (ii) the 15th anniversary of the launch in the US, unless earlier terminated in accordance with the terms and conditions thereof.

We manufacture Elfabrio drug substance and, after the fill\finish process is complete, we sell the resulting drug product to Chiesi under both agreements. Operationally, Chiesi conducts its own internal commercial forecasting to guide inventory needs. To date, Chiesi has placed bulk orders for Elfabrio. As a result, the orders we receive from Chiesi may not be timed in relation to Chiesi’s pace of patient acquisition and retention. Accordingly, our sales of Elfabrio to Chiesi may not reflect patient demand for Elfabrio as we sell the fulfilled orders to Chiesi’s inventory. In addition, on a period-to-period basis, there may be variations in the orders placed by Chiesi resulting in variability in our period-to-period results as we, in turn, recognize revenues from sales of Elfabrio upon delivery of the drug product to Chiesi. There may be periods during which no orders are placed by Chiesi, whether as a result of inventory de-stocking or other factors. We do not anticipate that these Chiesi ordering patterns will change until the demand characteristics for Elfabrio stabilize, the launch of Elfabrio matures and Elfabrio’s share of the market for Fabry disease treatment grows both inside the US and outside the US.

On August 29, 2022, we entered into a Fill/Finish Agreement, or the F/F Agreement, and a Letter Agreement, or the Letter Agreement, in each case with Chiesi. Under the F/F Agreement, we agreed to supply Chiesi with drug substance for pegunigalsidase alfa and, following relevant technology and technical information transfer activities, Chiesi has agreed, among other things, to provide us with commercial fill/finish services for pegunigalsidase alfa, including to support the anticipated global launch of pegunigalsidase alfa. The Letter Agreement changed the obligations of both us and Chiesi under the Chiesi Agreements with respect to, among other things, the evaluation, selection and establishment of an initial alternate source of commercial fill/finish services for pegunigalsidase alfa. In addition, the Letter Agreement amended certain provisions of the Chiesi Agreements to reflect the appointment of Chiesi as a supplier to our company of commercial fill/finish services, and the potential establishment of an initial alternate source of commercial fill/finish services. Subsequently, in November 2024, we agreed that a different Chiesi facility may act as a secondary supplier of such services and that the F/F Agreement shall have an initial term of 10 years, unless terminated earlier in accordance with the terms thereof. Prior to expiration of the initial term, the term may be extended by mutual agreement for an additional period of seven years upon mutual written agreement.

Intellectual Property

We have a robust patent portfolio, which is a key element of our overall strategy. We work to continually enhance, strengthen, and protect our intellectual property and now hold a broad portfolio of approximately 70 patents globally, including in Europe, the US, Israel and additional countries worldwide. Our patents are designed to protect our proprietary technology, proprietary products and product candidates, and their methods of use. Additionally, we have approximately 45 pending patent applications.

During the year ended December 31, 2025, we received the following:

●New patents in each of USA, and Australia for the patent family named “Therapeutic Regimen For the Treatment of Fabry Using Stabilized Alpha-galactosidase, adding to the single previously granted patent in such family.

●A new patent in USA for the patent family named “Removal of Constructs from Transformed Cells.”

Our competitive position and future success depend, in part, on our ability, and that of our licensees, to obtain and leverage the intellectual property rights covering our product candidates, know-how, methods, processes and other technologies, to protect our trade secrets, to prevent others from using our intellectual property and to operate without infringing on the intellectual property rights of third parties. We seek to protect our competitive position by filing United States, EU, Israeli and other foreign patent applications covering our technology, including both new technology and improvements to existing technology. Our patent strategy includes obtaining patents on methods of production, compositions of matter and methods of use. We also rely on know-how, continuing technological innovation, licensing and partnership opportunities to develop and maintain our competitive position. With respect to Elfabrio, we continuously seek to have the patent term extended in those countries in which it has been approved for marketing.

As of December 31, 2025, our patent portfolio consisted of several patent families (consisting of patents and/or patent applications) covering our technology, protein expression methodologies and system, products and product candidates, as follows:

Patent Name/Int. App. No.

Global Pending Jurisdictions

Granted Jurisdictions

Nominal Expiry

Production of High Mannose Proteins in Plant Culture/PCT/ Il2004 000181

N/A

Russian Federation, Australia

2029(1)

(3)

Large Scale Disposable Bioreactor/PCT/Il2008/000614

N/A

Australia, Canada, China, Europe, Hong Kong, India, Israel, Republic of Korea, Russian Federation, Singapore, South Africa, USA, Brazil

2028

Stabilized Alpha-galactosidase and uses thereof/PCT/Il2011/ 000209

Brazil

Canada, South Africa, Russian Federation, Singapore, Israel, India, New Zealand, Republic of Korea, Australia, China, Japan, USA, Europe, Hong Kong, India, Brazil

2031(3)

Nucleic Acid Construct for Expression of Alpha-galactosidase in Plants and Plant Cells/PCT/ Il2011/000719

N/A

India, China, Republic of Korea, Japan, Israel, Europe, Hong Kong, USA, Brazil

2031(2)

Therapeutic Regimen For The Treatment of Fabry Using Stabilized Alpha-galactosidase/ PCT/Il2018/050018

Europe, Brazil, Japan, Canada, Israel, Republic of Korea, China, Hong Kong

South Africa, New Zealand, Russian Federation, USA, Chile, Mexico, Australia

2038

Dry Powder Formulations of DNase 1/PCT/Il2013/050094

N/A

Israel, USA

2033

DNase I Polypeptides, Polynucleotides Encoding Same, Methods of Producing DNase I and uses thereof in Therapy/PCT/ Il2013/050097

