6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of November 2013

Commission File No.:001-35773

REDHILL BIOPHARMA LTD.

(Translation of registrant’s name into English)

21 Ha'arba'a Street, Tel Aviv, 64739, Israel

 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F [x]  Form 40-F [  ]

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

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

Attached hereto and incorporated by reference herein are the following:

Exhibit 1: Registrant's press release dated November 12, 2013, entitled: "RedHill Biopharma Reports Results for the Third Quarter of 2013”.

Exhibit 2: Registrant’s interim unaudited financial information as of September 30, 2013 and for the nine months then ended.

This Form 6-K is incorporated by reference into the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on May 2, 2013 (Registration No. 333-188286).

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

	REDHILL BIOPHARMA LTD. (the "Registrant")
Date: November 12, 2013	By: /s/ Dror Ben-Asher
	Dror Ben-Asher Chief Executive Officer

EX-1

EXHIBIT 1

RedHill Biopharma Reports Results for the Third Quarter of 2013

Key highlights include:

• Commencement of the MAP US study – a Phase III clinical study in North America and Israel with RHB-104 for the treatment of Crohn's disease
• Commencement of the ERADICATE Hp study – a Phase III clinical study in the U.S. with RHB-105 for the treatment of H. pylori bacterial infection
• Positive results in two supplementary studies conducted with RHB-102, once daily oncology support anti-emetic, with NDA submission planned for the first quarter of 2014
• Company shareholders, board members and officers exercised warrants and options for a total amount of approximately $2.2 million since the beginning of the year

TEL-AVIV, Israel, Nov. 12, 2013 (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd. (Nasdaq:RDHL) (TASE:RDHL) (the "Company" or "RedHill"), an emerging Israeli biopharmaceutical company focused primarily on the development and acquisition of late clinical-stage, proprietary formulations and combinations of existing drugs, today reported financial results for the third quarter ended September 30, 2013.

The Company achieved significant milestones in the third quarter of 2013, including:

(i) Commencement of the MAP US study – a Phase III clinical study in North America and Israel, designed to evaluate the safety and efficacy of fixed-dose RHB-104 in patients with moderately to severely active Crohn's disease.

(ii) Commencement of the ERADICATE Hp study – a Phase III clinical study in the U.S. designed to evaluate the safety and efficacy of RHB-105, proprietary fixed-dose combination therapy as a first-line treatment for confirmed Helicobacter pylori (H. pylori) bacterial infection.

(iii) Positive results in two supplementary pharmacokinetic (PK) studies conducted with RHB-102, once daily oncology support anti-emetic, with NDA submission planned for the first quarter of 2014.

(iv) Positive results in a pre-clinical study with RHB-104 for the treatment of rheumatoid arthritis (RA) and plans to conduct a Phase IIa proof of concept clinical trial to assess the efficacy and safety of RHB-104 in patients suffering from RA.

Financial highlights for the third quarter of 2013:

Research and Development Expenses, net for the quarter ended September 30, 2013 were approximately $2.2 million, an increase of $0.2 million (approximately 10%) compared to $2.0 million for the quarter ended June 30, 2013. Research and Development Expenses, net for the nine months ended September 30, 2013 were approximately $5.5 million, an increase of $0.3 million (approximately 6%) compared to $5.2 million in the nine months ended September 30, 2012. The increase in both periods was mainly due to expenses related to preparations for the Phase III clinical trials with RHB-104 (Crohn's) and RHB-105 (H. pylori).

General and Administrative Expenses for each of the quarters ended September 30, 2013 and June 30, 2013 were approximately $0.5 million. General and Administrative Expenses for the nine months ended September 30, 2013 were approximately $1.8 million, an increase of $0.1 million (approximately 6%) compared to $1.7 million for the nine months ended September 30, 2012. The increase was mainly attributed to expenses associated with the requirements of being a dual-listed company on both TASE and NASDAQ.

Operating Loss for the quarter ended September 30, 2013 was approximately $2.7 million, an increase of $0.2 million (approximately 8%) compared to $2.5 million for the quarter ended June 30, 2013. Operating loss for the nine months ended September 30, 2013 was approximately $7.3 million, an increase of $0.4 million (approximately 6%) compared to $6.9 million in the nine months ended September 30, 2012. The increase in both periods was mainly due to an increase in Research and Development Expenses, net.

