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|  | ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|------------------------------------------------------------------------------------------------|

|  | ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|--------------------------------------------------------------------------------------|

|  | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|------------------------------------------------------------------------------------------|

|  | ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|---------------------------------------------------------------------------------------------|

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| Title of each class                                                                          |   | Name of each exchange on which registered |
|----------------------------------------------------------------------------------------------|--------|-------------------------------------------|
| American Depositary Shares, each representing 1 ordinary share, par value NIS 0.10 per share |   | Nasdaq Capital Market                     |
|                                                                                         |   |                                      |
| Ordinary shares, par value NIS 0.10 per share                                                |   | Nasdaq Capital Market*                    |
|                                                                                         |   |                                      |

----

|   | Large accelerated filer ☐ |   | Accelerated filer ☐ |   | Non-accelerated filer ☒ |
|--------|---------------------------------|--------|---------------------------|--------|-------------------------------|

|   | U.S. GAAP ☐ |   | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ |   | Other ☐ |
|--------|-------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|---------------|

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|         |                                                                         | Page      |
|--------------|------------------------------------------------------------------------------|-----------|
|         |                                                                         |      |
| INTRODUCTION |                                                                         |  ii  |
|         | PART I                                                                       |      |
| ITEM 1.      | Identity of Directors, Senior Management and Advisers                        |  1   |
| ITEM 2.      | Offer Statistics and Expected Timetable                                      |  1   |
| ITEM 3.      | Key Information                                                              |  1   |
| ITEM 4.      | Information on the Company                                                   |  23  |
| ITEM 4A      | Unresolved Staff Comments                                                    |  63  |
| ITEM 5.      | Operating and Financial Review and Prospects                                 |  63  |
| ITEM 6.      | Directors, Senior Management and Employees                                   |  74  |
| ITEM 7.      | Major Shareholders and Related Party Transactions                            |  87  |
| ITEM 8.      | Financial Information                                                        |  98  |
| ITEM 9.      | The Offer and Listing                                                        |  99  |
| ITEM 10.     | Additional Information                                                       |  100 |
| ITEM 11.     | Quantitative and Qualitative Disclosure on Market Risk                       |  115 |
| ITEM 12.     | Description of Securities Other Than Equity Securities                       |  115 |
|         | PART II                                                                      |      |
| ITEM 13.     | Defaults, Dividends, Arrearages and Delinquencies                            |  118 |
| ITEM 14.     | Material Modifications to the Rights of Security Holders and Use of Proceeds |  119 |
| ITEM 15.     | Controls and Procedures                                                      |  119 |
| ITEM 16.     | [Reserved]                                                                   |  119 |
| ITEM 16A.    | Audit Committee Financial Experts                                            |  119 |
| ITEM 16B.    | Code of Ethics                                                               |  119 |
| ITEM 16C.    | Principal Accountant Fees and Services                                       |  120 |
| ITEM 16D.    | Exemptions from The Listing Standards for Audit Committees                   |  120 |
| ITEM 16E.    | Purchases of Equity Securities by The Issuer and Affiliated Purchasers       |  120 |
| ITEM 16F.    | Change in Registrations Certifying Accountant                                |  120 |
| ITEM 16G.    | Corporate Governance                                                         |  120 |
| ITEM 16H.    | Mine Safety Disclosure                                                       |  123 |
|         | PART III                                                                     |      |
| ITEM 17.     | Financial Statements                                                         |  123 |
| ITEM 18.     | Financial Statements                                                         |  123 |
| ITEM 19.     | Exhibits                                                                     |  124 |
| SIGNATURES   |  126                                                                    |

----

|  | • | references to "BioLineRx," the "Company," "us," "we" and "our" refer to BioLineRx Ltd., an Israeli company, and its consolidated subsidiaries; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | references to "ordinary shares," "our shares" and similar expressions refer to the Company's ordinary shares, NIS 0.10 nominal (par) value per share; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | references to "ADS" refer to the Company's American Depositary Shares; |
|--|---------|------------------------------------------------------------------------|

|  | • | references to "dollars," "U.S. dollars" and "$" are to United States Dollars; |
|--|---------|-------------------------------------------------------------------------------|

|  | • | references to "shekels" and "NIS" are to New Israeli Shekels, the Israeli currency; |
|--|---------|-------------------------------------------------------------------------------------|