N/A

Europe, Israel, Brazil

Inhalable Liquid Formulations of DNase I/PCT/Il2013/050096

N/A

Israel, USA

2033

Removal of Constructs from Transformed Cells/PCT/IL2019/ 051266

USA, Israel, New Zealand, Australia

Japan, USA

2040

Long-Acting DNase/PCT/IL2021/051207

Canada, Israel, USA, Japan, Europe, Hong Kong, Republic of Korea, China

N/A

2041

Dicer-Like Knock-Out Plant Cells/ PCT/IL2021/051194

Israel, USA, Japan, Europe, Hong Kong, Republic of Korea, China

N/A

2041

Modified Uricase and Uses Thereof/PCT/IL2021/051305

Japan, Canada, Brazil, USA, Israel, Mexico, Europe, Republic of Korea, China

N/A

2041

Methods of treating diseases associated with elevated uric acid

USA

N/A

N/A

(1)Patent granted in Australia expires in 2029.

(2)Patent granted in the United States expires in 2032.

(3)PTE/SPC applications were submitted for some of the patents.

We are aware of U.S. patents, and corresponding international counterparts of such patents, owned by third parties that contain claims covering methods of producing glucocerebrosidase. We do not believe that, if any claim of infringement were to be asserted against us based upon such patents, taliglucerase alfa would be found to infringe any valid claim under such patents. However, there can be no assurance that a court would find in our favor or that, if we choose or are required to seek a license to any one or more of such patents, a license would be available to us on acceptable terms or at all.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly evolving technology and significant competition. Competition from numerous existing companies and others entering the fields in which we operate is intense and expected to increase. Most of these companies have large, established research and development, manufacturing, marketing, financial, technological personnel and managerial resources. In addition, many specialized biotechnology companies have formed collaborations with large, established companies to support research, development and commercialization of products that may be competitive with our current and future product candidates and technologies. Acquisitions of competing companies by large pharmaceutical or biotechnology companies could further enhance such competitors’ financial, marketing and other resources. Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize competitive products or technologies on their own through collaborations with pharmaceutical and biotechnology companies.

With respect to Gaucher disease, we face competition primarily from two ERTs, Sanofi Genzyme’s Cerezyme and Takeda’s (Shire) Vpriv. In addition, Actelion markets a small molecule drug for the treatment of mild to moderate Type 1 Gaucher disease (Zavesca or miglustat), an oral treatment approved by the FDA only for patients for whom ERT is not a therapeutic option. In addition, Sanofi Genzyme markets a small molecule oral drug, Cerdelga®, approved for Gaucher patients with certain CYP2D6 metabolizer status. We are aware of other treatments, such as venglustat which completed a Phase 3 clinical trial for the treatment of Type 3 Gaucher disease, and gene therapies in clinical development and later stage clinical development for the treatment of Gaucher disease.

With respect to Fabry disease, we face competition primarily from Sanofi Genzyme (Fabrazyme), Takeda (Replagal) and Amicus (Galafold®). In addition, we are aware of other late clinical stage, early clinical stage and experimental drugs that are being developed by other companies for the treatment of Fabry disease. In particular, Sangamo Therapeutics, Inc. has initiated a rolling Biologics License Application (BLA) submission to the FDA for accelerated approval of ST-920, its gene therapy in development for the treatment of Fabry disease.

With respect to uncontrolled gout, we face competition from Amgen Inc.’s Krystexxa, which is indicated for treatment of chronic gout in adult patients refractory to conventional therapy. In addition, we are aware of other clinical stage, early clinical stage and experimental refractory or chronic gout treatments. For example, Swedish Orphan Biovitrum AB (Sobi) has developed Pegadriscase (NASP) for the treatment of chronic refractory gout that recently completed a Phase 3 clinical trial, and the FDA has set a Prescription Drug User Fee Act (PDUFA) target action date in June 2026 for its review and decision on NASP. We are also aware of another product candidate that is the subject of a Phase 2 clinical trial for hyperuricemia in gout patients with advanced CKD.

We also face potential competition to our ProCellEx system from companies that are developing other platforms for the expression of recombinant therapeutic pharmaceuticals. We are aware of companies that are developing alternative technologies to develop and produce therapeutic proteins in anticipation of the expiration of certain patent claims covering marketed proteins. A number of companies have developed or are developing alternative expression technologies. Examples include Crucell N.V.’s (acquired by Johnson & Johnson) expression system based on human-cell technology, Dyadic International Inc.’s expression system based on a fungus, Pfenex Inc.’s (acquired by Ligand Pharmaceuticals Incorporated) bacteria-based expression system, and others. Companies developing alternate plant-based technologies include iBio, Inc., Medicago, Inc., and Eleva Biologics. Unlike ProCellEx, these alternate technologies are not cell-based. These companies base their product development on transgenic plants or whole plants.

Manufacturing

We use our manufacturing facility in Carmiel, Israel, which has approximately 1,466 sq/m of clean rooms built according to industry standards, to manufacture drug substance for Elfabrio and Elelyso for commercial purposes. We maintain an approximately 316 sq/m pilot plant for protein development and to manufacture supplies for clinical trials (Phase 1 and Phase 2). Elelyso, Elfabrio, PRX-115 and our other drug product candidates must be manufactured in a clean environment and in compliance with cGMPs set by the FDA and other relevant foreign regulatory authorities. We intend to use our manufacturing space to produce all of the drug substance needed in connection with the clinical trials for our other product candidates.