Net Cash Used in Operating Activities for each of the quarters ended September 30, 2013 and June 30, 2013 was approximately $2.1 million. Net cash used in operating activities for the nine months ended September 30, 2013 was $6.0 million, an increase of $0.8 million (approximately 15%) compared to $5.2 million in the nine months ended September 30, 2012. The increase was mainly due to an increase in Research and Development Expenses, net.

Net Cash Used from Investment Activities for the quarter ended September 30, 2013 was approximately $0.2 million, compared to net cash resulting from investment activities of $0.5 million for the quarter ended June 30, 2013, a decrease of $0.7 million (approximately 140%). The decrease was mainly due to a $0.2 million development milestone payment for RHB-103 in the quarter ended September 30, 2013 and due to proceeds from the sale of tradable securities in the quarter ended June 30, 2013. Net cash resulting from investment activities in the nine months ended September 30, 2013 was $0.9 million, an increase of $0.5 million (approximately 125%) compared to net cash of $0.4 million resulting from investment activities in the nine months ended September 30, 2012. The increase was mainly due to the conversion of short-term deposits into cash and cash equivalents.

Cash Resulting from Financing Activities for the quarter ended September 30, 2013 was approximately $1.3 million, an increase of $1.2 million (approximately 1,200%) compared to $0.1 million for the quarter ended June 30, 2013. The increase was mainly due to the exercise of warrants by investors from the 2010 financing. Cash resulting from financing activities for the nine months ended September 30, 2013 was $1.4 million, an increase of $1.1 million (approximately 370%) compared to net cash of $0.3 million in the nine months ended September 30, 2012. The increase was mainly due to exercise of warrants by investors from the 2010 financing.

Cash Balance¹ as of September 30, 2013 was approximately $13.7 million, a decrease of $1.0 million (approximately 7%) compared to $14.7 million at the end of the previous quarter ended June 30, 2013 and a decrease of $4.7 million (approximately 25%) compared to $18.5 million as of December 31, 2012.

Ori Shilo, Deputy CEO Finance and Operations said: "Activities in the third quarter of 2013 were mainly focused on preparations for the Phase III clinical trials with RHB-104 for Crohn's and RHB-105 for H. pylori infection which commenced in September and October 2013 respectively. Our cash position remains strong with approximately $14 million in cash at the end of the quarter and no financial debt. We are very pleased with the vote of confidence by our shareholders, including board members and officers, who elected to exercise warrants and options since the beginning of the year for a total amount of approximately $2.2 million." Mr. Shilo added: "Looking ahead, we are excited by the prospective milestones for 2014, including the PDUFA date for our migraine drug RHB-103, expected in February 3, 2013, results from the Phase III study with RHB-105 for H. pylori bacterial infection, the planned NDA submission with RHB-102 for prevention of nausea and vomiting in cancer patients and results from the Phase IIa study with RHB-104 for multiple sclerosis."

Key operational highlights for the third quarter ended September 30, 2013:

1. On October 30, 2013, the Company announced that it had commenced the patient screening process for the ERADICATE Hp study – a Phase III clinical study in the U.S. designed to evaluate the safety and efficacy of RHB-105, a proprietary fixed-dose combination therapy of two antibiotics and a proton pump inhibitor (PPI), as a first-line treatment for confirmed H. pylori bacterial infection. The randomized, double-blind, placebo-controlled Phase III study is expected to enroll 90 subjects in up to ten clinical sites in the U.S. The primary endpoint of the study will be eradication of H. pylori infection 28 to 56 days after completion of treatment and data is expected by the second half of 2014.

2. On October 15, 2013, the Company announced the presentation of a poster at the ACG (American College of Gastroenterology) 2013 Annual Scientific Meeting and the pending publication in the American Journal of Gastroenterology on positive results from an independent, single-center, retrospective study with pediatric patients suffering from Crohn's disease. The study was conducted by Professor Thomas Borody, a member of RedHill's advisory board, with an earlier formulation of RedHill's RHB-104 anti-MAP (Mycobacterium avium subspecies paratuberculosis) combination therapy, using the same active ingredients in doses adjusted for pediatric usage. The results of the study demonstrated a clinical remission rate of 80% in 10 pediatric Crohn's disease patients, with a median duration of remission of 16 months.