|  | • | references to the "Companies Law" are to Israel's Companies Law, 5759-1999, as amended; and |
|--|---------|---------------------------------------------------------------------------------------------|

|  | • | references to the "SEC" are to the United States Securities and Exchange Commission. |
|--|---------|--------------------------------------------------------------------------------------|

|  | • | the initiation, timing, progress and results of our preclinical studies, clinical trials and other therapeutic candidate development efforts; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our ability to advance our therapeutic candidates into clinical trials or to successfully complete our preclinical studies or clinical trials; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | our receipt of regulatory approvals for our therapeutic candidates, and the timing of other regulatory filings and approvals; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------|

|  | • | the clinical development, commercialization and market acceptance of our therapeutic candidates; |
|--|---------|--------------------------------------------------------------------------------------------------|

|  | • | our ability to establish and maintain corporate collaborations and integrate new therapeutic candidates and new personnel; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------|

|  | • | the interpretation of the properties and characteristics of our therapeutic candidates and of the results obtained with our therapeutic candidates in preclinical studies or clinical trials; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the implementation of our business model and strategic plans for our business and therapeutic candidates; |
|--|---------|-----------------------------------------------------------------------------------------------------------|

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|  | • | the scope of protection we are able to establish and maintain for intellectual property rights covering our therapeutic candidates and our ability to operate our business without infringing the intellectual property rights of others; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | estimates of our expenses, future revenues, capital requirements and our needs for additional financing; |
|--|---------|----------------------------------------------------------------------------------------------------------|

|  | • | competitive companies, technologies and our industry; and |
|--|---------|-----------------------------------------------------------|

|  | • | statements as to the impact of the political and security situation in Israel on our business. |
|--|---------|------------------------------------------------------------------------------------------------|

----

|                                                                |   | Year Ended December 31,                                         |       |
|---------------------------------------------------------------------|--------|-----------------------------------------------------------------|------------|
| Consolidated Statements of Operations Data:(1) (2)                  |   | 2012                                                            |       |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | 2016 |   |
|                                                                |   | (in thousands of U.S. dollars, except share and per share data) |       |
|                                                                |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Research and development expenses, net                              |   |                                                            | (16,677    | ) |   |   | (12,208 | ) |   |   | (11,866 | ) |   |   | (11,489 | ) |   |   | (11,177 | ) |
| Sales and marketing expenses                                        |   |                                                            | (837       | ) |   |   | (1,136 | ) |   |   | (1,589 | ) |   |   | (1,003 | ) |   |   | (1,352 | ) |
| General and administrative expenses                                 |   |                                                            | (3,638     | ) |   |   | (3,664 | ) |   |   | (3,800 | ) |   |   | (3,704 | ) |   |   | (3,984 | ) |
| Operating loss                                                 |   |                                                            | (21,152    | ) |   |   | (17,008 | ) |   |   | (17,255 | ) |   |   | (16,196 | ) |   |   | (16,513 | ) |
| Non-operating income, net                                           |   |                                                            | 1,026      |   |   |   | 1,161 |   |   |   | 3,061 |   |   |   | 1,445 |   |   |   | 214 |   |
| Financial income                                               |   |                                                            | 2,287      |   |   |   | 720 |   |   |   | 3,566 |   |   |   | 457 |   |   |   | 480 |   |
| Financial expenses                                             |   |                                                            | (1,942     | ) |   |   | (1,897 | ) |   |   | (448 | ) |   |   | (106 | ) |   |   | (22 | ) |
| Net loss                                                       |   |                                                            | (19,781    | ) |   |   | (17,024 | ) |   |   | (11,076 | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
| Other comprehensive income (loss):                                  |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency translation differences                                    |   |                                                            | (7         | ) |   |   | 1,097 |   |   |   | (2,834 | ) |   |   | – |   |   |   | – |   |
| Comprehensive loss                                             |   |                                                            | (19,788    | ) |   |   | (15,927 | ) |   |   | (13,910 | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
| Net loss per ordinary share                                         |   |                                                            | (1.17      | ) |   |   | (0.76 | ) |   |   | (0.34 | ) |   |   | (0.28 | ) |   |   | (0.28 | ) |
| Number of ordinary shares used in computing loss per ordinary share |   |                                                            | 16,940,473 |   |   |   | 22,488,516 |   |   |   | 32,433,883 |   |   |   | 51,406,434 |   |   |   | 56,144,727 |   |