Our manufacturing facility is an approved multi-product facility. Our facility’s current capacity can serve all of our current commercial and clinical needs and we are preparing to expand the manufacturing space within our current facility to add additional purification capabilities in anticipation of future needs with respect to the potential commercialization of PRX-115.

Our manufacturing facilities are subject to inspections by various regulatory authorities from time to time. We have undergone successful in-person and virtual inspections by the FDA, the Irish Medicines Board (under the EMA’s centralized marketing authorization procedure), the Brazilian National Health Surveillance Agency (ANVISA), the Israeli Ministry of Health, the Turkish Ministry of Health, the Australian Therapeutic Goods Administration (TGA), Health Canada, and the South Korean Ministry of Health and Welfare.

Raw Materials and Suppliers

We believe that the raw materials that we require throughout the manufacturing process of Elfabrio and Elelyso, and our current and potential drug product candidates, are widely available from numerous suppliers and are generally considered to be generic industrial biological supplies. We rely on a single, approved supplier for certain materials relating to the current expression of our proprietary biotherapeutic proteins through ProCellEx. We have identified additional suppliers for most of the materials required for the production of our product candidates.

Development and regulatory approval of our pharmaceutical products are dependent upon our ability to procure active ingredients (DS) and certain packaging materials from sources approved by the FDA and other regulatory authorities.

The FDA and other regulatory approval processes require manufacturers to specify their proposed suppliers of active ingredients (which is not relevant to our company), intermediate material and certain packaging materials in their applications. From time to time, we intend to continue to identify alternative approved suppliers to ensure the uninterrupted supply of necessary raw materials.

Government Regulations

U.S. Drug Development Process

The FDA regulates drugs under the U.S. Federal Food, Drug, and Cosmetic Act, or the FFDCA, and the implementing regulations thereto. Drugs are also subject to other federal, state and local statutes and regulations. Biologics are subject to regulation by the FDA under the FFDCA, Section 351 of the Public Health Service Act, and related regulations and other federal, state and local laws and regulations. Biological products include a wide variety of products including vaccines, blood and blood components, gene therapies, tissue and proteins. Unlike most prescription products made through chemical processes, biological products generally are made from human and/or animal materials. To be lawfully marketed in interstate commerce, a recombinant protein biologic product must be the subject of a BLA issued by the FDA on the basis of a demonstration that the product is safe, pure and potent, and that the facility in which the product is manufactured meets standards to assure that the product continues to be safe, pure and potent. The FDA has developed, and is continuously updating, the requirements and has issued documents concerning the regulation of cellular and tissue-based products. Manufacturers of cell and tissue-based products must comply with the FDA’s current good tissue practices, or cGTP, which are FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of such products. The primary intent of the cGTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease.

The process of obtaining regulatory approvals and ensuring compliance with appropriate federal, state and local statutes and regulations in the United States, and foreign statutes and regulations, requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, product detention, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. The process required by the FDA before a biological product or drug may be marketed in the United States generally involves the following:

●Completion of preclinical laboratory tests, animal studies and formulation studies, with certain studies conducted in accordance with Good Laboratory Practice regulations, or GLPs, and other applicable regulations;

●Submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;

●Approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated;

●Performance of adequate and well-controlled clinical trials according to Good Clinical Practices, or GCPs, to establish the safety and efficacy of a proposed drug candidate, and the safety, purity and potency of a proposed biological product candidate, for its intended use;

●Submission to the FDA of a BLA for a new biological product or a new drug application, or NDA, for a new drug;

●Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

●satisfactory completion of potential inspection of selected clinical investigation sites to assess compliance with GCPs; and

●FDA review and approval of the BLA or NDA.

Once a product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit, among other things, the results of the preclinical tests, together with manufacturing information and analytical data appropriate to the development stage, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product to humans. An IND will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the trial includes an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND review time is 30 days unless there are deficiencies and/or the FDA, within the 30-day time period, places the IND on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance with FDA requirements, in which case clinical trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted. FDA may also place a trial on a partial clinical hold. A partial clinical hold is a delay or suspension of only part of the clinical work requested or ongoing under the IND. No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold. Following issuance of a clinical hold or partial clinical hold, an investigation (or full investigation in the case of a partial clinical hold) may only begin or resume after the FDA has notified the sponsor that the investigation may proceed.

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all subjects participating in the clinical trial provide their informed consent regarding the trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution. An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject, or his or her legal representative, and must monitor the clinical trial until completed. Once an IND is in effect, each new clinical protocol and any amendments to the protocol must be submitted to the FDA for review, and to the IRBs for approval.

Human clinical trials are typically conducted in three sequential Phases that may overlap or be combined:

●Phase 1. The product is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing may be conducted in patients having the specific disease.

●Phase 2. Phase 2 clinical trials involve investigations in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and the optimal dosage and schedule.

●Phase 3. Phase 3 clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for regulatory approval and product labeling.

Post-approval studies, also called Phase IV trials, may be conducted after initial marketing approvals. These studies are used to obtain additional experience from the treatment of patients in the intended therapeutic indication and may be required by the FDA as part of the approval process.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety reports must be submitted to the FDA and the investigators for serious and unexpected side effects. Phase 1, Phase 2 and Phase 3 testing may not be completed successfully within any specified period, if at all. The FDA or the trial sponsor

may suspend or terminate a clinical trial at any time on various grounds, including a finding that the study subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the applicable product candidate does not undergo unacceptable deterioration over its shelf life.