3. On October 8, 2013, the Company announced positive results in two supplementary pharmacokinetic (PK) studies conducted with RHB-102, a patent-protected, extended-release (24 hours) oral formulation of ondansetron, the active ingredient in GlaxoSmithKline's Zofran® immediate release tablets for the prevention of radiotherapy-induced nausea and vomiting (RINV) and chemotherapy-induced nausea and vomiting (CINV). The supplementary PK program was initiated by the Company in July 2013 to support the planned submission of a New Drug Application (NDA). Following the successful PK program, the Company is seeking a pre-NDA meeting with the U.S. Food and Drug Administration (FDA) to discuss the clinical aspects of the planned NDA. Subject to the results of the pre-NDA meeting, completion of CMC (Chemistry, Manufacturing and Control) modules and the required regulatory process, the Company plans to submit an NDA for RHB-102 in the first quarter of 2014, seeking U.S. marketing approval.

4. On October 1, 2013, the Company announced that it had commenced the patient screening process in the MAP US study, a Phase III clinical study designed to evaluate the safety and efficacy of fixed-dose RHB-104 in patients with moderately to severely active Crohn's disease. The randomized, double-blind, placebo-controlled Phase III clinical study is expected to enroll 240 subjects with moderately to severely active Crohn's disease in approximately 50 clinical sites in the U.S., Canada and Israel. Subjects will be treated for a period of 52 weeks and will be assessed for remission at 26 weeks. The primary endpoint for the study will be the state of remission at week 26 in subjects randomized to receive RHB-104, compared to subjects randomized to receive placebo. An independent data and safety monitoring board (DSMB) will review safety intermittently throughout the study and will perform a futility analysis when half the subjects complete the first 26 weeks of blinded treatment.

5. On September 10, 2013, the Company announced positive results from a pre-clinical study with RHB-104 for the treatment of systemic lupus erythematosus (SLE), a systemic autoimmune disease causing inflammation and damage to tissues in various parts of the body. The pre-clinical study was designed to evaluate the potential therapeutic effects of RHB-104 on disease development in an experimental SLE model when administered orally. The results from the pre-clinical study demonstrated that disease severity and overall disease development were reduced in the RHB-104 arm, indicating that RHB-104 was efficacious in reducing the development of SLE in this study. In light of the positive results, the Company is currently assessing the next steps in the clinical development program, including a possible Phase IIa clinical study.

6. On August 20, 2013, the Company announced that it had recently concluded Scientific Advice Meetings with the UK Medicines and Healthcare Products Regulatory Agency (MHRA) and the Swedish Medical Products Agency (MPA) regarding the regulatory path towards a Phase III clinical study in Europe with RHB-104. In light of the positive feedback received from the UK MHRA and the Swedish MPA, the Company believes there is a clear regulatory path towards a Phase III clinical study in Europe with RHB-104 for the treatment of Crohn's disease (the "MAP Europe" study). The Phase III double-blind placebo-controlled MAP Europe study is expected to enroll 360 subjects with moderately active Crohn's disease randomized in up to 60 sites in six European countries and is planned to commence in the first half of 2014, subject to regulatory approvals.

7. On July 30, 2013, the Company announced positive results from a pre-clinical study with RHB-104 for the treatment of rheumatoid arthritis (RA), a systemic chronic inflammatory disease considered to be one of the most prevalent immune-mediated inflammatory diseases. The pre-clinical study was designed to evaluate the potential therapeutic effects of RHB-104 using the Collagen-Induced Arthritis (CIA) pre-clinical model, the most commonly studied autoimmune model of RA. The results from the pre-clinical study demonstrated that disease severity was significantly reduced in the RHB-104 arm, indicating that RHB-104 was effective in treating CIA in the study. In light of these positive results, the Company plans to conduct a phase IIa, proof of concept, clinical study to assess the efficacy and safety of RHB-104 in patients suffering from RA.

About RedHill Biopharma Ltd.:

RedHill Biopharma Ltd. (Nasdaq:RDHL) (TASE:RDHL) is an emerging Israeli biopharmaceutical company focused primarily on the development and acquisition of late clinical-stage, proprietary formulations and combinations of existing drugs. The Company's current product pipeline includes: (i) RHB-101 - a once-daily formulation of a leading congestive heart failure and high blood pressure drug, with a planned NDA submission subject to further CMC and PK work and a planned Marketing Authorization Application (MAA) in Europe subject to further CMC work, (ii) RHB-102 - a once-daily formulation of a leading chemotherapy and radiotherapy-induced nausea and vomiting prevention drug, planned for U.S. NDA submission in the first quarter of 2014, (iii) RHB-103 - an oral thin film formulation of a leading drug for the treatment of acute migraines, with a U.S. NDA accepted for review by the FDA in June 2013 and a PDUFA date of February 3, 2014, (iv) RHB-104 - a combination antibiotic therapy for the treatment of (a) Crohn's disease, with a first Phase III trial currently underway, (b) Multiple sclerosis (MS), with a Phase IIa proof of concept trial currently underway, (c) rheumatoid arthritis (RA), with plans for a Phase IIa proof of concept trial, and (d) systemic lupus erythematosus (v) RHB-105 - a combination therapy for Helicobacter pylori infection, currently underway, and (vi) RHB-106 - an encapsulated formulation for bowel preparation (laxative) ahead of colonoscopy and other GI procedures. For more information please visit: www.redhillbio.com.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and the Company's current and best understanding of the regulatory status and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) the initiation, timing, progress and results of the Company's pre-clinical studies, clinical trials, and other therapeutic candidate development efforts; (ii) the Company's ability to advance its therapeutic candidates into clinical trials or to successfully complete its pre-clinical studies or clinical trials; (iii) the extent and number of additional studies that the Company may be required to conduct and the Company's receipt of regulatory approvals for its therapeutic candidates, and the timing of other regulatory filings and approvals; (iv) the clinical development, commercialization, and market acceptance of the Company's therapeutic candidates; (v) the Company's ability to establish and maintain corporate collaborations; (vi) the interpretation of the properties and characteristics of the Company's therapeutic candidates and of the results obtained with its therapeutic candidates in pre-clinical studies or clinical trials; (vii) the implementation of the Company's business model, strategic plans for its business and therapeutic candidates; (viii) the scope of protection the Company is able to establish and maintain for intellectual property rights covering its therapeutic candidates and its ability to operate its business without infringing the intellectual property rights of others; (ix) parties from whom the Company licenses its intellectual property defaulting in their obligations to the Company under their respective licensing agreements; (x) estimates of the Company's expenses, future revenues capital requirements and the Company's needs for additional financing; (xi) competitive companies, technologies and the Company's industry; and (xii) statements as to the impact of the political and security situation in Israel on the Company's business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on From 20-F filed with the SEC on February 19, 2013, and its Reports on Form 6-K. Investors and security holders are urged to read these documents free of charge on the SEC's web site at http://www.sec.gov. All forward-looking statements included in this Press Release are made only as of the date of this Press Release. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or other factors.

¹ Including cash, bank deposits and short-term investments.

REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
	Three months ended September 30		Nine months ended September 30
	2013	2012	2013	2012
	U.S. dollars in thousands
REVENUE	3	3	11	12
RESEARCH AND DEVELOPMENT EXPENSES, NET, see note 6	(2,207)	(1,379)	(5,535)	(5,207)
GENERAL AND ADMINISTRATIVE EXPENSES	(545)	(550)	(1,768)	(1,730)
OPERATING LOSS	(2,749)	(1,926)	(7,292)	(6,925)
FINANCIAL INCOME	53	57	113	145
FINANCIAL EXPENSES	(3)	(98)	(9)	(194)
FINANCIAL INCOME (EXPENSES), NET	50	(41)	104	(49)
LOSS AND COMPREHENSIVE LOSS	(2,699)	(1,967)	(7,188)	(6,974)
LOSS PER ORDINARY SHARE, basic and diluted (U.S. dollars)	0.04	0.04	0.12	0.13
WEIGHTED AVERAGE OF ORDINARY SHARES (in thousands)	62,637	52,745	61,800	52,462

REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
	September 30 2013	December 31 2012
	U.S. dollars in thousands
CURRENT ASSETS:
Cash and cash equivalents	13,165	16,814
Bank deposits	302	486
Financial assets at fair value through profit or loss	239	1,065
Prepaid expenses and receivables	778	198
	14,484	18,563
NON-CURRENT ASSETS:
Restricted bank deposit	79	75
Fixed assets	107	113
Intangible assets	1,545	1,345
	1,731	1,533
Total assets	16,215	20,096
CURRENT LIABILITIES:
Accounts payable and accrued expenses	1,924	1,078
EQUITY:
Ordinary shares	171	143
Ordinary shares to be issued	-	8,020
Additional paid-in capital	41,679	31,469
Warrants	2,499	3,273
Accumulated deficit	(30,058)	(23,887)
Total equity	14,291	19,018
Total liabilities and equity	16,215	20,096