|                               |   | As of December 31,             |   |
|------------------------------------|--------|--------------------------------|--------|
| Consolidated Balance Sheet Data:   |   | 2012                           |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | 2016 |   |
|                               |   | (in thousands of U.S. dollars) |   |
| Cash and cash equivalents          |   |                           | 18,307 |   |   |   | 8,899 |   |   |   | 5,790 |   |   |   | 5,544 |   |   |   | 2,469 |   |
| Short-term bank deposits           |   |                           | 3,070  |   |   |   | 9,319 |   |   |   | 28,890 |   |   |   | 42,119 |   |   |   | 33,154 |   |
| Property, plant and equipment, net |   |                           | 850    |   |   |   | 712 |   |   |   | 721 |   |   |   | 2,909 |   |   |   | 2,605 |   |
| Total assets                  |   |                           | 24,325 |   |   |   | 20,014 |   |   |   | 36,211 |   |   |   | 51,302 |   |   |   | 38,939 |   |
| Total liabilities             |   |                           | 9,343  |   |   |   | 8,292 |   |   |   | 4,406 |   |   |   | 3,692 |   |   |   | 3,912 |   |
| Total shareholders’ equity   |   |                           | 14,982 |   |   |   | 11,722 |   |   |   | 31,805 |   |   |   | 47,610 |   |   |   | 35,027 |   |

| (1) | Data on diluted loss per share was not presented in the financial statements because the effect of the exercise of the options is either immaterial or is anti-dilutive. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | In June 2015, we effected a 1:10 reverse split of our ordinary shares. All share and per share amounts have ~~ ~~been retroactively adjusted to reflect the reverse split as if it had been effected prior to the earliest financial statement period included herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | · | a therapeutic candidate or medical device may not prove safe or efficacious; |
|--|--------|------------------------------------------------------------------------------|

|  | · | the results with respect to any therapeutic candidate may not confirm the positive results from earlier preclinical studies or clinical trials; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the results may not meet the level of statistical significance required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities; and |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the results will justify only limited and/or restrictive uses, including the inclusion of warnings and contraindications, which could significantly limit the marketability and profitability of the therapeutic candidate. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | delays in securing clinical investigators or trial sites for the clinical trials; |
|--|--------|-----------------------------------------------------------------------------------|

|  | · | delays in obtaining institutional review board and other regulatory approvals to commence a clinical trial; |
|--|--------|-------------------------------------------------------------------------------------------------------------|

----

|  | · | slower than anticipated patient recruitment and enrollment; |
|--|--------|-------------------------------------------------------------|

|  | · | negative or inconclusive results from clinical trials; |
|--|--------|--------------------------------------------------------|

|  | · | unforeseen safety issues; |
|--|--------|---------------------------|

|  | · | uncertain dosing issues; |
|--|--------|--------------------------|

|  | · | an inability to monitor patients adequately during or after treatment; and |
|--|--------|----------------------------------------------------------------------------|

|  | · | problems with investigator or patient compliance with the trial protocols. |
|--|--------|----------------------------------------------------------------------------|

|  | · | restrictions on such product, manufacturer or manufacturing process; |
|--|--------|----------------------------------------------------------------------|

|  | · | warning letters from the FDA or other regulatory authorities; |
|--|--------|---------------------------------------------------------------|

|  | · | withdrawal of the product from the market; |
|--|--------|--------------------------------------------|

|  | · | suspension or withdrawal of regulatory approvals; |
|--|--------|---------------------------------------------------|

|  | · | refusal to approve pending applications or supplements to approved applications that we or our licensees submit; |
|--|--------|------------------------------------------------------------------------------------------------------------------|

|  | · | voluntary or mandatory recall; |
|--|--------|--------------------------------|

|  | · | fines; |
|--|--------|--------|

|  | · | refusal to permit the import or export of our products; |
|--|--------|---------------------------------------------------------|

|  | · | product seizure or detentions; |
|--|--------|--------------------------------|

|  | · | injunctions or the imposition of civil or criminal penalties; or |
|--|--------|------------------------------------------------------------------|

|  | · | adverse publicity. |
|--|--------|--------------------|

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|  | · | we have limited control over the amount and timing of resources that our licensees devote to our therapeutic candidates; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------|