The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the product candidate, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA or BLA, requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial user fees which may be waived under certain limited circumstances.

The testing and approval processes require substantial time and effort, and may not result in approval on a timely basis, if at all. The FDA may refuse to approve a BLA or NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. Generally, it takes one to three years to obtain approval. If questions arise during the FDA review process, approval may take a significantly longer period of time.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require Phase IV testing which involves clinical trials designed to further assess a drug’s or biologic’s safety and effectiveness after BLA or NDA approval and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA imposes other conditions, including distribution restrictions or other risk management mechanisms, including a risk evaluation and mitigation strategy, or REMS, which can materially affect the potential market and profitability of the product.

In addition, the Pediatric Research Equity Act, or the PREA, requires a sponsor to conduct pediatric clinical trials for most biologics and drugs, for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under the PREA, original NDAs and BLAs and certain supplements must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must evaluate the safety and effectiveness, or safety, purity, and potency, of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is deemed safe and effective, or safe, pure and potent. The sponsor may request or the FDA may grant a deferral of pediatric clinical trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug or biologic is ready for approval for use in adults before pediatric clinical trials are complete or that additional data need to be collected before the pediatric clinical trials begin.

Orphan Drug Designation

Under the Orphan Drug Act of 1983, the FDA may grant orphan drug designation to drugs and biological products intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 persons in the United States but that sales in the United States are not expected to recover the costs of developing and marketing a treatment drug. Orphan product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. Among the benefits of orphan drug designation are possible funding and tax savings to support clinical trials, other financial incentives and a waiver of the marketing application user fee.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not

approve any other applications to market the same treatment for the same indication for seven years, except in limited circumstances, such as (i) the drug’s orphan designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another applicant’s product; (iv) the orphan exclusivity holder is unable to assure the availability of a sufficient quantity of drug; or (v) a showing of clinical superiority to the product with orphan exclusivity by a competitor product. Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Orphan drug status in the EU has similar but not identical benefits in the EU.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between (a) the effective date of an IND and the submission date of a BLA or an NDA plus (b) the time between the submission date of a BLA or an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension and the extension must be requested prior to expiration of the patent. The U.S. Patent and Trademark Office, or USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. We anticipate that we will apply for restorations of the patent term for certain of patents covering our product candidates.

Fast Track Designation; Breakthrough Therapy Designation

The FDA has a fast track program that is designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need, the purpose being to make important new drugs available to patients earlier. A drug candidate that receives Fast Track designation from the FDA is eligible for some or all of the following: more frequent meetings with the FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval; more frequent written communication from the FDA about such things as the design of the proposed clinical trials; eligibility for the FDA’s Accelerated Approval and Priority Review, if relevant criteria are met; and eligibility for Rolling Review, which allows a drug company to submit completed sections of its BLA or NDA for review by the FDA, rather than waiting until every section of the BLA or NDA is completed before the entire application can be reviewed. BLA or NDA review usually does not begin until the drug company has submitted the entire application to the FDA.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product candidate can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

Accelerated Approval; Breakthrough Therapy Designation

Section 901 of the U.S. Food and Drug Administration Safety Innovations Act amends the FFDCA to allow the FDA to base Accelerated Approval for drugs for serious conditions that fill an unmet medical need on whether the drug has an effect on a surrogate or an intermediate clinical endpoint. A surrogate endpoint used for Accelerated Approval is a marker; that is, a laboratory measurement, radiographic image, physical sign or other measure, that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on irreversible morbidity and mortality. The FDA bases its decision on whether to accept the proposed surrogate or

intermediate clinical endpoint on the scientific support for that endpoint. Studies that demonstrate a drug’s effect on a surrogate or intermediate clinical endpoint must be “adequate and well controlled” as required by the FFDCA.

The Accelerated Approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Under subpart H of the Accelerated Approval pathway, the FDA may grant marketing approval for a new drug product on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely, based on epidemiologic, therapeutic, pathophysiologic, or other evidence, to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity. The Accelerated Approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase IV or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA, which could adversely impact the timing of the commercial launch of the product.

Post-Approval Requirements

Drugs approved by the FDA are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse effects with the product, reporting of changes in distributed products which would require field alert reports (FARs), drugs and biological product deviation reports (BPDRs) providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements. In September 2007, the Food and Drug Administration Amendments Act of 2007 was enacted, giving the FDA enhanced post-marketing authority, including the authority to require post marketing studies and clinical trials (PMRs and PMCs), labeling changes based on new safety information, and compliance with risk evaluations and mitigation strategies (REMS), approved by the FDA. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Drugs and biologics may be promoted only for the approved indications and in accordance with the provisions of the approved label. Further, manufacturers of drugs and biologics must continue to comply with cGMP requirements, which are extensive and require considerable time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Drug and biologic manufacturers and other entities involved in the manufacturing and distribution of approved drugs and biologics are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, GTP applicable to biologics, and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the drug. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory standards, and test each product batch or lot prior to its release.

The FDA may withdraw a product approval if compliance with regulatory standards is not maintained or if problems occur after the product reaches the market. Discovery of previously unknown problems with a product subsequent to its approval, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in restrictions on the product or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, warning letters, holds on clinical trials, product recalls or seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties.

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new

legislation, the FDA regulations and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our development efforts. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be.