REDHILL BIOPHARMA LTD.
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine months ended September 30		Three months ended September 30
	2013	2012	2013	2012
	U.S. dollars in thousands
CASH FLOW FROM OPERATING ACTIVITIES:
Loss	(7,188)	(6,974)	(2,699)	(1,967)
Adjustments in respect of income and expenses not involving cash flow:
Share-based compensation to employees and service providers	1,017	1,363	463	344
Depreciation	18	15	7	4
Fair value gains on financial assets at fair value through profit or loss	(50)	2	(6)	(18)
Revaluation of bank deposits	(13)	(31)	(15)	3
Accretion of royalty obligations to investors	-	129	-	67
Exchange differences relating to cash and cash equivalents	(32)	(28)	(27)	(18)
	940	1,450	422	382
Changes in assets and liability items:
Decrease (increase) in prepaid expenses and receivables	(580)	(31)	(192)	115
Increase in accounts payable and accrued expenses	846	306	363	7
	266	275	171	122
Net cash used in operating activities	(5,982)	(5,249)	(2,106)	(1,463)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(12)	(5)	(3)	-
Purchase of intangible assets	(200)	(100)	(200)	-
Change in investment in bank deposits	193	529	-	5,996
Purchase of financial assets at fair value through profit or loss	-	(1,032)	-	(927)
Proceeds from sale of financial assets at fair value through profit or loss	876	1,030	-	925
Net cash resulting in investing activities	857	422	(203)	5,994
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares and warrants	100	-	-	-
Exercise of warrants and options into ordinary shares	1,344	302	1,271	275
Net cash provided by financing activities	1,444	302	1,271	275
	(3,681)	(4,525)	(1,038)	4,806
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS	32	28	27	18
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	16,814	14,070	14,176	4,749
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD	13,165	9,573	13,165	9,573
Supplementary information on interest received in cash	25	50	10	4
The accompanying notes are an integral part of these condensed financial statements.

CONTACT: Company contact:
         Adi Frish
         Senior VP Business Development & Licensing
         RedHill Biopharma
         +972-54-6543-112
         adi@redhillbio.com

         PR contact (U.S.):
         Lauren Glaser
         Vice President
         The Trout Group
         +1-646-378-2972
         lglaser@troutgroup.com

EX-2

EXHIBIT 2

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM FINANCIAL INFORMATION

(UNAUDITED)

SEPTEMBER 30, 2013

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM FINANCIAL INFORMATION

(UNAUDITED)

SEPTEMBER 30, 2013

TABLE OF CONTENTS

	Page
UNAUDITED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 – IN U.S. DOLLARS:
Condensed interim statements of comprehensive loss	2
Condensed interim statements of financial position	3
Condensed interim statements of changes in equity	4-5
Condensed interim statements of cash flows	6
Notes to the condensed interim financial statements	7-10

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three months ended September 30						Nine months ended September 30
	2013			2012			2013			2012
	U.S. dollars in thousands
REVENUE		3			3			11			12
RESEARCH AND DEVELOPMENT EXPENSES, NET, see note 6		(2,207	)		(1,379	)		(5,535	)		(5,207	)
GENERAL AND ADMINISTRATIVE EXPENSES		(545	)		(550	)		(1,768	)		(1,730	)
OPERATING LOSS		(2,749	)		(1,926	)		(7,292	)		(6,925	)
FINANCIAL INCOME		53			57			113			145
FINANCIAL EXPENSES		(3	)		(98	)		(9	)		(194	)
FINANCIAL INCOME (EXPENSES), NET		50			(41	)		104			(49	)
LOSS AND COMPREHENSIVE LOSS		(2,699	)		(1,967	)		(7,188	)		(6,974	)
LOSS PER ORDINARY SHARE, basic and diluted (U.S. dollars)		0.04			0.04			0.12			0.13
WEIGHTED AVERAGE OF ORDINARY SHARES (in thousands)		62,637			52,745			61,800			52,462

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

2

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

(Unaudited)