|  | · | our licensees may experience financial difficulties; |
|--|--------|------------------------------------------------------|

|  | · | our licensees may fail to secure adequate commercial supplies of our therapeutic candidates upon marketing approval, if at all; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------|

|  | · | our future revenues depend heavily on the efforts of our licensees; |
|--|--------|---------------------------------------------------------------------|

|  | · | business combinations or significant changes in a licensee’s business strategy may adversely affect the licensee’s willingness or ability to complete its obligations under any arrangement with us; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | a licensee could move forward with a competing therapeutic candidate developed either independently or in collaboration with others, including our competitors; and |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | out-licensing arrangements are often terminated or allowed to expire, which would delay the development and may increase the development costs of our therapeutic candidates. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|  | · | our inability to recruit and retain adequate numbers of effective sales and marketing personnel; |
|--|--------|--------------------------------------------------------------------------------------------------|

|  | · | the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our therapeutic candidates; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | unforeseen costs and expenses associated with creating and sustaining an independent sales and marketing organization. |
|--|--------|------------------------------------------------------------------------------------------------------------------------|

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|  | · | reliance on the third party for regulatory compliance and quality assurance; |
|--|--------|------------------------------------------------------------------------------|

|  | · | limitations on supply availability resulting from capacity and scheduling constraints of the third parties; |
|--|--------|-------------------------------------------------------------------------------------------------------------|

|  | · | impact on our reputation in the marketplace if manufacturers of our products, once commercialized, fail to meet customer demands; |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|  | · | the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and |
|--|--------|------------------------------------------------------------------------------------------------------------------|

|  | · | the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | · | difficulty in large-scale manufacturing; |
|--|--------|------------------------------------------|

|  | · | low market acceptance by physicians, healthcare payors, patients and the medical community as a result of lower demonstrated clinical safety or efficacy compared to other products, prevalence and severity of adverse side effects, or other potential disadvantages relative to alternative treatment methods; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | insufficient or unfavorable levels of reimbursement from government or third-party payors; |
|--|--------|--------------------------------------------------------------------------------------------|

|  | · | infringement on proprietary rights of others for which we or our licensees have not received licenses; |
|--|--------|--------------------------------------------------------------------------------------------------------|

|  | · | incompatibility with other therapeutic products; |
|--|--------|--------------------------------------------------|

|  | · | other potential advantages of alternative treatment methods; |
|--|--------|--------------------------------------------------------------|

|  | · | ineffective marketing and distribution support; |
|--|--------|-------------------------------------------------|

|  | · | significant changes in pricing due to pressure from public opinion, non-governmental organizations or governmental authorities |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------|

|  | · | lack of cost-effectiveness; or |
|--|--------|--------------------------------|

|  | · | timing of market introduction of competitive products. |
|--|--------|--------------------------------------------------------|

----

|  | · | a covered benefit under its health plan; |
|--|--------|------------------------------------------|

|  | · | safe, effective and medically necessary; |
|--|--------|------------------------------------------|

|  | · | appropriate for the specific patient; |
|--|--------|---------------------------------------|

|  | · | cost-effective; and |
|--|--------|---------------------|

|  | · | neither experimental nor investigational. |
|--|--------|-------------------------------------------|

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|  | · | announcements of technological innovations or new products by us or others; |
|--|--------|-----------------------------------------------------------------------------|

|  | · | announcements by us of significant acquisitions, strategic partnerships, in-licensing, out-licensing, joint ventures or capital commitments; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | expiration or terminations of licenses, research contracts or other collaboration agreements; |
|--|--------|-----------------------------------------------------------------------------------------------|

|  | · | public concern as to the safety of drugs we, our licensees or others develop; |
|--|--------|-------------------------------------------------------------------------------|

|  | · | general market conditions; |
|--|--------|----------------------------|

|  | · | the volatility of market prices for shares of biotechnology companies generally; |
|--|--------|----------------------------------------------------------------------------------|

|  | · | success of research and development projects; |
|--|--------|-----------------------------------------------|

|  | · | departure of key personnel; |
|--|--------|-----------------------------|

|  | · | developments concerning intellectual property rights or regulatory approvals; |
|--|--------|-------------------------------------------------------------------------------|

|  | · | variations in our and our competitors’ results of operations; |
|--|--------|---------------------------------------------------------------------|

|  | · | changes in earnings estimates or recommendations by securities analysts, if our ordinary shares or ADSs are covered by analysts; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------|

|  | · | statements about the Company made in the financial media or by bloggers on the Internet; |
|--|--------|------------------------------------------------------------------------------------------|