Foreign Regulation

Pharmaceutical products are subject to regulations and product registration requirements in many foreign countries, including in the areas of product standards, packaging requirements, labeling requirements, import and export restrictions and tariff regulations, duties and tax requirements. The time required to obtain clearance required by foreign countries may be longer or shorter than that required for FDA clearance, and requirements for licensing a product in a foreign country may differ significantly from FDA requirements.

Pharmaceutical products may not be imported into, or manufactured or marketed in, the State of Israel absent drug registration. The three basic criteria for the registration of pharmaceuticals in Israel is quality, safety and efficacy of the pharmaceutical product and the Israeli Ministry of Health requires pharmaceutical companies to conform to international developments and standards. Regulatory requirements are constantly changing in accordance with scientific advances as well as social and ethical values.

The relevant legislation of the EU requires that medicinal products, including generic versions of previously approved products, and new strengths, dosage forms and formulations, of previously approved products, shall have a marketing authorization before they are placed on the market in the EU. Authorizations are granted after the assessment of quality, safety and efficacy by the respective health authorities. In order to obtain an authorization, an application must be made to the competent authority of the member state concerned or in a centralized procedure to the EMA. Besides various formal requirements, the application must contain the results of pharmaceutical (physico-chemical, biological or microbiological) tests, of preclinical (toxicological and pharmacological) tests as well as of clinical trials. All of these tests must have been conducted in accordance with relevant EU regulations and must allow the reviewer to evaluate the quality, safety and efficacy of the medicinal product.

Orphan drug designation in the EU is granted to medicinal products intended for the diagnosis, prevention and treatment of life-threatening diseases and very serious conditions that affect not more than five in 10,000 people in the EU. Orphan drug designation is generally given to medicinal products that treat conditions for which no current therapy exists or are expected to bring a significant benefit to patients over existing therapies. To obtain marketing approval of a drug under EU regulatory systems, marketing authorization applications may be submitted either under a centralized, decentralized or national procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all EU and EEA member states. The centralized procedure is compulsory for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, and products with a new active substance indicated for the treatment of certain diseases, and optional for those products that are highly innovative or for which a centralized process is in the interest of patients. Products and product candidates that have received or will receive orphan designation in the EU qualify for this centralized procedure under which each product’s marketing authorization application will be submitted to the EMA.

Third Party Payor Coverage and Reimbursement

Coverage and reimbursement status of any approved therapy carries uncertainty and risk for the market application holder. Commercialization of drug products in both the United States and foreign markets, our ability to commercialize our product and product candidates successfully, and the ability to attract commercialization partners, depends in significant part on the availability of adequate financial coverage and reimbursement from third party payors, including, in the United States, governmental payors such as Medicare, Medicaid and the Veterans Affairs Health programs, and private health insurers. Medicare is a federally funded program managed by the Centers for Medicare and Medicaid Services, or CMS, through local fiscal intermediaries and carriers that administer coverage and reimbursement for certain healthcare items and services furnished to the elderly and disabled. Medicaid is an insurance program for certain categories of patients whose income and assets fall below state defined levels and who are otherwise uninsured that is both federally and state funded and managed by each state. The federal government sets general guidelines for Medicaid and each state creates specific regulations that govern its individual program. Each payor has its own process and standards for determining whether it will cover and reimburse a procedure or particular product. Private payors often

rely on the lead of the governmental payors in rendering coverage and reimbursement determinations. Therefore, achieving favorable CMS coverage and reimbursement is usually a significant gating issue for successful introduction of a new product. The competitive position most drug products will depend, in part, upon the extent of coverage and adequate reimbursement for such products and for the procedures in which such products are used. Prices at which we, our commercialization partners or our customers seek reimbursement for our product candidates may be subject to challenge, reduction or denial by the government and other payors.

Possible legislation at the federal and state levels in the United States focused on cost containment and price transparency may impact our ability, or the ability of our commercialization partners, to sell our products and product candidates for maximum profitably. It appears likely that the pressure on pharmaceutical pricing will continue, especially under the Medicare program, which may also increase our regulatory burdens and operating costs. Moreover, additional changes could be made to governmental healthcare programs that could significantly impact the success of our product and product candidates.

Some third-party payors also require pre-approval of coverage for new or innovative devices, biologics or drug therapies before they will reimburse healthcare providers that use such therapies. While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, the announcement or adoption of these proposals could have a material adverse effect on our ability, or the ability of our commercialization partners, to obtain adequate prices for our product candidates and operate profitably.

Different pricing and reimbursement schemes exist in other countries. In the EU, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs and biologics, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.

Other Healthcare Laws and Compliance Requirements

In the United States, our activities and those of our commercialization partners are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare and Medicaid Services, other divisions of the U.S. Department of Health and Human Services (e.g., the Office of Inspector General), the U.S. Department of Justice and individual U.S. Attorney General offices within the Department of Justice, and state and local governments. These regulations include, among others:

●the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

●federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent;

●the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

●the federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics, and medical supplies to report to the Department of Health and Human Services

information related to physician payments and other transfers of value and physician ownership and investment interests;

●the FFDCA, which among other things, strictly regulates drug and biologic product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and

●the Foreign Corrupt Practices Act of 1977, or FCPA, prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad. The scope of the FCPA arguably includes interactions with certain healthcare professionals in many countries. Other countries have enacted similar anticorruption laws and/or regulations. Failure by our employees, agents, contractors, vendors, licensees, partners or collaborators to comply with the FCPA and other anticorruption laws and/or regulations could result in significant civil or criminal penalties.

●state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.