	September 30			December 31
	2013			2012
	U.S. dollars in thousands
CURRENT ASSETS:
Cash and cash equivalents		13,165			16,814
Bank deposits		302			486
Financial assets at fair value through profit or loss		239			1,065
Prepaid expenses and receivables		778			198
		14,484			18,563
NON-CURRENT ASSETS:
Restricted bank deposit		79			75
Fixed assets		107			113
Intangible assets		1,545			1,345
		1,731			1,533
Total assets		16,215			20,096
CURRENT LIABILITIES:
Accounts payable and accrued expenses		1,924			1,078
EQUITY:
Ordinary shares		171			143
Ordinary shares to be issued		-			8,020
Additional paid-in capital		41,679			31,469
Warrants		2,499			3,273
Accumulated deficit		(30,058	)		(23,887	)
Total equity		14,291			19,018
Total liabilities and equity		16,215			20,096

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

3

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

	Ordinary shares		Ordinary shares to be issued			Additional paid-in capital		Warrants			Accumulated deficit			Total equity
	U.S. dollars in thousands
BALANCE AT JANUARY 1, 2013		143		8,020			31,469		3,273			(23,887	)		19,018
CHANGES IN THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2013:
Share-based compensation to employees and service providers		-		-			-		-			1,017			1,017
Issuance of ordinary shares and warrants		17		(5,661	)		5,735		9			-			100
Settlement of the royalty obligations		7		(2,359	)		2,352		-			-			-
Exercise of warrants and options into ordinary shares, net		4		-			2,052		(712	)		-			1,344
Warrants expiration		-		-			71		(71	)		-			-
Comprehensive loss		-		-			-		-			(7,188	)		(7,188	)
BALANCE AT SEPTEMBER 30, 2013		171		-			41,679		2,499			(30,058	)		14,291
BALANCE AT JANUARY 1, 2012		142		-			31,168		2,686			(15,209	)		18,787
CHANGES IN THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012:
Exercise of warrants into ordinary shares		1		-			301		-			-			302
Share-based compensation to employees and service providers		-		-			-		-			1,363			1,363
Comprehensive loss		-		-			-		-			(6,974	)		(6,974	)
BALANCE AT SEPTEMBER 30, 2012		143		-			31,469		2,686			(20,820	)		13,478

4

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (continued)

(Unaudited)

	Ordinary shares		Ordinary shares to be issued		Additional paid-in capital		Warrants			Accumulated deficit			Total equity
	U.S. dollars in thousands
BALANCE AT JULY 1, 2013		167		-		39,679		3,232			(27,822	)		15,256
CHANGES IN THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2013:
Share-based compensation to employees and service providers		-		-		-		-			463			463
Exercise of warrants and options into ordinary shares, net		4		-		1,929		(662	)		-			1,271
Warrants expiration		-		-		71		(71	)		-			-
Comprehensive loss		-		-		-		-			(2,699	)		(2,699	)
BALANCE AT SEPTEMBER 30, 2013		171		-		41,679		2,499			(30,058	)		14,291
BALANCE AT JULY 1, 2012		142		-		31,195		2,686			(19,197	)		14,826
CHANGES IN THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2012:
Exercise of warrants into ordinary shares		1		-		274		-			-			275
Share-based compensation to employees and service providers		-		-		-		-			344			344
Comprehensive loss		-		-		-		-			(1,967	)		(1,967	)
BALANCE AT SEPTEMBER 30, 2012		143		-		31,469		2,686			(20,820	)		13,478

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

5

REDHILL BIOPHARMA LTD.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30						Three months ended September 30
	2013			2012			2013			2012
	U.S. dollars in thousands
CASH FLOW FROM OPERATING ACTIVITIES:
Loss		(7,188	)		(6,974	)		(2,699	)		(1,967	)
Adjustments in respect of income and expenses notinvolving cash flow:
Share-based compensation to employees and service providers		1,017			1,363			463			344
Depreciation		18			15			7			4
Fair value gains on financial assets at fair value through profit or loss		(50	)		2			(6	)		(18	)
Revaluation of bank deposits		(13	)		(31	)		(15	)		3
Accretion of royalty obligations to investors		-			129			-			67
Exchange differences relating to cash and cash equivalents		(32	)		(28	)		(27	)		(18	)
		940			1,450			422			382
Changes in assets and liability items:
Decrease (increase) in prepaid expenses and  receivables		(580	)		(31	)		(192	)		115
Increase in accounts payable and accrued expenses		846			306			363			7
		266			275			171			122
Net cash used in operating activities		(5,982	)		(5,249	)		(2,106	)		(1,463	)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(12	)		(5	)		(3	)		-
Purchase of intangible assets		(200	)		(100	)		(200	)		-
Change in investment in bank deposits		193			529			-			5,996
Purchase of financial assets at fair value through profit or loss		-			(1,032	)		-			(927	)
Proceeds from sale of financial assets at fair value through profit or loss		876			1,030			-			925
Net cash resulting in investing activities		857			422			(203	)		5,994
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares and warrants		100			-			-			-
Exercise of warrants and options into ordinary shares		1,344			302			1,271			275
Net cash provided by financing activities		1,444			302			1,271			275
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(3,681	)		(4,525	)		(1,038	)		4,806
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS		32			28			27			18
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		16,814			14,070			14,176			4,749
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD		13,165			9,573			13,165			9,573
Supplementary information on interest received in cash		25			50			10			4

