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 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2017

Commission file number: 001-36621

FOAMIX PHARMACEUTICALS LTD.

(Translation of registrant's name into English)

2 Holzman Street, Weizmann Science Park

Rehovot, Israel (Address of principal executive office)

_____________________

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

Form 20-F S           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): £

CONTENTS

This report on Form 6-K of the registrant consists of (i) a press release issued by the registrant on August 8, 2017, announcing the registrant’s second quarter financial results for the three and six months ended June 30, 2017, and (ii) the registrant’s Condensed Consolidated Financial Statements as of June 30, 2017, each of which is attached hereto as an exhibit and incorporated by reference herein.

The information contained in this Form 6-K is incorporated by reference into (i) the registration statement on Form S-8 (number 333-199486) of the registrant, filed with the Securities and Exchange Commission (the “SEC”), as amended by the post-effective registration statement on Form S-8 POS filed February 5, 2016, (ii) the registration statement on Form S-8 (number 333-209403) of the registrant, filed with the SEC, and (iii) the registration statement on Form F-3 (333-216224) of the registrant, declared effective by the SEC on March 14, 2017, in each case to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

Exhibits

99.1	Press release: Foamix Reports Second Quarter 2017 Financial Results and Provides Business Update.
99.2	Condensed Consolidated Financial Statements as of June 30, 2017.

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.

FOAMIX PHARMACEUTICALS LTD. (Registrant)
By:	/s/ Ilan Hadar
	Name: Ilan Hadar
	Title: Chief Financial Officer and Country Manager

Date: August 8, 2017

2

EX-99.1

Exhibit 99.1

News Release  

August 8, 2017

Foamix Reports Second Quarter 2017 Financial Results and Provides Business Update

Conference Call and Webcast on Wednesday, August 9, 2017 at 8:30am Eastern / 5:30am Pacific

Rehovot, Israel, August 8, 2017 – Foamix Pharmaceuticals Ltd. (NASDAQ: FOMX) (“Foamix Pharmaceuticals” or the “Company”), a clinical stage specialty pharmaceutical company focused on developing and commercializing proprietary topical foams to address unmet needs in dermatology, announced today financial results for the three and six months ended June 30, 2017.

Clinical, business and corporate developments for the three months ended June 30, 2017 and to date:

· On August 3, 2017 we announced the dosing of the first patient in the third Phase 3 clinical trial for Minocycline Foam FMX101 (Study FX2017-22) for the treatment of moderate-to-severe acne.

· On June 29, 2017, we announced that the Board of Directors has named David Domzalski Chief Executive Officer of the company. He succeeded Dr. Dov Tamarkin as CEO. We also announced that Mr. Meir Eini has stepped down from his role of Chief Innovation Officer. Mr. Ilan Hadar, the Chief Financial Officer of Foamix, assumed the role of Country Manager in Israel, in addition to his role as Chief Financial Officer.

· On June 21, 2017 we held a Type B meeting with the FDA to review the top-line results of our two Phase 3 studies (Study FX2014-04 & FX2014-05) and to seek guidance on how best to proceed with our clinical development program for FMX101. The FDA confirmed that statistically significant findings from a 3rd study would constitute replication of the Study FX2014-05 results, and would be sufficient to establish an efficacy claim.

· On June 12, 2017, we announced the dosing of the first patient in the two Phase 3 clinical trials for FMX103 in patients with moderate-to-severe papulopustular rosacea. FMX103 demonstrated clinically and statistically significant efficacy in treating moderate-to-severe rosacea in a Phase 2 trial which enrolled 233 patients across 18 sites in Germany.

· U.S. Sales of Finacea^® Foam, azelaic acid 15% for the treatment of rosacea.

o Based on sales of Finacea^® Foam reported by Bayer HealthCare AG for Q2, 2017 Foamix is entitled to royalty payments of $798,000, down 14% from the first quarter of 2017.

o Finacea^® Foam was developed through a research and development collaboration between Foamix and Bayer, utilizing Foamix's proprietary foam technology platform. The drug was launched by Bayer in the USA in September 2015.

· On July 1, 2017, Dr. Herman Ellman retired as Vice President Clinical Affairs. Dr. Ellman will continue to serve as an advisor to the Company. Dr. Iain Stuart, assumed the role of Senior Vice President of Research and Development. His new role includes responsibility over all clinical development and innovation and discovery programs.

Financial highlights for the six months ended June 30, 2017:

· Total revenues were $1.7 million compared with $1.5 million for the six months ended June 30, 2016. The increase is due to increase in sales of Finacea^® Foam by Bayer HealthCare AG.

·   Research and development expenses were $26.6 million, compared with $10.3 million in the six months ended June 30, 2016. This increase resulted primarily from an increase in costs relating to the FMX101 (for the treatment of moderate-to-severe acne) and FMX103 (for the treatment of moderate-to-severe rosacea) Phase 3 clinical trials, which are now running simultaneously, as well as an increase in payroll and related expenses, due to one-time severance payments and an increase in headcount in the research and development department.

· Selling, general and administrative expenses were $6.3 million, compared with $3.8 million in the six months ended June 30, 2016. The increase in selling, general and administrative expenses resulted primarily from increase in payroll and other payroll-related expenses due to one-time severance payments and an increase in headcount. In addition, we incurred an increase in expenses relating to consultants and professional fees, office expenses and capital loss.

· Operating expenses totaled $32.9 million, compared with $14.1 million in the six months ended June 30, 2016.

· Net loss was $30.8 million or $0.82 per share, basic and diluted, compared with a loss of $12.7 million or $0.41 per share, basic and diluted, for the six months ended June 30, 2016.

· Cash and investments (including long term) as of June 30, 2017 totaled $109.5 million, compared with $131.0 million as of December 31, 2016.

Management overview

· Following the top-line data from our two Phase 3 clinical trials (Trial 04 and 05) for FMX101 in the treatment of moderate-to-severe acne, in the intent-to-treat analysis, FMX101 demonstrated statistical significance compared to vehicle on both co-primary endpoints in Trial 05 (specifically the absolute reduction in inflammatory lesions at week 12, and investigator global assessment (IGA) treatment success at week 12 compared to baseline). In Trial 04, statistical significance was demonstrated for FMX101 compared to vehicle in the co-primary endpoint of absolute reduction in inflammatory lesions, however, statistical significance was not achieved in the co-primary endpoint of IGA treatment success. On May 3, 2017, we provided new data from our two Phase 3 clinical trials for FMX101, including pooled analysis of our co-primary endpoints and certain secondary clinical endpoints (absolute reduction of non-inflammatory lesions at week 12; and percent change in inflammatory lesions at weeks 3, 6, 9 and 12). Statistical significance was demonstrated for FMX101 compared to vehicle in the pooled analysis of the co-primary endpoints as well as the secondary endpoints presented. Following the top-line data from Trial 04 and 05, we held a Type B Meeting with the FDA, during which the FDA confirmed that statistically significant findings from a 3rd study would constitute replication of the Study FX2014-05 results and would be sufficient for establishing an efficacy claim. This confirmation reaffirmed our plans for conducting a 3rd Phase 3 study.

· On August 3, 2017 we announced the dosing of the first patient in the third Phase 3 Acne clinical trial (Study FX2017-22) for Minocycline Foam FMX101. Study FX2017-22 is a double-blind, vehicle-controlled, multi-center study that will enroll 1,500 patients with moderate-to-severe acne. This study will be conducted at approximately 80 sites throughout the United States. Patients will be randomized 1:1 to either 4% minocycline foam (FMX101) or vehicle, with once daily treatment for 12 weeks. The primary endpoints are identical to the primary endpoints in Study FX2014-04 and FX2014-05, which are: 1) the proportion of patients achieving success at week 12 based on an IGA (success is defined as a score of “clear” or “almost clear” and at least a 2 category improvement from baseline), and 2) the mean change from baseline in inflammatory lesion counts in each treatment group at week 12. Safety evaluation will include reported adverse events, assessments of tolerability, clinical laboratory tests and vital signs. As a result of the recent discussions with the FDA on the design of a 3rd study, we have decided to maintain the design agreed upon with FDA for Study FX2014-04 & 05. We continue to run, in parallel, the long-term open-label safety extension to evaluate the safety of intermittent use of FMX101. The open-label safety extension is scheduled to complete by year-end 2017. We expect to report top-line results from Study FX2017-22 by mid-2018. If the results are positive, this trial will form the basis for an NDA which we plan to submit in the second half of 2018.

· On June 29, 2017 after leading the Company for the past 14 years, the two founders Dr. Dov Tamarkin and Mr. Meir Eini resigned from their respective positions of Chief Executive Officer and Chief Innovation Officer in Foamix. The Board of Directors named David Domzalski Chief Executive Officer of the Company. Prior to taking the role as CEO, Mr. Domzalski served as President of our U.S. subsidiary since April, 2014. Dr. Tamarkin will continue to be a member of the company’s Board of Directors and will serve as an advisor to the Company. Mr. Meir Eini will also continue to serve as an advisor to the Company. Mr. Ilan Hadar, the current Chief Financial Officer of Foamix, assumed the role of Country Manager in Israel, in addition to his role as Chief Financial Officer.