Compliance with Environmental, Health and Safety Laws

In addition to FDA regulations, we are also subject to evolving federal, state and local environmental, health and safety laws and regulations. Compliance with environmental, health and safety laws and regulations has not had a material effect on our capital expenditures. Compliance with environmental, health and safety laws and regulations in the future may require additional capital expenditures.

Israeli Government Programs

The following is a brief summary of the current principal Israeli tax laws applicable to us and Protalix Ltd., and of the Israeli Government programs from which Protalix Ltd. benefits. Some parts of this discussion are based on new tax legislation that has not been subject to judicial or administrative interpretation. Therefore, the views expressed in the discussion may not be accepted by the tax authorities in question. This summary is based on laws and regulations in effect as of the date hereof, and should not be construed as legal or professional tax advice and does not cover all possible tax considerations.

General Corporate Tax Structure in Israel

The income of Protalix Ltd., other than income from “Approved Enterprises,” is taxed in Israel at regular rates. Pursuant to the Economic Efficiency Law (Legislative Amendments for Implementing the Economic Policy for the 2017 and 2018 Budget Year), 2016, the corporate tax rate in 2018 and thereafter is 23%. Capital gains on the sale of assets are subject to capital gains tax according to the corporate tax rate in effect in the year which the assets are sold.

Law for the Encouragement of Capital Investments, 1959

The Law for the Encouragement of Capital Investments, 1959, as amended, or the Investment Law, provides certain incentives for capital investments in a production facility (or other eligible assets). Generally, an investment program that is implemented in accordance with the provisions of the Investment Law, referred to as an “Approved Enterprise,” is entitled to benefits. These benefits may include cash grants from the Israeli government and tax benefits, based upon, among other things, the location within Israel of the facility in which the investment is made and specific elections made by the grantee. In order to qualify for these incentives, an Approved Enterprise is required to comply with the requirements of the Investment Law, and Letter of approval received by Protalix Ltd.

Protalix Ltd. will continue to enjoy the tax benefits under the pre-revision provisions of the Investment Law. If any new benefits are granted to Protalix Ltd. in the future, Protalix Ltd. will be subject to the provisions of the amended

Investment Law with respect to these new benefits. Therefore, the following discussion is a summary of the Investment Law prior to its amendment as well as the relevant changes contained in the new legislation.

Under the Investment Law prior to its amendment, a company that wished to receive benefits had to receive approval from the Authority for the Investment and Development of the Industry and Economy, or the Investment Center. Each certificate of approval for an Approved Enterprise relates to a specific investment program in the Approved Enterprise, delineated both by the financial scope of the investment and by the physical characteristics of the facility or the asset, e.g., the equipment to be purchased and utilized pursuant to the program.

An Approved Enterprise may elect to forego any entitlement to the grants otherwise available under the Investment Law and, instead, participate in an alternative benefits program under which the undistributed income (after deductions and offsets) from the Approved Enterprise is exempt from corporate tax for a defined period of time. Under the alternative package of benefits, a company’s undistributed income derived from an Approved Enterprise will be exempt from corporate tax for a period of between two and 10 years from the first year of taxable income, depending upon the geographic location within Israel of the Approved Enterprise. Upon expiration of the exemption period, the Approved Enterprise is eligible for the reduced tax rates otherwise applicable under the Investment Law for any remainder of the otherwise applicable benefits period (up to an aggregate benefits period of either seven or 10 years, depending on the location of the company or its definition as a foreign investors’ company). If a company has more than one Approved Enterprise program or if only a portion of its capital investments are approved, its effective tax rate is the result of a weighted combination of the applicable rates. The tax benefits from any certificate of approval relate only to taxable profits attributable to the specific Approved Enterprise and are contingent upon meeting the criteria set out in the certificate of approval. Income derived from activity that is not integral to the activity of the Approved Enterprises (including capital gain) does not enjoy these tax benefits.

A company that has an Approved Enterprise program is eligible for further tax benefits, as an alternative to exemption, if it qualifies as a foreign investors’ company. A foreign investors’ company eligible for benefits is essentially a company in which more than 25% of the share capital (in terms of shares, rights to profit, voting and appointment of directors) is owned (measured by both share capital and combined share and loan capital) by non-Israeli residents. A company that qualifies as a foreign investors’ company and has an Approved Enterprise program is eligible for tax benefits for a 10-year benefit period and may enjoy a reduced corporate tax rate of 10% to 23%, depending on the amount of the company’s shares held by non-Israeli shareholders.

If a company that has an Approved Enterprise program is a wholly-owned subsidiary of another company, the percentage of foreign investments is determined based on the percentage of foreign investment in the parent company. The tax rates and related levels of foreign investments with respect to a foreign investor’s company that has an Approved Enterprise program are set forth in the following table:

Percent of Foreign Ownership

​ ​ ​

Rate of Reduced Tax

Over 25% but less than 49%

23%

49% or more but less than 74%

20%

74% or more but less than 90%

15%

90% or more

10%

Our original facility in Israel has been granted “Approved Enterprise” status, and it has elected to participate in the alternative benefits program. Under the terms of its Approved Enterprise program, the facility is located in a Zone A area and, therefore, the undistributed income from that Approved Enterprise will be tax exempt in Israel for a period of 10 years, commencing with the year in which taxable income is first generated from the relevant Approved Enterprise.