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

6

REDHILL BIOPHARMA LTD.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - GENERAL:

a.    General

RedHill Biopharma Ltd. (the "Company") was incorporated in Israel on August 3, 2009 and is active in the pharmaceutical industry. The Company is focused primarily on the development and acquisition of therapeutic candidates acquired through asset purchases or in-licensing transactions. In particular, the Company acquires or in-licenses and develops patent-protected new formulations and combinations of existing drugs in advanced stages of development with the objective of obtaining marketing approvals for these therapeutic candidates. Additionally, the Company's strategy is to commercialize the therapeutic candidates mainly through cooperation with pharmaceutical companies.

In February 2011, the Company listed its securities on the Tel-Aviv Stock Exchange (TASE) and such securities are tradable on the TASE since that time. In December 2012, the Company also listed American Depositary Shares (“ADSs”) on the NASDAQ Capital Market (NASDAQ) and such ADSs are tradable on the NASDAQ since that time.

The Company's registered address is 21 Ha'arba'a St, Tel-Aviv 64739, Israel.

The Company is still in the research and development phase. Accordingly, the Company is unable to estimate if and when its business will generate positive cash flow. Through September 30, 2013, the Company has accumulated an operating loss and its activities have been funded mainly through public and private offerings of the Company's securities.

The Company plans to fund its future operations through commercialization of its therapeutic candidates, mainly through out-licensing and through additional capital raising. The Company's current cash resources are sufficient to complete the research and development of several, but not all of the Company's therapeutic candidates. Management expects that the Company will incur more losses in the coming years as it continues to focus its resources on advancing its therapeutic candidates based on a prioritization plan that will result in negative cash flows from operating activities. The Company believes its existing capital resources should be sufficient to fund its current and planned operations through approximately November 2014, although no assurance can be given that no additional funds will be needed prior to such time.

If the Company is unable to commercialize or out-license its therapeutic candidates, or obtain future financing, it may be forced to delay, reduce the scope of, or eliminate one or more of its research and development programs related to its therapeutic candidates, which may have a material adverse effect on the Company's business, financial condition and results of operations.

b.     Approval of the condensed interim financial statements

These financial statements were approved by the Board of Directors on November 10, 2013.

7

REDHILL BIOPHARMA LTD.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 2 - BASIS OF PREPARATION OF THE CONDENSED INTERIM FINANCIAL STATEMENTS:

a. The Company's condensed interim financial statements for the three and nine months ended September 30, 2013 (the "Interim Financial Statements") have been prepared in accordance with International Accounting Standard IAS 34, “Interim Financial Reporting”. These Condensed Interim Financial Statements, which are unaudited, do not include all disclosures necessary for a complete presentation of financial position, results of operations, and cash flow in conformity with generally accepted accounting principles. The condensed interim financial statements should be read in conjunction with the annual financial statements as of December 31, 2012 and for the year then ended and their accompanying notes, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as published by the International Accounting Standards Board (“IASB”). The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period.

The accounting policies and calculation methods applied in the preparation of the Condensed Interim Financial Statements are consistent with those applied in the preparation of the annual financial statements as of December 31, 2012.

b. New IFRSs not yet in effect, and which the Company did not elect to adopt early, were listed in the 2012 annual financial statements.

NOTE 3 - AGREEMENTS TO PURCHASE INTELLECTUAL PROPERTY OF DRUGS

In June 2013, the Company recorded intangible assets in the amount of U.S. $200,000 after reaching a development milestone under an agreement with a Canadian-based company for the co-development of a therapeutic candidate to treat acute migraines.