· On June 12, 2017, we announced that the first patient had been dosed in our Phase 3 program to evaluate the efficacy and safety of our topical Minocycline Foam 1.5%, FMX103. The Phase 3 program consists of two multi-center studies (FX2016-11 and FX2016-12). Each study will enroll approximately 750 patients with moderate-to-severe papulopustular rosacea into a 12-week double-blind, vehicle-controlled phase. This will be followed by a 9-month open-label safety extension phase with the active 1.5% minocycline foam. Both studies will be conducted at approximately 80 sites throughout the United States. Patients will be randomized on a 2:1 basis (1.5% minocycline foam vs vehicle) and treated once daily for 12 weeks in the initial double-blind portions of the studies. The primary efficacy endpoints are (1) the proportion of patients achieving success at week 12 based on an IGA (success is defined as a score of “clear” or “almost clear” and at least a 2-grade improvement from baseline), and (2) the mean change from baseline in inflammatory lesion counts in each treatment group at week 12. Safety evaluation will include reported adverse events, assessments of tolerability, clinical laboratory tests and vital signs. Patients who complete the 12 weeks of treatment will have the option to continue in a long-term open-label safety extension to evaluate the safety of intermittent use of FMX103 for up to an additional 9 months. We expect to report top-line results from the blinded phase of the clinical trials by mid-2018.

· On July 1, 2017, Dr. Herman Ellman retired as Vice President Clinical Affairs. Dr. Ellman will continue to serve as an advisor to the Company. Dr. Iain Stuart, assumed the role of Senior Vice President of Research and Development. His new role includes responsibility over all clinical development and innovation and discovery programs.

· Regarding manufacturing, in Q1 2017, we successfully completed the scale-up process for FMX101 to a commercial batch size of one-ton. The production of three registration batches has been completed.

· In addition to our internal drug development pipeline, we have development and license agreements relating to our proprietary foam technology with other pharmaceutical companies, including Bayer Healthcare and others, in various stages of development and commercialization. Our agreements with these licensees entitle us to development fees, contingent payments and royalties upon commercialization.

· In September 2015, Bayer Healthcare began selling Finacea^® Foam (azelaic acid 15% for the treatment of rosacea) in the U.S. Finacea^® foam is a prescription foam product which was developed as part of a research and development collaboration between Foamix and Bayer, utilizing Foamix's proprietary foam technology platform. According to our license agreement with Bayer, we are entitled to royalties upon commercialization of Finacea Foam. For the three months ended June 30, 2017, we were entitled to royalties from Bayer in an amount of $798,000, down 14% from the first quarter of 2017.

· We are currently well-capitalized and have sufficient cash to fund our key development programs (FMX101 and FMX103) until mid-2019.

Financial results for the three months ended June 30, 2017

Revenues

Total revenues for the three-month ended June 30, 2017 were $798,000 compared with $752,000 for the three months ended June 30, 2016. The increase is due to increase in sales of Finacea^® Foam by Bayer HealthCare AG.

Operating Expenses

Our operating expenses for the three months ended June 30, 2017, and three months ended June 30, 2016, were as follows:

Research and Development Expenses

Research and development expenses increased by $7.2 million, or 107%, from $6.7 million in the three months ended June 30, 2016, to $13.9 million in the three months ended June 30, 2017. The increase in research and development expenses resulted primarily from an increase of $6.2 million in costs relating to the FMX101 and FMX103 Phase 3 clinical trials, which are now running simultaneously, and an increase of $890,000 in payroll and payroll related expenses (including bonuses and equity-based compensation) due to one-time severance payments and increase in headcount in the research and development department.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $1.4 million, or 67%, from $2.1 million in the three months ended June 30, 2016, to $3.5 million in the three months ended June 30, 2017. The increase in selling, general and administrative expenses resulted primarily from an increase of $1.3 million in payroll and other payroll-related expenses (including bonuses and equity-based compensation) due to one-time severance payments and increase in headcount.

Finance Income, Net

For the three months ended June 30, 2017, we recorded financial income of $287,000 compared to financial expenses of $14,000 recorded for the three months ended June 30, 2016. The financial income for the three months ended June 30, 2017 resulted primarily from interest and financial gains from our cash investments. The financial expenses in the three months ended June 30, 2016, resulted primarily from expenses on the loan received from the Binational Industrial Research and Development (“BIRD”) Fund, offset by interest and financial gains from our cash investments.

Net Loss

For the three months ended June 30, 2017, we recorded a net loss of $16.4 million or $0.44 per share, basic and diluted, compared with a loss of $8.2 million or $0.27 per share, basic and diluted, for the three months ended June 30, 2016.

Financial Results for the Six Months Ended June 30, 2017

Revenues

Total revenues for the six months ended June 30, 2017 were $1.7 million compared with $1.5 million for the six months ended June 30, 2016. The increase is due to increase in sales of Finacea^® Foam by Bayer HealthCare AG.

Operating Expenses

Our operating expenses for the six months ended June 30, 2017 and 2016 were as follows:

Research and Development Expenses

Research and development expenses increased by $16.3 million, or 158%, from $10.3 million in the six months ended June 30, 2016 to $26.6 million in the six months ended June 30, 2017. The increase in research and development expenses resulted primarily from an increase of $14.1 million in costs relating to the FMX101 and FMX103 Phase 3 clinical trials which are now running simultaneously, and an increase of $2.0 million in payroll and payroll related expenses (including bonuses and stock based compensation) due to one-time severance payments and an increase in headcount in the research and development department.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $2.5 million, or 66%, from $3.8 million in the six months ended June 30, 2016 to $6.3 million in the six months ended June 30, 2017. The increase in selling, general and administrative expenses resulted primarily from an increase of $1.6 million in payroll and other payroll-related expenses (including bonuses and equity-based compensation) due to one-time severance payments and increase in headcount. In addition, we incurred an increase of $243,000 in expenses relating to consultants and professional fees, $146,000 in office expenses and $105,000 in capital loss.

Finance Income, net

For the six months ended June 30, 2017 we recorded financial income of $544,000 compared to $160,000 recorded for the six months ended June 30, 2016. The increase in financial income resulted from an increase in interest and financial gains from our cash investments and expenses on the loan received from BIRD recoded in the second quarter of 2016.

Net Loss

For the six months ended June 30, 2017 we recorded a net loss of $30.8 million or $0.82 per share, basic and diluted, compared with a loss of $12.7 million or $0.41 per share, basic and diluted, for the six months ended June 30, 2016.

Liquidity and Capital Resources

As of June 30, 2017, we had cash and investments (including long term) of $109.5 million, compared with $131.0 million as of December 31, 2016. The decrease was mostly due to operating expenses primarily relating to the clinical trials. During the six months ended June 30, 2017 we used $20.8 million in cash in our operations compared to $12.1 million used in operating activities in the six months ended June 30, 2016.

Conference Call

Management will host an investment community conference call on August 9, 2017 at 8:30 a.m. Eastern / 5:30 a.m. Pacific / 3:30 p.m. Israel to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing Domestic: 877-780-3381; International: +1-913-312-1403. Conference ID: 2390109. Webcast: http://public.viavid.com/index.php?id=125169.

A replay of the call will be accessible two hours after its completion through August 23, 2017 by dialing Domestic: 844-512-2921; International: +1-412-317-6671; Passcode: 2390109. The call will also be archived for 90 days at www.streetevents.com and www.foamixpharma.com.

About Foamix

Foamix is a specialty pharmaceutical company focused on the development and commercialization of proprietary, innovative and differentiated topical drugs for dermatological therapy. Our clinical stage product candidates include FMX101, our novel minocycline foam for the treatment of moderate-to-severe acne, FMX102 for the treatment of impetigo, FMX103 for the treatment of rosacea and FDX104, our doxycycline foam for the management of acne-like rash induced by EGFRI anticancer drugs.

In addition, we have development and license agreements relating to our technology with various pharmaceutical companies including Bayer HealthCare and others.

Cautionary Note Regarding Forward-Looking Statements

This release includes forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, such as statements regarding assumptions, expectations, forecasts, beliefs or intentions related to financial results, commercial results, timing and results of clinical trials and U.S. FDA and other regulatory agencies authorizations. Forward-looking statements are based on our current knowledge and our present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, unexpected delays, excess costs or unfavorable results of clinical trials, delays or denial in the U.S. FDA approval process, additional competition in the acne market, denial of reimbursement by third party payors or inability to raise additional capital. We discuss many of these risks in greater detail under the heading “Risk Factors” in our most recent Annual Report on Form 20-F (File No. 17625089) filed on February 21, 2017, and elsewhere in that Annual Report. Although we believe these forward-looking statements are reasonable, they speak only as of the date of this announcement and Foamix undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law. Given these risks and uncertainties, you should not rely upon forward-looking statements as predictions of future events.

Finacea^® is a registered trademark of Bayer Healthcare.

