NOTE 8 – INTANGIBLE ASSETS

The value in use of intellectual property has been calculated with the assistance of an external appraiser, based on assumptions and estimates of the Company. The value in use of the assets was estimated by using the decision-tree approach to valuing research products. This approach incorporates the option of abandonment at each development stage. The traditional Discounted Cash Flows (DCF) model is implemented at the final node of the decision tree. The DCF analysis estimates the future cash flows the Company expects to derive from the asset, and incorporates expectations about possible variations in the amount or timing of those future cash flows, and the uncertainty inherent in the assets. As of December 31, 2022, the value in use of the intangible assets according to the impairment testing exceeded its book value. Therefore, no impairment was recognized.

Intellectual property includes the following intangible assets acquired by the Company:

$6.7 million recorded as a result of the acquisition of Agalimmune, primarily related to its main drug candidate, AGI-134 (see Note 1a).

$15.0 million recorded as a result of an amendment to the in-licensing agreement with Biokine Therapeutics Ltd. ("Biokine") that reduced, for that consideration, future payments to be made by the Company on sublicense receipts (as defined in the license agreement) from 40% to 20%.

These assets are used for the Company's research and development activities and are not amortized.

Set forth below are the composition of intangible assets and the related accumulated depreciation, grouped by major classifications:

	Cost								Accumulated depreciation and impairment
	Balance at		Additions		Deletions		Balance at		Balance at		Additions		Deletions		Balance at		Net book value
	beginning		during		during		end of		beginning		during		during		end of		December 31,
	of year		year		year		year		of year		year		year		year		2021		2022
	in USD thousands								in USD thousands								in USD thousands
Composition in 2022
Intellectual property		21,792		-		-		21,792		96		-		-		96		21,696		21,696
Computer software		616		185		-		801		608		4		-		612		8		189
		22,408		185		-		22,593		704		4		-		708		21,704		21,885