----

|  | · | changes in government regulations or patent decisions; |
|--|--------|--------------------------------------------------------|

|  | · | developments by our licensees; and |
|--|--------|------------------------------------|

|  | · | general market conditions and other factors, including factors unrelated to our operating performance. |
|--|--------|--------------------------------------------------------------------------------------------------------|

|  | · | the failure to obtain regulatory approval or achieve commercial success of our therapeutic candidates; |
|--|--------|--------------------------------------------------------------------------------------------------------|

|  | · | our success in effecting out-licensing arrangements with third-parties; |
|--|--------|-------------------------------------------------------------------------|

----

|  | · | our collaboration with Novartis and the extent that upfront licensing fees and program development costs would be covered by the option fees and equity investments paid by Novartis under this collaboration; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | our success in establishing other out-licensing or co-development arrangements; |
|--|--------|---------------------------------------------------------------------------------|

|  | · | the success of our licensees in selling products that utilize our technologies; |
|--|--------|---------------------------------------------------------------------------------|

|  | · | the results of our preclinical studies and clinical trials for our earlier stage therapeutic candidates, and any decisions to initiate clinical trials if supported by the preclinical results; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the costs, timing and outcome of regulatory review of our therapeutic candidates that progress to clinical trials; |
|--|--------|--------------------------------------------------------------------------------------------------------------------|

|  | · | the costs of establishing or acquiring specialty sales, marketing and distribution capabilities, if any of our therapeutic candidates are approved, and we decide to commercialize them ourselves; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our issued patents and defending intellectual property-related claims; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the extent to which we acquire or invest in businesses, products or technologies and other strategic relationships; and |
|--|--------|-------------------------------------------------------------------------------------------------------------------------|

|  | · | the costs of financing unanticipated working capital requirements and responding to competitive pressures. |
|--|--------|------------------------------------------------------------------------------------------------------------|

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|  | • | continually build our pipeline of therapeutic candidates; |
|--|---------|-----------------------------------------------------------|

|  | • | advance those therapeutic candidates with the greatest potential; |
|--|---------|-------------------------------------------------------------------|

|  | • | quickly identify, and terminate the development of, unattractive therapeutic candidates; and |
|--|---------|----------------------------------------------------------------------------------------------|

|  | • | avoid dependency on a small number of therapeutic candidates. |
|--|---------|---------------------------------------------------------------|