Contact:	U.S. Investor Relations
Ilan Hadar, CFO & Country Manager	Michael Rice
Foamix Pharmaceuticals Ltd.	LifeSci Advisors, LLC
+972-8-9316233	646-597-6979
ilan.hadar@foamixpharma.com	mrice@lifesciadvisors.com

EX-99.2

Exhibit 99.2

FOAMIX PHARMACEUTICALS LTD.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2017

FOAMIX PHARMACEUTICALS LTD.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2017

TABLE OF CONTENTS

	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Balance sheets	2-3
Statements of operations	4
Statements of comprehensive loss	5
Statements of changes in shareholders' equity	6
Statements of cash flows	7
Notes to financial statements	8-18

The amounts are stated in US dollars in thousands (except for share data)

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

(Unaudited)

	June 30,		December 31,
	2017		2016
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents	$	45,827	$	31,190
Restricted cash		250		250
Short term bank deposits		21,328		38,351
Investment in marketable securities (Note 4)		30,733		43,275
Restricted investment in marketable securities (Note 4)		287		261
Accounts receivable:
Trade		798		3,236
Other		531		438
TOTAL  CURRENT ASSETS		99,754		117,001
NON-CURRENT ASSETS:
Investment in marketable securities (Note 4)		10,959		17,532
Restricted investment in marketable securities (Note 4)		142		129
Property and equipment, net		1,497		938
Other		35		35
TOTAL  NON-CURRENT ASSETS		12,633		18,634
TOTAL  ASSETS	$	112,387	$	135,635

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

2

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

(Unaudited)

	June 30,			December 31,
	2017			2016
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Current maturities of bank borrowing	$	5		$	20
Accounts payable and accruals:
Trade		7,127			2,267
Other		3,917			2,984
TOTAL  CURRENT LIABILITIES		11,049			5,271
LONG-TERM LIABILITIES:
Liability for employee severance benefits		434			379
TOTAL  LONG-TERM LIABILITIES		434			379
TOTAL  LIABILITIES		11,483			5,650
COMMITMENTS (Note 6)
SHAREHOLDERS' EQUITY:
Ordinary Shares, NIS 0.16 par value - authorized: 50,000,000  Ordinary Shares as of June 30, 2017 and December 31, 2016; issued and outstanding: 37,426,703 and 37,167,791 Ordinary Shares as of June 30, 2017 and December 31, 2016, respectively		1,572			1,561
Additional paid-in capital		205,673			204,052
Accumulated deficit		(106,337	)		(75,566	)
Accumulated other comprehensive loss		(4	)		(62	)
TOTAL  SHAREHOLDERS' EQUITY		100,904			129,985
TOTAL  LIABILITIES AND SHAREHOLDERS' EQUITY	$	112,387		$	135,635

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

3

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

 (U.S. dollars in thousands, except per share data)

(Unaudited)

	Six months ended June 30						Three months ended June 30
	2017			2016			2017			2016
REVENUES (Note 7)	$	1,725		$	1,497		$	798		$	752
COST OF REVENUES		-			43			-			12
GROSS PROFIT		1,725			1,454			798			740
OPERATING EXPENSES:
Research and development		26,615			10,300			13,940			6,734
Selling, general and administrative		6,273			3,838			3,451			2,128
TOTAL OPERATING EXPENSES		32,888			14,138			17,391			8,862
OPERATING LOSS		31,163			12,684			16,593			8,122
FINANCE EXPENSES (INCOME), net		(544	)		(160	)		(287	)		14
LOSS BEFORE INCOME TAX		30,619			12,524			16,306			8,136
INCOME TAX		152			177			81			57
NET LOSS FOR THE PERIOD	$	30,771		$	12,701		$	16,387		$	8,193
LOSS PER SHARE BASIC AND DILUTED	$	0.82		$	0.41		$	0.44		$	0.27
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED   IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE IN THOUSANDS		37,304			30,658			37,420			30,661

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

4

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 (U.S. dollars in thousands)

(Unaudited)

	Six months ended June 30						Three months ended June 30
	2017			2016			2017			2016
NET LOSS	$	30,771		$	12,701		$	16,387		$	8,193
OTHER COMPREHENSIVE INCOME:
Net unrealized gains from marketable securities		(42	)		(167	)		(36	)		(11	)
Gains on marketable securities reclassified into net loss		-			4			-			2
Net unrealized losses (gains) on derivative financial instruments		(104	)		(26	)		(29	)		52
Gains on derivative financial instruments reclassified into net loss		88			4			48			-
TOTAL OTHER COMPREHENSIVE LOSS (INCOME)		(58	)		(185	)		(17	)		43
TOTAL  COMPREHENSIVE LOSS	$	30,713		$	12,516		$	16,370		$	8,236

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

5

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (U.S. dollars in thousands, except per share data)

(Unaudited)

	Ordinary shares				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income (loss)			Total
	Number of shares		Amounts		Amounts
BALANCE AS OF JANUARY 1, 2016		30,639,134	$	1,284	$	145,878		$	(46,230	)	$	(130	)	$	100,802
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2016:
Comprehensive loss									(12,701	)		185			(12,516	)
Exercise of restricted share units		22,498		1		(1	)
Share-based compensation (Note 5)						1,230									1,230
BALANCE AT JUNE 30, 2016		30,661,632	$	1,285	$	147,107		$	(58,931	)	$	55		$	89,516
BALANCE AS OF JANUARY 1, 2017		37,167,791	$	1,561	$	204,052		$	(75,566	)	$	(62	)	$	129,985
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2017:									(30,771	)		58			(30,713	)
Comprehensive loss
Exercise of warrants		191,793		8		(8	)
Exercise of options and restricted share units		67,119		3		142									145
Share-based compensation (Note 5)						1,487									1,487
BALANCE AT JUNE 30, 2017		37,426,703	$	1,572	$	205,673		$	(106,337	)	$	(4	)	$	100,904

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

6

FOAMIX PHARMACEUTICALS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)

(Unaudited)

	Six months ended June 30
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	30,771		$	12,701
Adjustments required to reconcile loss to net cash used in operating activities:
Depreciation and amortization		91			66
Loss from disposal of fixed assets		105			-
Changes in marketable securities and bank deposits, net		132			242
Changes in accrued liability for employee severance benefits, net of retirement fund profit		54			14
Share-based compensation		1,487			1,230
Non-cash finance income, net		(62	)		(2	)
Changes in operating asset and liabilities:
Decrease (increase) in trade and other receivable		2,369			(342	)
Increase (decrease) in accounts payable and accruals		5,812			(616	)
Net cash used in operating activities		(20,783	)		(12,109	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(774	)		(216	)
Investment in bank deposits		(8,000	)		(13,000	)
Investment in marketable securities		(2,913	)		(700	)
Proceeds from sale and maturity of marketable securities and bank deposits		46,922			27,725
Net cash provided by investing activities		35,235			13,809
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options		145			-
Payments in respect of BIRD loan		-			(476	)
Payments in respect of bank borrowings		(16	)		(16	)
Net cash provided by (used in) financing activities		129			(492	)
INCREASE  IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		14,581			1,208
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH		56			3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD		31,440			18,795
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD	$	46,077		$	20,006
Cash and cash equivalents		45,827			20,006
Restricted cash		250			-
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS	$	46,077		$	20,006
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Property and equipment purchases included in accounts payable and accruals	$	8		$	27
Cashless exercise of warrants and RSUs	$	9		$	*-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for taxes	$	337		$	119
Interest received	$	728		$	641
Interest paid	$	*-		$	239

* Represents an amount less than $1.

The accompanying notes are an integral part of these unaudited

condensed consolidated financial statements.

7

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 1   -   NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

a. Nature of operations

Foamix Pharmaceuticals Ltd. (hereinafter "Foamix") is an Israeli company incorporated in 2003. Foamix is a clinical-stage specialty pharmaceutical company operating in one segment - the development and commercialization of foam-based formulations, using its proprietary technology, which includes its foam platforms. Foamix develops its own product candidates, mainly for the treatment of moderate-to-severe acne and other skin conditions. It also licenses its technology under development and licensing agreements to various pharmaceutical companies for development of certain products combining Foamix's foam technology with the licensee's proprietary drugs.

Since incorporation through June 30, 2017, Foamix and its subsidiary (hereinafter "the Company") incurred losses and negative cash flows from operations mainly attributable to its development efforts and has an accumulated deficit of $106,337. The Company has financed its operations mainly through the issuance of shares through private and public financing rounds, convertible loans and payments received under development and licensing agreements. The Company's cash and investments as of June 30, 2017, will allow the Company to fund its operating plan through at least the next 12 months. However, the Company expects to continue to incur significant research and development and other expenses related to its ongoing operations and in order to continue its future operations, the Company will need to obtain additional funding until becoming profitable. If the Company is unable to obtain such funding it will need to curtail or cease operations.

b. Basis of presentation

The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company's consolidated financial position as of June 30, 2017, the consolidated results of operations and comprehensive loss for the three and six-month periods ended June 30, 2017  and 2016, the consolidated changes in shareholders' equity and cash flows for the six-month periods ended June 30, 2017  and 2016.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual financial statements for the year ended December 31, 2016. The condensed consolidated balance sheet data as of December 31, 2016, was derived from the audited consolidated financial statements for the year ended December 31, 2016, but does not include all disclosures required by U.S. GAAP.

The results for the three and six-month periods ended June 30, 2017, are not necessarily indicative of the results expected for the year ending December 31, 2017.

8

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 2   -   SIGNIFICANT ACCOUNTING POLICIES:

a. Principles of consolidation

The consolidated financial statements include the accounts of Foamix and its subsidiary. Intercompany balances and transactions including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

b. Marketable securities The Company invests in debt and equity securities classified as available for sale in accordance with ASC 320, Investments - Debt and Equity Securities.

Management determines the appropriate classification of its investments in securities at the time of purchase and reevaluates such determinations at each balance sheet date. Classifications of debt securities in the balance sheet are determined based on the maturity date of the securities.

Unrealized gains of available for sale securities, net of taxes, are reflected in other comprehensive income. Unrealized losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary are charged to income as an impairment charge. Realized gains and losses for both debt and equity securities are included in financial expense (income), net.