NOTE 4 - EQUITY:

a.        On January 10, 2013, the Company issued 2,317,186 ordinary shares as part of the acquisition and termination of royalty rights granted to investors pursuant to the August 2010 mandatory convertible loan agreement. The acquisition and termination of the royalty rights were approved by a general shareholders meeting of the Company on December 26, 2012.

b.        In December 2012, the Company entered into investment agreements with a group of investors for the issuance of 6,481,280 ordinary shares and 3,240,640 warrants exercisable into ordinary shares in consideration for an aggregate investment amount of approximately U.S. $6.35 million, net of direct issuance costs. The ordinary shares and warrants were issued on January 10, 2013.

c.        During the nine-month period ended September 30, 2013, the Company received a notice of exercise with respect to non-tradable warrants that had been granted to investors who participated in the August and November 2010 mandatory convertible loan agreements. Accordingly, the Company issued 1,577,549 ordinary shares for U.S. $1.331 million, net of direct issuance costs.

8

REDHILL BIOPHARMA LTD.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 4 - EQUITY (continued):

d.        In June 2013, the Company received a notice of exercise with respect to options that had been issued to a consultant in August 2010 and in February 2011. Accordingly, the Company issued 60,000 ordinary shares for U.S. $13,000.

NOTE 5 - SHARE-BASED PAYMENTS:

a.        On July 31, 2013, an extraordinary general meeting of the Company’s shareholders resolved, subsequent to the approval of the Company’s Board of Directors on May 26, 2013, to allocate an aggregate of 850,000 options under the Company’s stock options plan to the Company's directors, including the Company's Chief Executive Officer, Mr. Dror Ben-Asher, and the Company’s Deputy Chief Executive Officer, Finance and Operations, Mr. Ori Shilo. Each option is exercisable into one ordinary share at an exercise price of U.S. $1.12 per share. The options will vest in 16 equal quarterly installments over a four-year period. The fair value of the options on the date of grant was U.S. $0.45 million.

The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company's ordinary share: U.S. $0.98, expected volatility: 66.08%, risk-free interest rate: 1.95% and expected useful life to exercise: seven years.

The options will be exercisable, either in full or in part, from the vesting date until the end of seven years from the date of grant.

b.        On May 26, 2013, the Board of Directors of the Company granted 1,930,000 options to employees and consultants of the Company under the Company’s stock options plan. Each option is exercisable into one ordinary share at an exercise price of U.S. $1.12 per share.

The options will vest as follows: for employees and consultants of the Company who had provided services exceeding one year to the Company as of the date of grant, the options will vest in 16 equal quarterly installments over a four-year period. For employees and consultants of the Company who had not provided services to the Company exceeding one year as of the date of grant, the options will vest as follows: 1/4 of the options will vest one year following the grant date, and the rest over the following three years in 12 equal quarterly installments.

The fair value of all options on the date of grant was U.S. $1.1 million. The fair value of the options was computed using the binomial model and the underlying data used was mainly the following: price of the Company's ordinary share: U.S. $1.067, expected volatility: 66.55%, risk-free interest rate: 1.4% and expected useful life to exercise: seven years.

The options will be exercisable, either in full or in part, from the vesting date until the end of seven years from the date of grant.

9

REDHILL BIOPHARMA LTD.

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 6 - RESEARCH AND DEVELOPMENT EXPENSES, NET:

In February 2013, the Company received a notice from its Canadian service provider ("Service Provider") that the Canadian authorities' successfully completed review of the Service Provider's request for certain incentive cash benefits related to research and development activities provided by the Service Provider for the Company. In March 2013 the Service Provider received the requested benefits from the Canadian authorities and, subsequently, the Company received a discount from the Service Provider for research and development services provided from 2011 through February 2012 in the amount of U.S. $292,000. As of September 30, 2013 the Company expects to receive an additional discount of U.S. $581,000 in respect to research and development services provided by the Service Provider from March 2012 through September 30, 2013.

During the nine-month period ended September 30, 2013, the Company recorded research and development expenses, excluding the incurred credit, in an aggregate amount of U.S. $6.4 million.

NOTE 7 - EVENTS SUBSEQUENT TO SEPTEMBER 30, 2013:
 

During October and November 2013, the Company received notices of exercise with respect to non-tradable warrants that had been granted to investorsin November 2010 mandatory convertible loan agreements. Accordingly, the Company issued 973,316 ordinary shares for U.S. $835,000.

10