A company that has elected to participate in the alternative benefits program and that subsequently pays a dividend out of the income derived from the portion of its facilities that have been granted Approved Enterprise status during the tax exemption period will be subject to corporate tax in respect of the amount of dividend distributed at the rate that would have been applicable had the company not elected the alternative benefits program (generally 10% to 23%, depending on the extent to which non-Israeli shareholders hold such company’s shares). If the dividend is distributed within 12 years after the end of the benefits period (or, in the case of a foreign investor’s company, without time limitation), the dividend recipient is taxed at the reduced withholding tax rate of 20% applicable to dividends from approved enterprises, or at the

lower rate under an applicable tax treaty. After this period, the withholding tax rate is 25% to 30%, or at the lower rate under an applicable tax treaty. In the case of a company with a foreign investment level (as defined by the Investment Law) of 25% or more, the 12-year limitation on reduced withholding tax on dividends does not apply. The company must withhold this tax at its source, regardless of whether the dividend is converted into foreign currency.

The Investment Law also provides that an Approved Enterprise is entitled to accelerated depreciation on its property and equipment that are included in an approved investment program. This benefit is an incentive granted by the Israeli government regardless of whether the alternative benefits program is elected.

The benefits available to an Approved Enterprise are conditioned upon terms stipulated in the Investment Law and its regulations and the criteria set forth in the applicable certificate of approval. If Protalix Ltd. does not fulfill these conditions in whole or in part, the benefits can be canceled and Protalix Ltd. may be required to refund the benefits received, linked to the Israeli consumer price index with interest. In addition, if we increase our activities outside of Israel, for example, by future acquisitions, such increased activities generally may not be eligible for inclusion in Israeli tax benefit programs. We believe that Protalix Ltd. currently operates in compliance with all applicable conditions and criteria.

Amendment of the Law for the Encouragement of Capital Investments, 1959

In recent years, several amendments have been made to the Investments Law which have enabled new alternative benefit tracks, subject to certain conditions. The Investments Law was amended as part of the Economic Policy Law for the years 2011-2012 (amendment 68 to the Encouragement of Capital Investments Law), which was passed by the Israeli Knesset on December 29, 2010. The amendment sets alternative benefit tracks to those currently in effect under the provisions of the Investments Law. On December 29, 2016, Amendment 73 to the Investments Law, or the Investments Law Amendment, was published. This amendment sets new benefit tracks, inter alia, “Preferred Technological Enterprise” and “Special Preferred Technological Enterprise.” To date, we have elected not to have the Investments Law Amendment apply to our company.

Encouragement of Industrial Research, Development and Technology Innovation Law, 1984

To date, Protalix Ltd. has received grants from the Office of the Chief Scientist of the Israeli Department of Labor, or the OCS, under the Israeli Law for the Encouragement of Industrial Research, Development and Technology Innovation, 1984, and related regulations, or the Research Law. On January 1, 2016, the Israeli government established the National Authority for Technological Innovation, or NATI, which replaced many of the functions of the OCS. For purposes of clarity, references to NATI will include the OCS. NATI grants may be made available, from time to time, to finance a portion of Protalix Ltd.’s research and development expenditures in Israel. As of December 31, 2025, NATI approved grants in respect of Protalix Ltd.’s continuing operations totaling approximately $53.2 million (before interest, as described below), measured from inception. Protalix Ltd. is required to repay up to 100% of grants actually received (plus interest at the LIBOR rate applied to the grants received on or after January 1, 1999) to NATI through payments of royalties at a rate of 3% to 6% of the revenues generated from NATI-funded project, depending on the period in which revenues were generated. As of December 31, 2025, Protalix Ltd. either paid or accrued royalties payable of $20.8 million, and Protalix Ltd.’s contingent liability to NATI with respect to grants received was approximately $32.4 million.

Under the Research Law, recipients of grants from NATI are prohibited from manufacturing products developed using these grants outside of the State of Israel without special approvals, although the Research Law does enable companies to seek prior approval for conducting manufacturing activities outside of Israel without being subject to increased royalties. If Protalix Ltd. receives approval to manufacture the products developed with government grants outside of Israel, it will be required to pay an increased total amount of royalties (possibly up to 150% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside of Israel, as well as at a possibly increased royalty rate.

Additionally, under the Research Law, Protalix Ltd. is prohibited from transferring NATI-financed technologies and related intellectual property rights outside of the State of Israel, except under limited circumstances and only with the approval of NATI Council or the Research Committee. Protalix Ltd. may not receive the required approvals for any

proposed transfer and, if received, Protalix Ltd. may be required to pay NATI a portion of the consideration that it receives upon any sale of such technology by a non-Israeli entity. The scope of the support received, the royalties that Protalix Ltd. has already paid to NATI, the amount of time that has elapsed between the date on which the know-how was transferred and the date on which NATI grants were received and the sale price and the form of transaction will be taken into account in order to calculate the amount of the payment to NATI. The payments to NATI may result in up to 600% of the grant amounts plus interest. Approval of the transfer of technology to residents of the State of Israel is required, and may be granted in specific circumstances only if the recipient abides by the provisions of applicable laws, including the restrictions on the transfer of know-how and the obligation to pay royalties. No assurance can be made that approval of any such transfer, if requested, will be granted.

Under the Research Law and the regulations promulgated thereunder, the NATI Council may allow the transfer outside of Israel of know-how derived from an approved program and the related manufacturing rights in limited circumstances which are currently as follows:

●in the event of a sale of know-how itself to a non-affiliated third party, provided that upon such sale the owner of the know-how pays to NATI an amount, in cash, as set forth in the Research Law (and the regulations promulgated thereunder). In addition, the amendment provides that if the purchaser of the know-how gives the selling Israeli company the right to exploit the know-how by way of an exclusive, irrevocable and unlimited license, the research committee may approve such transfer in special cases without requiring a cash payment.