For equity securities, the Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. For debt securities, an other-than-temporary impairment has occurred if the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company does not intend to sell the impaired debt security, and it is not more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis, the amount of the other-than-temporary impairment recognized in earnings, recorded in financial expense, net, is limited to the portion attributed to credit loss. The remaining portion of the other-than-temporary impairment related to other factors is recognized in other comprehensive income or loss.

c. Fair value measurement

Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

9

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 2   −  SIGNIFICANT ACCOUNTING POLICIES (continued):

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

d. Derivatives

The Company purchases foreign exchange derivative financial instruments (written and purchased currency options). The transactions are designed to hedge the Company's currency exposure.

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheet at their fair value. Changes in the fair value of derivatives that are highly effective and designated as cash flow hedges are reported as a component of other comprehensive income or loss and reclassified into earnings in the same line-item associated with the forecasted transaction and in the same periods during which the hedged transaction impacts earnings.

For derivatives that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of cash flows from the underlying hedged items that these derivatives are hedging.

e. Share-based compensation

The Company accounts for employees' and directors' share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period.  Forfeitures are accounted for as they occur.

The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method based on the multiple-option award approach.

When options and restricted share units (hereinafter "RSUs") are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the consideration received or the fair value of the awards issued, whichever is more reliably measurable. The fair value of the awards granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.

10

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 2   −  SIGNIFICANT ACCOUNTING POLICIES (continued):

f. Newly issued and recently adopted accounting pronouncements:

Accounting pronouncements adopted in period:

1) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718). ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

2) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows Topic 230: Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 issued guidance to clarify how certain cash receipts and cash payments should be presented in the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

Accounting pronouncements that are not yet effective and have not been early adopted by the Company:

3) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity's revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April, May and December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes, and ASU 2016-20, technical corrections and improvements  (Topic 606), revenue from contracts with customers. The Company is currently evaluating the impact of this new standard, however it is not expected to have a material impact on the Company's consolidated financial statements.

4) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10). This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of the amended guidance on its consolidated financial statements.

11

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 2   -   SIGNIFICANT ACCOUNTING POLICIES (continued):

5) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

6) In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that today's guidance delays recognition of credit losses. The standard will replace today's "incurred loss" approach with an "expected loss" model. The new model, referred to as the current expected credit loss ("CECL") model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale ("AFS") debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity's assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

7) In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. This new standard amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. The new standard will be effective for us on January 1, 2019. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

8) In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.  ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award.  ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718.  The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.  Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

12

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 3   -   FAIR VALUE PRESENTATION

The Company's assets and liabilities that are measured at fair value as of June 30, 2017 and December 31, 2016 are classified in the tables below in one of the three categories described in note 2c above:

	June 30, 2017
	Level 1		Level 2		Total
Marketable securities	$	973	$	41,148	$	42,121
Currency options designated as hedging instruments		-	$	25	$	25
	December 31, 2016
	Level 1		Level 2		Total
Marketable securities	$	957	$	60,240	$	61,197
Currency options designated as hedging instruments		-	$	2	$	2

The Company's corporate debt securities are traded in markets that are not considered to be active, but are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Accordingly, these assets are categorized as Level 2.

Foreign exchange risk management

The Company purchases and writes non-functional currency options in order to hedge the currency exposure on the Company's cash flow. The currency hedged items are denominated in New Israeli Shekel (NIS). The purchasing and writing of options is part of a comprehensive currency hedging strategy with respect to salary and rent expenses denominated in NIS. These transactions are at zero cost for periods of up to one year. The counterparties to the derivatives are major banks in Israel. As of June 30, 2017, the total hedged amount was NIS 3.5 million.

As of June 30, 2017, the Company recorded a derivative asset in the amount of $25 out of which $19 qualifies as hedge accounting.

As of June 30, 2017, the Company has a lien in the amount of $246 on the Company's marketable securities and a lien in the amount $250 on the Company's checking account, in respect of bank guarantees granted in order to secure the hedging transactions.

13

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 4    -    MARKETABLE SECURITIES

Marketable securities as of June 30, 2017 consist mainly of debt and equity securities. These securities are classified as available-for-sale and are recorded at fair value. Changes in fair value, net of taxes (if applicable), are reflected in other comprehensive loss. Realized gains and losses on sales of the securities, as well as premium or discount amortization, are included in the consolidated statement of operations as finance income or expenses.

The following table sets forth the Company's marketable securities:

	June 30,		December 31,
	2017		2016
Israeli mutual funds	$	973	$	957
Certificates of deposit		23,263		33,350
Municipal and agency bonds		17,885		26,890
Total	$	42,121	$	61,197

As of June 30, 2017 and December 31, 2016 the fair value, cost and gross unrealized holding gains and losses of the securities owned by the Company were as follows:

	June 30, 2017
	Fair value		Cost or Amortized cost		Gross unrealized holding losses		Gross unrealized holding gains
Israeli mutual funds	$	973	$	951	$	-	$	22
Certificates of deposit		23,263		23,283		33		13
Municipal and agency bonds		17,885		17,909		25		1
Total	$	42,121	$	42,143	$	58	$	36

	December 31, 2016
	Fair value		Cost or Amortized cost		Gross unrealized holding losses		Gross unrealized holding gains
Israeli mutual funds	$	957	$	952	$	-	$	5
Certificates of deposit		33,350		33,408		68		10
Agency bonds		26,890		26,901		13		2
Total	$	61,197	$	61,261	$	81	$	17

As of June 30, 2017, the unrealized losses attributed to the Company's marketable securities were primarily due to credit spreads and interest rate movements. The Company has considered factors regarding other than temporary impaired securities and determined that there are no securities with impairment that is other than temporary as of June 30, 2017 and December 31, 2016.

 As of June 30, 2017 and December 31, 2016 the Company's debt securities had the following maturity dates:

	Market value
	June 30, 2017		December 31, 2016
Due within one year	$	30,189	$	42,708
1 to 2 years		9,674		14,513
2 to 3 years		1,285		3,019
Total	$	41,148	$	60,240

14

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 4    -    MARKETABLE SECURITIES (continued):

$429 and $390 of the Company's marketable securities were restricted as of June 30, 2017 and December 31, 2016, respectively, due to a lien in respect of bank guarantees granted to secure hedging transaction and the Company's rent agreement. Refer to note 6 and note 3.

NOTE 5    -    SHARE CAPITAL:

a. Warrants

During the three and six months ended June 30, 2017, 413,242 warrants were exercised into 191,793 ordinary shares. As of June 30, 2017 and 2016, the total amount of warrants outstanding were 1,394,558 and 2,064,937, respectively.

b. Share-based compensation

In May 2015, the Company's board of directors approved a new option plan (the "Plan") replacing the previous plan approved in 2009. The Plan included a pool of 2,690,694 ordinary shares for grant to Company employees, consultants, directors and other service providers. In November 2016, the board of directors approved an increase of 900,000 ordinary shares to the plan. As of June 30, 2017, 1,002,712 shares remain available for grant under the Plan.

In the six months ended June 30, 2017 and June 30, 2016, the Company granted options to employees and non-employees as follows:

	Six months ended June 30, 2017
	Award amount		Exercise price range		Vesting period		Expiration
Employees:
Options		578,133		10.218-10.31	4 years			10 years
RSUs		192,713		-		4 years		-

	Six months ended June 30, 2016
	Award amount		Exercise price range		Vesting period	Expiration
Employees:
Options		615,310	$	6.04-$6.66	4 years	10 years
RSUs		5,000		-	4 years		-
Consultants:
Options		4,800	$	6.34	4 years	10 years

The fair value of options and RSUs granted to employees and directors during the six months ended June 30, 2017 and the six months ended June 30, 2016 was $5,229 and $2,049 respectively. The fair value of options and RSUs granted to consultants during the six months ended June 30, 2016 $23.

The fair value of RSUs granted to employees is based on the share price on grant date.

15

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 5    -    SHARE CAPITAL (continued):

The fair value of options granted to employees and directors on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	Six months ended June 30
	2017			2016
Value of ordinary share	$	10.12		$	5.90-$6.84
Dividend yield		0	%		0	%
Expected volatility		59.7	%		60.3%-60.5	%
Risk-free interest rate		2.09	%		1.36%-1.52	%
Expected term	6 years			6 years

The fair value of RSUs granted to consultants is based on the share price on June 30, 2017.

The fair value of options granted during the six months ended June 30, 2016 to consultants, was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	June 30,
	2016
Value of ordinary share	$	6.52
Dividend yield		0	%
Expected volatility		69.2	%
Risk-free interest rate		1.78	%
Expected term	10 years

The following table illustrates the effect of share-based compensation on the statements of operations:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Cost of revenues	$	-	$	3	$	-	$	1
Research and development expenses		575		464		155		252
Selling, general and administrative		912		763		566		444
	$	1,487	$	1,230	$	721	$	697

16

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 6   -   COMMITMENTS

Lease agreement

The Company leases office space for its headquarters and research and development facilities in Israel and the United States of America under several lease agreements. The lease agreements for the facilities in Israel are linked to the Israeli CPI and expire in December 2020. The lease agreement in the United States is due to expire during March 2018.

Rental expenses for the three and six months ended June 30, 2017 and June 30, 2016, are as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Rental expenses	$	277	$	174	$	168	$	73

Future minimum lease commitments under non-cancelable operating lease agreements are as follows:

2017		368
2018		670
2019 and thereafter		1,299
Total	$	2,337

The Company has a lien in the amount of $183 on the Company's marketable securities in respect of bank guarantees granted in order to secure the lease agreements.

