COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2015

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 8:—COMMITMENTS AND CONTINGENT LIABILITIES


a.	The Company's lease agreement for its Israeli offices had a three year term ending June 30, 2015. The lease was amended to extend the term by an additional six months, and on July 22, 2015. The Company exercised an option to extend the lease term for an additional 24 months ending December 31, 2017. Inc.'s lease agreement for its U.S. offices had a 17-month term ending February 28, 2015 continued on a month-to -month basis through July 31, 2015. In May 2015, Inc. signed a lease agreement for a period of four years.

As of December 31, 2015, the future minimum aggregate lease commitments under non-cancelable operating lease agreements are as follows:

As of December 31,		Total
2016		$	376
2017			376
2018			253
2019			105

		$	1,110



b.	During the years 2005- 2010, the Company received grants under the royalty-bearing programs administered by the Office of the Chief Scientist ("OCS"), and from the Incubator, RAD BioMed Ltd. In May 2015, the OCS approved the Company's request to transfer manufacturing rights outside of Israel, noting that the Company would be required to pay an increased royalty rate without providing any specifics. Therefore, if income will be generated from the funded research program, the Company will be obligated to pay royalties on such revenue at a rate between 4% for the first three years and 4.5% commencing the fourth year and up to 150% to 300% of the amount received, linked to the LIBOR. As of December 31, 2015, the total amount of grants received from the OCS and the Incubator was $746 including interest.

The revenues under the Agreement with Cardiome are subject to royalties under the above programs. Royalty expenses relating to the OCS in connection to the aforesaid Agreement for the year ended December 31, 2015 were $35.

In the event that intellectual property rights are deemed to be transferred out of Israel, the grants received from the OCS and the Incubator may become a loan to be repaid immediately at up to 600% of the grants amounts. Currently, the Company's management believes no intellectual property has been transferred out of Israel and disclosure of the Company's know how is made solely in connection with the transfer of manufacturing rights of the Company's products to subcontractors. Accordingly, no provision has been recorded in such respect.


c.	In October 2015, the Company filed a petition with the Patent Trial and Appeal Board ("PTAB") of the United States Patent and Trademark Office for an inter partes review of U.S. Patent No. 8,497,393 (the "'393 Patent") granted to United Therapeutics Corporation ("UTC"), seeking to invalidate this patent. The '393 Patent relates to a process for preparing prostacyclin derivatives such as treprostinil. Treprostinil is used in Trevyent. UTC filed a response to the Company's petition in January 2016, defending the '393 Patent. The Company expects the PTAB to decide whether to institute the review of the '393 Patent by mid-April 2016.

According to the Company and its legal advisors, the outcome of the PTAB's review cannot be determined at this time.