●in the event of a sale of a company which is the owner of know-how, pursuant to which the company ceases to be an Israeli company, provided that upon such sale, the owner of the know-how makes a cash payment to NATI as set forth in the Research Law (and the regulations promulgated thereunder).

●in the event of an exchange of know-how such that in exchange for the transfer of know-how outside of Israel, the recipient of the know-how transfers other know-how to the company in Israel in a manner in which NATI is convinced that the Israeli economy realizes a greater, overall benefit from the exchange of know-how.

The Research Committee may, in special cases, approve the transfer of manufacture or of manufacturing rights of a product developed within the framework of the approved program or which results therefrom, outside of Israel.

The State of Israel does not own intellectual property rights in technology developed with NATI funding and there is no restriction on the export of products manufactured using technology developed with NATI funding. The technology is, however, subject to transfer of technology and manufacturing rights restrictions as described above. For a description of such restrictions, please see “Risk Factors—Risks Relating to Our Operations in Israel.” NATI approval is not required for the export of any products resulting from the research or development or for the licensing of any technology in the ordinary course of business.

Law for the Encouragement of Industry (Taxes), 1969

We believe that Protalix Ltd. currently qualifies as an “Industrial Company” within the meaning of the Law for the Encouragement of Industry (Taxes), 1969, or the Industry Encouragement Law. The Industry Encouragement Law defines “Industrial Company” as a company resident in Israel and incorporated in Israel, that derives 90% or more of its income in any tax year (other than specified kinds of passive income such as capital gains, interest and dividends) from an “Industrial Enterprise” operating in Israel (including Judea & Samaria territories and the Gaza strip), that it owns. An “Industrial Enterprise” is defined as an enterprise whose major activity in a given tax year is industrial production.

The following corporate tax benefits, among others, are available to Industrial Companies:

●amortization of the cost of purchased know-how and patents over an eight-year period for tax purposes;

●accelerated depreciation rates on equipment and buildings;

●under specified conditions, an election to file consolidated tax returns with other related Israeli Industrial Companies; and

●expenses related to a public offering are deductible in equal amounts over three years.

Eligibility for the benefits under the Industry Encouragement Law is not subject to receipt of prior approval from any governmental authority. It is possible that Protalix Ltd. may fail to qualify or may not continue to qualify as an “Industrial Company” or that the benefits described above will not be available in the future.

Tax Benefits for Research and Development

Under specified conditions, Israeli tax laws allow a tax deduction by a company for research and development expenditures, including capital expenditures, for the year in which such expenditures are incurred. These expenditures must relate to scientific research and development projects and must be approved by NATI. Furthermore, the research and development projects must be for the promotion of the company and carried out by or on behalf of the company seeking such tax deduction. However, the amount of such deductible expenditures is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. Research and development expenses which were not approved shall be deductible over a period of three years.

Employees

As of December 31, 2025, we had 226 employees, all of whom are full time employees, and of which 25 have a Ph.D. or an M.D. in their respective scientific fields. We believe that our relations with our employees are good. We believe that our success will greatly depend on our ability to identify, attract and retain capable employees. The Israeli Ministry of Labor and Welfare is authorized to make certain industry-wide collective bargaining agreements, or Expansion Orders, that apply to types of industries or employees including ours. These agreements affect matters such as cost of living adjustments to salaries, length of working hours and week, recuperation, travel expenses, and pension rights. Otherwise, our employees are not represented by a labor union or represented under a collective bargaining agreement. See “Risk Factors—We depend upon key employees and consultants in a competitive market for skilled personnel. If we are unable to attract and retain key personnel, it could adversely affect our ability to develop and market our products.”

Set forth below is a chart showing the number of people we employed at the times indicated:

As of December 31,

Total Employees

Research and Development

General and Administrative

Operations

Company Background

We were originally incorporated in the State of Florida in April 1992, and reincorporated in the State of Delaware in March 2016. Protalix Ltd., our wholly-owned subsidiary and sole operating unit, is an Israeli company and was incorporated in Israel in 1993.

ProCellEx® is our registered trademark. Each of the other trademarks, trade names or service marks appearing in this Annual Report on Form 10-K belongs to its respective holder.

Available Information

Our main corporate website address is http://www.protalix.com. We make available on our website, free of charge, our Commission filings, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to these reports, as soon as reasonably practicable after we electronically file these documents with, or furnish them to, the Commission. The Commission maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission at

www.sec.gov. Additionally, from time to time, we provide notifications of material news including press releases and conferences on our website. Webcasts of presentations made by our company at certain conferences may also be available from time to time on our website, to the extent the webcasts are available. The content of our website is not intended to be incorporated by reference into this report or in any other report or document we file and any references to these websites are intended to be inactive textual references only. Interested persons may sign up on our website to automatically receive e-mail alerts when we post financial information and issue press releases, and to receive information about upcoming events.

Our website also includes printable versions of our Code of Business Conduct and Ethics and the charters for each of the Audit, Compensation and Nominating Committees of our Board of Directors. Each of these documents is also available in print, free of charge, to any stockholder who requests a copy by addressing a request to:

Protalix BioTherapeutics, Inc.

2 Snunit Street, Science Park

Carmiel 2161401, Israel

Attn: Gilad Mamlok, Sr. Vice President and Chief Financial Officer