NOTE 7   -   ENTITY-WIDE DISCLOSURES:

a. Net revenues by geographic area were as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
United States	$	-	$	14	$	-	$	-
Germany		1,725		1,434		798		752
France		-		49		-		-
Total revenues	$	1,725	$	1,497	$	798	$	752

b. During the three and six months ended June 30, 2017 and June 30, 2016 the Company had one customer exceeding 10% of total revenues. Revenues from the customer were $1,725 and $1,434 during the six months ending June 30, 2017 and June 30, 2016, respectively. Revenues from the customer were $798 and $752 during the three months ending June 30, 2017 and June 30, 2016, respectively.

17

FOAMIX PHARMACEUTICALS LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(U.S. dollars in thousands, except share and per share amounts)

NOTE 7   -   ENTITY-WIDE DISCLOSURES (continued):

c. Net revenues by type of payment:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Development service payments	$	-	$	63	$	-	$	-
Royalties		1,725		1,434		798		752
Total revenues	$	1,725	$	1,497	$	798	$	752

NOTE 8   -   MATERIAL EVENT DURING THE PERIOD

In June 2017, the Company entered into new agreements with Dr. Dov Tamarkin and Mr. Meir Eini pursuant to their resignation from their roles as Chief Executive Officer and Chief Innovation Officer of the Company, respectively, effective as of June 29, 2017. As part of the agreements, as of July 1, 2017 Dr. Tamarkin and Mr. Eini will begin to serve as advisors to the Company. In addition, Dr. Tamarkin and Mr. Eini are entitled to customary cash severance payments in the total amount of $1.8 million and will retain all outstanding stock options and RSUs, as long as they serve as advisors of the Company.

NOTE 9   -   SUBSEQUENT EVENT

On July 13, 2017, the Company's shareholders approved an increase of the authorized share capital of the Company by an additional NIS 6,400,000 divided into 40,000,000 ordinary shares with a nominal value of NIS 0.16 per share.

18

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2017
Document And Entity Information
Entity Registrant Name	Foamix Pharmaceuticals Ltd.
Entity Central Index Key	0001606645
Document Type	6-K
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 45,827	$ 31,190
Restricted cash	250	250
Short term bank deposits	21,328	38,351
Investment in marketable securities (Note 4)	30,733	43,275
Restricted investment in marketable securities (Note 4)	287	261
Accounts receivable:
Trade	798	3,236
Other	531	438
TOTAL CURRENT ASSETS	99,754	117,001
NON-CURRENT ASSETS:
Investment in marketable securities (Note 4)	10,959	17,532
Restricted investment in marketable securities (Note 4)	142	129
Property and equipment, net	1,497	938
Other	35	35
TOTAL NON-CURRENT ASSETS	12,633	18,634
TOTAL ASSETS	112,387	135,635
CURRENT LIABILITIES:
Current maturities of bank borrowing	5	20
Accounts payable and accruals:
Trade	7,127	2,267
Other	3,917	2,984
TOTAL CURRENT LIABILITIES	11,049	5,271
LONG-TERM LIABILITIES:
Liability for employee severance benefits	434	379
TOTAL LONG-TERM LIABILITIES	434	379
TOTAL LIABILITIES	11,483	5,650
COMMITMENTS (Note 6)
SHAREHOLDERS' EQUITY:
Ordinary Shares, NIS 0.16 par value - authorized: 50,000,000 Ordinary Shares as of June 30, 2017 and December 31, 2016; issued and outstanding: 37,426,703 and 37,167,791 Ordinary Shares as of June 30, 2017 and December 31, 2016, respectively	1,572	1,561
Additional paid-in capital	205,673	204,052
Accumulated deficit	(106,337)	(75,566)
Accumulated other comprehensive loss	(4)	(62)
TOTAL SHAREHOLDERS' EQUITY	100,904	129,985
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 112,387	$ 135,635

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Ordinary shares, par value (in NIS per share)	₪ 0.16	₪ 0.16
Ordinary shares, shares authorized	50,000,000	50,000,000
Ordinary shares, shares issued	37,426,703	37,167,791
Ordinary shares, shares outstanding	37,426,703	37,167,791

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
REVENUES (Note 7)	$ 798	$ 752	$ 1,725	$ 1,497
COST OF REVENUES		12		43
GROSS PROFIT	798	740	1,725	1,454
OPERATING EXPENSES:
Research and development	13,940	6,734	26,615	10,300
Selling, general and administrative	3,451	2,128	6,273	3,838
TOTAL OPERATING EXPENSES	17,391	8,862	32,888	14,138
OPERATING LOSS	16,593	8,122	31,163	12,684
FINANCE EXPENSES (INCOME), net	(287)	14	(544)	(160)
LOSS BEFORE INCOME TAX	16,306	8,136	30,619	12,524
INCOME TAX	81	57	152	177
NET LOSS FOR THE PERIOD	$ 16,387	$ 8,193	$ 30,771	$ 12,701
LOSS PER SHARE BASIC AND DILUTED	$ 0.44	$ 0.27	$ 0.82	$ 0.41
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE IN THOUSANDS	37,420	30,661	37,304	30,658

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
NET LOSS	$ 16,387	$ 8,193	$ 30,771	$ 12,701
OTHER COMPREHENSIVE INCOME:
Net unrealized gains from marketable securities	(36)	(11)	(42)	(167)
Gains on marketable securities reclassified into net loss		2		4
Net unrealized losses (gains) on derivative financial instruments	(29)	52	(104)	(26)
Gains on derivative financial instruments reclassified into net loss	48		88	4
TOTAL OTHER COMPREHENSIVE LOSS (INCOME)	(17)	43	(58)	(185)
TOTAL COMPREHENSIVE LOSS	$ 16,370	$ 8,236	$ 30,713	$ 12,516

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Ordinary shares [Member]	Additional paid-in capital [Member]	Accumulated deficit [Member]	Accumulated other comprehensive income (loss) [Member]	Total
Balance at Dec. 31, 2015	$ 1,284	$ 145,878	$ (46,230)	$ (130)	$ 100,802
Balance (shares) at Dec. 31, 2015	30,639,134
Comprehensive loss			(12,701)	185	(12,516)
Exercise of restricted share units	$ 1	(1)
Exercise of restricted share units (shares)	22,498
Share-based compensation (Note 5)		1,230			1,230
Balance at Jun. 30, 2016	$ 1,285	147,107	(58,931)	55	89,516
Balance (shares) at Jun. 30, 2016	30,661,632
Balance at Dec. 31, 2016	$ 1,561	204,052	(75,566)	(62)	$ 129,985
Balance (shares) at Dec. 31, 2016	37,167,791				37,167,791
Comprehensive loss			(30,771)	58	$ (30,713)
Exercise of warrants	$ 8	(8)
Exercise of warrants (shares)	191,793
Exercise of options and restricted share units	$ 3	142			145
Exercise of options and restricted share units (shares)	67,119
Share-based compensation (Note 5)		1,487			1,487
Balance at Jun. 30, 2017	$ 1,572	$ 205,673	$ (106,337)	$ (4)	$ 100,904
Balance (shares) at Jun. 30, 2017	37,426,703				37,426,703

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017		Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ 30,771		$ 12,701
Adjustments required to reconcile loss to net cash used in operating activities:
Depreciation and amortization	91		66
Loss from disposal of fixed assets	105
Changes in marketable securities and bank deposits, net	132		242
Changes in accrued liability for employee severance benefits, net of retirement fund profit	54		14
Share-based compensation	1,487		1,230
Non-cash finance income, net	(62)		(2)
Changes in operating asset and liabilities:
Decrease (Increase) in trade and other receivable	2,369		(342)
Increase (decrease) in accounts payable and accruals	5,812		(616)
Net cash used in operating activities	(20,783)		(12,109)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(774)		(216)
Investment in bank deposits	(8,000)		(13,000)
Investment in marketable securities	(2,913)		(700)
Proceeds from sale and maturity of marketable securities and bank deposits	46,922		27,725
Net cash provided by investing activities	35,235		13,809
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options	145
Payments in respect of BIRD loan			(476)
Payments in respect of bank borrowings	(16)		(16)
Net cash provided by (used in) financing activities	129		(492)
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	14,581		1,208
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH	56		3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD	31,440		18,795
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD	46,077		20,006
Cash and cash equivalents	45,827		20,006
Restricted cash	250
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS	46,077		20,006
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:
Property and equipment purchases included in accounts payable and accruals	8		27
Cashless exercise of warrants and RSUs	9			[1]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for taxes	337		119
Interest received	728		641
Interest paid		[1]	$ 239

[1] Represents an amount less than $1.

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NATURE OF OPERATIONS AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

NOTE 1   -   NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

a. Nature of operations

Foamix Pharmaceuticals Ltd. (hereinafter "Foamix") is an Israeli company incorporated in 2003. Foamix is a clinical-stage specialty pharmaceutical company operating in one segment - the development and commercialization of foam-based formulations, using its proprietary technology, which includes its foam platforms. Foamix develops its own product candidates, mainly for the treatment of moderate-to-severe acne and other skin conditions. It also licenses its technology under development and licensing agreements to various pharmaceutical companies for development of certain products combining Foamix's foam technology with the licensee's proprietary drugs.

Since incorporation through June 30, 2017, Foamix and its subsidiary (hereinafter "the Company") incurred losses and negative cash flows from operations mainly attributable to its development efforts and has an accumulated deficit of $106,337. The Company has financed its operations mainly through the issuance of shares through private and public financing rounds, convertible loans and payments received under development and licensing agreements. The Company's cash and investments as of June 30, 2017, will allow the Company to fund its operating plan through at least the next 12 months. However, the Company expects to continue to incur significant research and development and other expenses related to its ongoing operations and in order to continue its future operations, the Company will need to obtain additional funding until becoming profitable. If the Company is unable to obtain such funding it will need to curtail or cease operations.

b. Basis of presentation

The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company's consolidated financial position as of June 30, 2017, the consolidated results of operations and comprehensive loss for the three and six-month periods ended June 30, 2017  and 2016, the consolidated changes in shareholders' equity and cash flows for the six-month periods ended June 30, 2017  and 2016.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual financial statements for the year ended December 31, 2016. The condensed consolidated balance sheet data as of December 31, 2016, was derived from the audited consolidated financial statements for the year ended December 31, 2016, but does not include all disclosures required by U.S. GAAP.

The results for the three and six-month periods ended June 30, 2017, are not necessarily indicative of the results expected for the year ending December 31, 2017.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2   -   SIGNIFICANT ACCOUNTING POLICIES:

a. Principles of consolidation

The consolidated financial statements include the accounts of Foamix and its subsidiary. Intercompany balances and transactions including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

b. Marketable securitiesThe Company invests in debt and equity securities classified as available for sale in accordance with ASC 320, Investments - Debt and Equity Securities.

Management determines the appropriate classification of its investments in securities at the time of purchase and reevaluates such determinations at each balance sheet date. Classifications of debt securities in the balance sheet are determined based on the maturity date of the securities.

Unrealized gains of available for sale securities, net of taxes, are reflected in other comprehensive income. Unrealized losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary are charged to income as an impairment charge. Realized gains and losses for both debt and equity securities are included in financial expense (income), net.

For equity securities, the Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. For debt securities, an other-than-temporary impairment has occurred if the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company does not intend to sell the impaired debt security, and it is not more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis, the amount of the other-than-temporary impairment recognized in earnings, recorded in financial expense, net, is limited to the portion attributed to credit loss. The remaining portion of the other-than-temporary impairment related to other factors is recognized in other comprehensive income or loss.

c. Fair value measurement

Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

d. Derivatives

The Company purchases foreign exchange derivative financial instruments (written and purchased currency options). The transactions are designed to hedge the Company's currency exposure.

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheet at their fair value. Changes in the fair value of derivatives that are highly effective and designated as cash flow hedges are reported as a component of other comprehensive income or loss and reclassified into earnings in the same line-item associated with the forecasted transaction and in the same periods during which the hedged transaction impacts earnings.

For derivatives that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of cash flows from the underlying hedged items that these derivatives are hedging.

e. Share-based compensation

The Company accounts for employees' and directors' share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period.  Forfeitures are accounted for as they occur.

The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method based on the multiple-option award approach.

When options and restricted share units (hereinafter "RSUs") are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the consideration received or the fair value of the awards issued, whichever is more reliably measurable. The fair value of the awards granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.

f. Newly issued and recently adopted accounting pronouncements:

Accounting pronouncements adopted in period:

1) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718). ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

2) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows Topic 230: Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 issued guidance to clarify how certain cash receipts and cash payments should be presented in the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

Accounting pronouncements that are not yet effective and have not been early adopted by the Company:

3) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity's revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April, May and December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes, and ASU 2016-20, technical corrections and improvements  (Topic 606), revenue from contracts with customers. The Company is currently evaluating the impact of this new standard, however it is not expected to have a material impact on the Company's consolidated financial statements.

4) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10). This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of the amended guidance on its consolidated financial statements.

5) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

6) In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that today's guidance delays recognition of credit losses. The standard will replace today's "incurred loss" approach with an "expected loss" model. The new model, referred to as the current expected credit loss ("CECL") model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale ("AFS") debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity's assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

7) In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. This new standard amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. The new standard will be effective for us on January 1, 2019. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

8) In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.  ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award.  ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718.  The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.  Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

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FAIR VALUE PRESENTATION

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE PRESENTATION

NOTE 3   -   FAIR VALUE PRESENTATION

The Company's assets and liabilities that are measured at fair value as of June 30, 2017 and December 31, 2016 are classified in the tables below in one of the three categories described in note 2c above:

	June 30, 2017
	Level 1		Level 2		Total
Marketable securities	$	973	$	41,148	$	42,121
Currency options designated as hedging instruments		-	$	25	$	25
	December 31, 2016
	Level 1		Level 2		Total
Marketable securities	$	957	$	60,240	$	61,197
Currency options designated as hedging instruments		-	$	2	$	2

The Company's corporate debt securities are traded in markets that are not considered to be active, but are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Accordingly, these assets are categorized as Level 2.

Foreign exchange risk management

The Company purchases and writes non-functional currency options in order to hedge the currency exposure on the Company's cash flow. The currency hedged items are denominated in New Israeli Shekel (NIS). The purchasing and writing of options is part of a comprehensive currency hedging strategy with respect to salary and rent expenses denominated in NIS. These transactions are at zero cost for periods of up to one year. The counterparties to the derivatives are major banks in Israel. As of June 30, 2017, the total hedged amount was NIS 3.5 million.

As of June 30, 2017, the Company recorded a derivative asset in the amount of $25 out of which $19 qualifies as hedge accounting.

As of June 30, 2017, the Company has a lien in the amount of $246 on the Company's marketable securities and a lien in the amount $250 on the Company's checking account, in respect of bank guarantees granted in order to secure the hedging transactions.

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MARKETABLE SECURITIES

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

NOTE 4    -    MARKETABLE SECURITIES

Marketable securities as of June 30, 2017 consist mainly of debt and equity securities. These securities are classified as available-for-sale and are recorded at fair value. Changes in fair value, net of taxes (if applicable), are reflected in other comprehensive loss. Realized gains and losses on sales of the securities, as well as premium or discount amortization, are included in the consolidated statement of operations as finance income or expenses.

The following table sets forth the Company's marketable securities:

	June 30,		December 31,
	2017		2016
Israeli mutual funds	$	973	$	957
Certificates of deposit		23,263		33,350
Municipal and agency bonds		17,885		26,890
Total	$	42,121	$	61,197

As of June 30, 2017 and December 31, 2016 the fair value, cost and gross unrealized holding gains and losses of the securities owned by the Company were as follows:

	June 30, 2017
	Fairvalue		Cost or Amortized cost		Gross unrealizedholding losses		Gross unrealizedholding gains
Israeli mutual funds	$	973	$	951	$	-	$	22
Certificates of deposit		23,263		23,283		33		13
Municipal and agency bonds		17,885		17,909		25		1
Total	$	42,121	$	42,143	$	58	$	36

	December 31, 2016
	Fairvalue		Cost or Amortized cost		Gross unrealizedholding losses		Gross unrealizedholding gains
Israeli mutual funds	$	957	$	952	$	-	$	5
Certificates of deposit		33,350		33,408		68		10
Agency bonds		26,890		26,901		13		2
Total	$	61,197	$	61,261	$	81	$	17

As of June 30, 2017, the unrealized losses attributed to the Company's marketable securities were primarily due to credit spreads and interest rate movements. The Company has considered factors regarding other than temporary impaired securities and determined that there are no securities with impairment that is other than temporary as of June 30, 2017 and December 31, 2016.

 As of June 30, 2017 and December 31, 2016 the Company's debt securities had the following maturity dates:

	Market value
	June 30, 2017		December 31, 2016
Due within one year	$	30,189	$	42,708
1 to 2 years		9,674		14,513
2 to 3 years		1,285		3,019
Total	$	41,148	$	60,240

$429 and $390 of the Company's marketable securities were restricted as of June 30, 2017 and December 31, 2016, respectively, due to a lien in respect of bank guarantees granted to secure hedging transaction and the Company's rent agreement. Refer to note 6 and note 3.

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SHARE CAPITAL

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Note [Abstract]

SHARE CAPITAL

NOTE 5    -    SHARE CAPITAL:

a. Warrants

During the three and six months ended June 30, 2017, 413,242 warrants were exercised into 191,793 ordinary shares. As of June 30, 2017 and 2016, the total amount of warrants outstanding were 1,394,558 and 2,064,937, respectively.

b. Share-based compensation

In May 2015, the Company's board of directors approved a new option plan (the "Plan") replacing the previous plan approved in 2009. The Plan included a pool of 2,690,694 ordinary shares for grant to Company employees, consultants, directors and other service providers. In November 2016, the board of directors approved an increase of 900,000 ordinary shares to the plan. As of June 30, 2017, 1,002,712 shares remain available for grant under the Plan.

In the six months ended June 30, 2017 and June 30, 2016, the Company granted options to employees and non-employees as follows:

	Six months ended June 30, 2017
	Award amount		Exercise price range		Vesting period		Expiration
Employees:
Options		578,133		10.218-10.31	4 years			10 years
RSUs		192,713		-		4 years		-

	Six months ended June 30, 2016
	Award amount		Exercise price range		Vesting period	Expiration
Employees:
Options		615,310	$	6.04-$6.66	4 years	10 years
RSUs		5,000		-	4 years		-
Consultants:
Options		4,800	$	6.34	4 years	10 years

The fair value of options and RSUs granted to employees and directors during the six months ended June 30, 2017 and the six months ended June 30, 2016 was $5,229 and $2,049 respectively. The fair value of options and RSUs granted to consultants during the six months ended June 30, 2016 $23.

The fair value of RSUs granted to employees is based on the share price on grant date.

The fair value of options granted to employees and directors on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	Six months ended June 30
	2017			2016
Value of ordinary share	$	10.12		$	5.90-$6.84
Dividend yield		0	%		0	%
Expected volatility		59.7	%		60.3%-60.5	%
Risk-free interest rate		2.09	%		1.36%-1.52	%
Expected term	6 years			6 years

The fair value of RSUs granted to consultants is based on the share price on June 30, 2017.

The fair value of options granted during the six months ended June 30, 2016 to consultants, was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	June 30,
	2016
Value of ordinary share	$	6.52
Dividend yield		0	%
Expected volatility		69.2	%
Risk-free interest rate		1.78	%
Expected term	10 years

The following table illustrates the effect of share-based compensation on the statements of operations:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Cost of revenues	$	-	$	3	$	-	$	1
Research and development expenses		575		464		155		252
Selling, general and administrative		912		763		566		444
	$	1,487	$	1,230	$	721	$	697

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COMMITMENTS

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

NOTE 6   -   COMMITMENTS

Lease agreement

The Company leases office space for its headquarters and research and development facilities in Israel and the United States of America under several lease agreements. The lease agreements for the facilities in Israel are linked to the Israeli CPI and expire in December 2020. The lease agreement in the United States is due to expire during March 2018.

Rental expenses for the three and six months ended June 30, 2017 and June 30, 2016, are as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Rental expenses	$	277	$	174	$	168	$	73

Future minimum lease commitments under non-cancelable operating lease agreements are as follows:

2017		368
2018		670
2019 and thereafter		1,299
Total	$	2,337

The Company has a lien in the amount of $183 on the Company's marketable securities in respect of bank guarantees granted in order to secure the lease agreements.

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ENTITY-WIDE DISCLOSURES

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

ENTITY-WIDE DISCLOSURES

NOTE 7   -   ENTITY-WIDE DISCLOSURES:

a. Net revenues by geographic area were as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
United States	$	-	$	14	$	-	$	-
Germany		1,725		1,434		798		752
France		-		49		-		-
Total revenues	$	1,725	$	1,497	$	798	$	752

b. During the three and six months ended June 30, 2017 and June 30, 2016 the Company had one customer exceeding 10% of total revenues. Revenues from the customer were $1,725 and $1,434 during the six months ending June 30, 2017 and June 30, 2016, respectively. Revenues from the customer were $798 and $752 during the three months ending June 30, 2017 and June 30, 2016, respectively.

c. Net revenues by type of payment:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Development service payments	$	-	$	63	$	-	$	-
Royalties		1,725		1,434		798		752
Total revenues	$	1,725	$	1,497	$	798	$	752

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MATERIAL EVENT DURING THE PERIOD

6 Months Ended

Jun. 30, 2017

Material Event During Period

MATERIAL EVENT DURING THE PERIOD

NOTE 8   -   MATERIAL EVENT DURING THE PERIOD

In June 2017, the Company entered into new agreements with Dr. Dov Tamarkin and Mr. Meir Eini pursuant to their resignation from their roles as Chief Executive Officer and Chief Innovation Officer of the Company, respectively, effective as of June 29, 2017. As part of the agreements, as of July 1, 2017 Dr. Tamarkin and Mr. Eini will begin to serve as advisors to the Company. In addition, Dr. Tamarkin and Mr. Eini are entitled to customary cash severance payments in the total amount of $1.8 million and will retain all outstanding stock options and RSUs, as long as they serve as advisors of the Company.

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SUBSEQUENT EVENT

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 9   -   SUBSEQUENT EVENT

On July 13, 2017, the Company's shareholders approved an increase of the authorized share capital of the Company by an additional NIS 6,400,000 divided into 40,000,000 ordinary shares with a nominal value of NIS 0.16 per share.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Principles of consolidation

a. Principles of consolidation

The consolidated financial statements include the accounts of Foamix and its subsidiary. Intercompany balances and transactions including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation.

Marketable securities

b. Marketable securitiesThe Company invests in debt and equity securities classified as available for sale in accordance with ASC 320, Investments - Debt and Equity Securities.

Management determines the appropriate classification of its investments in securities at the time of purchase and reevaluates such determinations at each balance sheet date. Classifications of debt securities in the balance sheet are determined based on the maturity date of the securities.

Unrealized gains of available for sale securities, net of taxes, are reflected in other comprehensive income. Unrealized losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary are charged to income as an impairment charge. Realized gains and losses for both debt and equity securities are included in financial expense (income), net.

For equity securities, the Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. For debt securities, an other-than-temporary impairment has occurred if the Company does not expect to recover the entire amortized cost basis of the debt security. If the Company does not intend to sell the impaired debt security, and it is not more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis, the amount of the other-than-temporary impairment recognized in earnings, recorded in financial expense, net, is limited to the portion attributed to credit loss. The remaining portion of the other-than-temporary impairment related to other factors is recognized in other comprehensive income or loss.

Fair value measurement

c. Fair value measurement

Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

Derivatives

d. Derivatives

The Company purchases foreign exchange derivative financial instruments (written and purchased currency options). The transactions are designed to hedge the Company's currency exposure.

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheet at their fair value. Changes in the fair value of derivatives that are highly effective and designated as cash flow hedges are reported as a component of other comprehensive income or loss and reclassified into earnings in the same line-item associated with the forecasted transaction and in the same periods during which the hedged transaction impacts earnings.

For derivatives that qualify for hedge accounting, the cash flows associated with these derivatives are reported in the consolidated statements of cash flows consistently with the classification of cash flows from the underlying hedged items that these derivatives are hedging.

Share-based compensation

e. Share-based compensation

The Company accounts for employees' and directors' share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period.  Forfeitures are accounted for as they occur.

The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method based on the multiple-option award approach.

When options and restricted share units (hereinafter "RSUs") are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the consideration received or the fair value of the awards issued, whichever is more reliably measurable. The fair value of the awards granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.

Newly issued and recently adopted accounting pronouncements

f. Newly issued and recently adopted accounting pronouncements:

Accounting pronouncements adopted in period:

1) In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718). ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

2) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows Topic 230: Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 issued guidance to clarify how certain cash receipts and cash payments should be presented in the statement of cash flows. This standard, adopted as of January 1, 2017, had no impact on the Company's condensed consolidated financial statements.

Accounting pronouncements that are not yet effective and have not been early adopted by the Company:

3) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which impacts virtually all aspects of an entity's revenue recognition. The core principle of Topic 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the effective date of the standard by one year which results in the new standard being effective for the Company at the beginning of its first quarter of fiscal year 2018. In addition, during March, April, May and December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, respectively, which clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability and presentation of sales taxes, and ASU 2016-20, technical corrections and improvements  (Topic 606), revenue from contracts with customers. The Company is currently evaluating the impact of this new standard, however it is not expected to have a material impact on the Company's consolidated financial statements.

4) In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10). This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact of the amended guidance on its consolidated financial statements.

5) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

6) In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments. This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that today's guidance delays recognition of credit losses. The standard will replace today's "incurred loss" approach with an "expected loss" model. The new model, referred to as the current expected credit loss ("CECL") model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale ("AFS") debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity's assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

7) In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. This new standard amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. The new standard will be effective for us on January 1, 2019. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

8) In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.  ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award.  ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718.  The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.  Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements.

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FAIR VALUE PRESENTATION (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value

The Company's assets and liabilities that are measured at fair value as of June 30, 2017 and December 31, 2016 are classified in the tables below in one of the three categories described in note 2c above:

	June 30, 2017
	Level 1		Level 2		Total
Marketable securities	$	973	$	41,148	$	42,121
Currency options designated as hedging instruments		-	$	25	$	25
	December 31, 2016
	Level 1		Level 2		Total
Marketable securities	$	957	$	60,240	$	61,197
Currency options designated as hedging instruments		-	$	2	$	2

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MARKETABLE SECURITIES (Tables)

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of marketable securities

The following table sets forth the Company's marketable securities:

	June 30,		December 31,
	2017		2016
Israeli mutual funds	$	973	$	957
Certificates of deposit		23,263		33,350
Municipal and agency bonds		17,885		26,890
Total	$	42,121	$	61,197

Schedule of the fair value, cost and gross unrealized holding gains of the securities owned

As of June 30, 2017 and December 31, 2016 the fair value, cost and gross unrealized holding gains and losses of the securities owned by the Company were as follows:

	June 30, 2017
	Fairvalue		Cost or Amortized cost		Gross unrealizedholding losses		Gross unrealizedholding gains
Israeli mutual funds	$	973	$	951	$	-	$	22
Certificates of deposit		23,263		23,283		33		13
Municipal and agency bonds		17,885		17,909		25		1
Total	$	42,121	$	42,143	$	58	$	36

	December 31, 2016
	Fairvalue		Cost or Amortized cost		Gross unrealizedholding losses		Gross unrealizedholding gains
Israeli mutual funds	$	957	$	952	$	-	$	5
Certificates of deposit		33,350		33,408		68		10
Agency bonds		26,890		26,901		13		2
Total	$	61,197	$	61,261	$	81	$	17

Schedule of maturity dates of debt securities

As of June 30, 2017 and December 31, 2016 the Company's debt securities had the following maturity dates:

	Market value
	June 30, 2017		December 31, 2016
Due within one year	$	30,189	$	42,708
1 to 2 years		9,674		14,513
2 to 3 years		1,285		3,019
Total	$	41,148	$	60,240

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SHARE CAPITAL (Tables)

6 Months Ended

Jun. 30, 2017

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of options granted to employees and non-employees

In the six months ended June 30, 2017 and June 30, 2016, the Company granted options to employees and non-employees as follows:

	Six months ended June 30, 2017
	Award amount		Exercise price range		Vesting period		Expiration
Employees:
Options		578,133		10.218-10.31	4 years			10 years
RSUs		192,713		-		4 years		-

	Six months ended June 30, 2016
	Award amount		Exercise price range		Vesting period	Expiration
Employees:
Options		615,310	$	6.04-$6.66	4 years	10 years
RSUs		5,000		-	4 years		-
Consultants:
Options		4,800	$	6.34	4 years	10 years

Schedule of Share-based Compensation

The following table illustrates the effect of share-based compensation on the statements of operations:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Cost of revenues	$	-	$	3	$	-	$	1
Research and development expenses		575		464		155		252
Selling, general and administrative		912		763		566		444
	$	1,487	$	1,230	$	721	$	697

Consultants and Other Service Providers [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Underlying Data Used for Computing the Fair Value of the Options

The fair value of options granted during the six months ended June 30, 2016 to consultants, was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	June 30,
	2016
Value of ordinary share	$	6.52
Dividend yield		0	%
Expected volatility		69.2	%
Risk-free interest rate		1.78	%
Expected term	10 years

Employees and Directors [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Underlying Data Used for Computing the Fair Value of the Options

The fair value of options granted to employees and directors on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

	Six months ended June 30
	2017			2016
Value of ordinary share	$	10.12		$	5.90-$6.84
Dividend yield		0	%		0	%
Expected volatility		59.7	%		60.3%-60.5	%
Risk-free interest rate		2.09	%		1.36%-1.52	%
Expected term	6 years			6 years

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COMMITMENTS (Tables)

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Rent Expense

Rental expenses for the three and six months ended June 30, 2017 and June 30, 2016, are as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Rental expenses	$	277	$	174	$	168	$	73

Schedule of Future Minimum Lease Commitments

Future minimum lease commitments under non-cancelable operating lease agreements are as follows:

2017		368
2018		670
2019 and thereafter		1,299
Total	$	2,337

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ENTITY-WIDE DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Schedule of Net Revenues by Geographic Area

Net revenues by geographic area were as follows:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
United States	$	-	$	14	$	-	$	-
Germany		1,725		1,434		798		752
France		-		49		-		-
Total revenues	$	1,725	$	1,497	$	798	$	752

Schedule of Net Revenues by Payment Type

Net revenues by type of payment:

	Six months ended June 30				Three months ended June 30
	2017		2016		2017		2016
Development service payments	$	-	$	63	$	-	$	-
Royalties		1,725		1,434		798		752
Total revenues	$	1,725	$	1,497	$	798	$	752

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NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 106,337	$ 75,566
Minimum period for which Company's cash, cash equivalents, bank deposits and marketable securities will allow to fund its operating plan	12 months

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FAIR VALUE MEASURMENTS (Narrative) (Details) - 6 months ended Jun. 30, 2017 $ in Thousands, ₪ in Millions	USD ($)	ILS (₪)
Fair Value Disclosures [Abstract]
Currency hedging transactions, maximum term	1 year
Foreign exchange risk lien	$ 246
Foreign exchange risk lien for bank guarantees granted to secure hedging transactions	250
Total hedged amount | ₪		₪ 3.5
Amount recognized in other comprehensive income relating to cash flow hedge transaction	19
Derivative assets	$ 25

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FAIR VALUE MEASURMENTS (Schedule of Assets and Liabilities Measured at Fair Value) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 42,121	$ 61,197
Currency options designated as hedging instruments (current liability)	25	2
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	973	957
Currency options designated as hedging instruments (current liability)
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	41,148	60,240
Currency options designated as hedging instruments (current liability)	$ 25	$ 2

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MARKETABLE SECURITIES (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Marketable Securities Narrative Details
Marketable securities restricted	$ 429	$ 390

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MARKETABLE SECURITIES (Schedule of Marketable Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 42,121	$ 61,197
Israeli mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	973	957
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	23,263	33,350
Municipal and agency bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 17,885	$ 26,890

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MARKETABLE SECURITIES (Schedule of Fair Value, Cost or Amortized Cost, and Gross Unrealized Holding Gains and Losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 42,121	$ 61,197
Gross unrealized holding losses	58	81
Gross unrealized holding gains	36	17
Cost or Amortized cost	42,143	61,261
Israeli mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	973	957
Gross unrealized holding losses
Gross unrealized holding gains	22	5
Cost or Amortized cost	951	952
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	23,263	33,350
Gross unrealized holding losses	33	68
Gross unrealized holding gains	13	10
Cost or Amortized cost	23,283	33,408
Municipal and agency bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value	17,885	26,890
Gross unrealized holding losses	25	13
Gross unrealized holding gains	1	2
Cost or Amortized cost	$ 17,909	$ 26,901

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MARKETABLE SECURITIES (Schedule of Maturity Dates of Debt Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Due within one year	$ 30,189	$ 42,708
1 to 2 years	9,674	14,513
2 to 3 years	1,285	3,019
Total	$ 41,148	$ 60,240

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SHARE CAPITAL (Narrative - Share-based Compensation ) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Nov. 30, 2016	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	May 31, 2015
Ordinary shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued		191,793	191,793
New option plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant		1,002,712	1,002,712
Number of shares authorized under the plan					2,690,694
Increase in number of shares authorized under the plan	900,000
Share Options [Member] | Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of options and RSUs granted				$ 23
Share Options [Member] | Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of options and RSUs granted			$ 5,229	$ 2,049
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants exercised		413,242	413,242
Warrants outstanding		1,394,558	1,394,558	2,064,937

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SHARE CAPITAL (Schedule of Options Granted to Employees and Non-employees) (Details) - $ / shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share Options [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award amount	578,133	615,310
Exercise price range, minimum	$ 10.218	$ 6.04
Exercise price range, maximum	$ 10.31	$ 6.66
Vesting period	4 years	4 years
Expiration period	10 years	10 years
Share Options [Member] | Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award amount		4,800
Exercise price range, maximum		$ 6.34
Vesting period		4 years
Expiration period		10 years
RSUs [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award amount	192,713	5,000
Vesting period	4 years	4 years

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SHARE CAPITAL (Schedule of Underlying Data Used for Computing the Fair Value of the Options) (Details) - Share Options [Member] - Employees and Directors [Member] - $ / shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of ordinary share	$ 10.12
Dividend yield	0.00%	0.00%
Expected volatility	59.70%
Expected volatility, minimum		60.30%
Expected volatility, maximum		60.50%
Risk-free interest rate	2.09%
Risk-free interest rate, minimum		1.36%
Risk-free interest rate, maximum		1.52%
Expected term	6 years	6 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of ordinary share		$ 5.90
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of ordinary share		$ 6.84

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SHARE CAPITAL (Schedule of Underlying Data Used for Computing the Fair Value of the Options for consultant) (Details) - Share Options [Member] - Consultants [Member]	6 Months Ended
	Jun. 30, 2016 $ / shares
Value of ordinary share	$ 6.52
Dividend yield	0.00%
Expected volatility	69.20%
Risk-free interest rate	1.78%
Expected term	10 years

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SHARE CAPITAL (Schedule of Share-based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ 721	$ 697	$ 1,487	$ 1,230
Cost of revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation		1		3
Research and development expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	155	252	575	464
Selling, general and administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ 566	$ 444	$ 912	$ 763

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COMMITMENTS (Schedule of Rental Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Rental expenses	$ 168	$ 73	$ 277	$ 174
Lien amount in respect of bank guarantees granted in order to secure the lease agreements	$ 183		$ 183

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COMMITMENTS (Schedule of Future Minimum Lease Commitments) (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2017	$ 368
2018	670
2019 and thereafter	1,299
Total	$ 2,337

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ENTITY-WIDE DISCLOSURES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue, Major Customer [Line Items]
Total revenues	$ 798	$ 752	$ 1,725	$ 1,497
Revenue [Member] | Customers [Member]
Revenue, Major Customer [Line Items]
Total revenues	$ 798	$ 752	$ 1,725	$ 1,434

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ENTITY-WIDE DISCLOSURES (Schedule of Net Revenues by Geographic Area) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 798	$ 752	$ 1,725	$ 1,497
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues				14
Germany [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	798	752	1,725	1,434
France [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues				$ 49

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ENTITY-WIDE DISCLOSURES (Schedule of Net Revenues by Payment Type) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue, Major Customer [Line Items]
Total revenues	$ 798	$ 752	$ 1,725	$ 1,497
Revenue [Member] | Development service payments [Member]
Revenue, Major Customer [Line Items]
Total revenues				63
Revenue [Member] | Royalties [Member]
Revenue, Major Customer [Line Items]
Total revenues	$ 798	$ 752	$ 1,725	$ 1,434

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MATERIAL EVENT DURING THE PERIOD (Details) $ in Millions	Jun. 30, 2017 USD ($)
Material Event During Period
Amount of customary cash severance payments entitled to former Chief Executive Officer and Innovation Officer, now serving as advisors of the Company	$ 1.8

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SUBSEQUENT EVENT (Details) - ILS (₪)	Jul. 13, 2017	Jun. 30, 2017	Dec. 31, 2016
Subsequent Event [Line Items]
Par value		₪ 0.16	₪ 0.16
Subsequent Event [Member] | Ordinary shares [Member]
Subsequent Event [Line Items]
Increase in authorized share capital	₪ 6,400,000
Increase in number of ordinary shares authorized	40,000,000
Par value	₪ 0.16