|  | • | Support the successful development and commercialization of therapeutic candidates that have already been partnered. We currently have seven programs at various stages of development in our pipeline that have already been partnered or under collaboration. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Commercialize additional therapeutic candidates through out-licensing or co-development arrangements or, where appropriate, by ourselves. We intend to commercialize many of our other products through out-licensing or co-development arrangements with third parties who may perform any or all of the following tasks: completing development, securing regulatory approvals, securing reimbursement codes from insurance companies and Health Maintenance Organizations, manufacturing and/or marketing. If appropriate, we may also enter into co-development and similar arrangements with respect to any therapeutic candidate with third parties or commercialize a therapeutic candidate ourselves. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Design development programs that reach critical decisions quickly. At each step of our screening process for therapeutic candidates, a candidate is subjected to rigorous feasibility testing and potential advancement or termination. We believe our feasibility approach reduces costs and increases the probability of commercial success by eliminating less promising candidates quickly before advancing them into more costly preclinical and clinical programs. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Use our expertise and proven screening methodology to evaluate in-licensing opportunities. In order to review and select among various candidates efficiently and effectively, we employ a rigorous screening system we developed. In certain instances, our Scientific Advisory Board and disease-specific third-party advisors evaluate therapeutic candidates, as deemed necessary. In addition, projects under the Novartis collaboration benefit from additional review and assessment by Novartis. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Leverage and expand our relationships with research institutes, academic institutions and biotechnology companies, including the specific strategic relationships that we have developed with Israeli research and academic institutions, to identify and in-license promising therapeutic candidates. To date, we have successfully in-licensed compounds from many major Israeli universities, as well as from many Israeli hospitals, technology incubators and biotechnology companies. We continue to maintain close contacts with university technology transfer offices, research and development authorities, university faculty, and many biotechnology companies to actively seek out early stage compounds. In addition, we actively source and evaluate non-Israeli compounds. In line with this strategy, in March 2017 we announced our acquisition of Agalimmune. Agalimmune’s primary asset, AGI-134, is a near-clinical immuno-oncology agent for various cancer indications. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Seek to co-develop certain pre-clinical and early clinical therapeutic projects through clinical proof-of-concept by means of our multi-year strategic collaboration agreement with Novartis. Pursuant to an agreement entered into in December 2014, Novartis will evaluate jointly with us both clinical and pre-clinical stage projects presented by us via a Joint Steering Committee, which will determine which projects to advance further in development and on what terms. Projects at or reaching the clinical stage will be eligible for selection by Novartis. Upon selection of a project, Novartis will pay us an option fee of $5 million, as well as fund 50% of the anticipated remaining development costs associated with establishing clinical proof-of-concept, in the form of an additional equity investment in BioLineRx. A limited number of projects in pre-clinical stages are also eligible for flagging by Novartis, for initial development by BioLineRx. Such projects, once reaching the clinical stage, will be eligible for selection by Novartis under the terms set forth above. The companies intend to develop up to three clinical-stage programs pursuant to this collaboration. Under the terms of the agreement, Novartis acquired 5,000,000 of our ADSs in a private transaction at a price of $2.00 per ADS, for a total equity investment of $10 million, and agreed to certain standstill provisions. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | • | Revenue sharing payments. These are payments to be made to licensors with respect to revenue we receive from sub-licensing to third parties for further development and commercialization of our drug products. These payments are generally fixed at a percentage of the total revenues we earn from these sublicenses. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Milestone payments. These payments are generally linked to the successful achievement of milestones in the development and approval of drugs, such Phases 1, 2 and 3 of clinical trials and approvals of new drug applications, or NDAs. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Royalty payments. To the extent we elect to complete the development, licensing and marketing of a therapeutic candidate, we are generally required to pay our licensors royalties on the sales of the end drug product. These royalty payments are generally based on the net revenue from these sales. In certain instances, the rate of the royalty payments decrease upon the expiration of the drug's underlying patent and its transition into a generic drug. Certain of our agreements provide that if a licensed drug product is developed and sold through a different corporate entity, the licensors may elect to receive shares in such company instead of a portion of the royalties. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Additional payments. In addition to the above payments, certain of our in-license agreements provide for a one-time or periodic payment that is not linked to milestones. Periodic payments may be paid until the commercialization of the product, either by direct sales or sublicenses to third parties. Other agreements provide for the continuation of these payments even following the commercialization of the licensed drug product. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | • | With respect to BL-8040, we have an exclusive license to two patent families that cover the molecule that is the active ingredient of our proprietary drug.  Patents and patent applications of these families have been granted or are pending in the United States, Europe, Japan and Canada. The patents and any patents to issue in the future based on pending patent applications in these families will expire in 2023 (in the United States) and 2021 (in other countries), plus any applicable patent term extension, which may add an additional term of up to 5 years on the patent.  In addition, we have an exclusive license to seven other patent families pending worldwide directed to the use of BL-8040 for the treatment of certain types of cancer and other indications. Furthermore, we have Orphan Drug status for both AML and stem cell mobilization, as well as data exclusivity protection afforded to BL-8040 as a new chemical entity, or NCE. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | With respect to AGI-134, Agalimmune owns or has an exclusive license to three patent families that cover a genus of compounds including AGI-134, methods of using compounds, including AGI-134, and for a pharmaceutical composition that contains AGI-134.  Patents have been granted in the families that cover a genus of compounds including AGI-134 and methods of using compounds including AGI-134, in the United States and Japan and will expire in 2025 and 2026.  Applications in these families are pending in China, Europe, and other countries that would have the same expiration, if granted.  Patent applications are pending in the third family in the US, China, Europe, Japan, and other countries that, if granted, would cover a pharmaceutical composition that contains AGI-134 and expire in 2035.  In addition, the future drug product could be eligible for obtaining regulatory NCE exclusivity (five years data exclusivity in the USA, 10-11 years marketing exclusivity in Europe, eight years marketing exclusivity in Japan). |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | With respect to BL-5010, we have an exclusive license to a patent family directed to a novel applicator uniquely configured for applying the BL-5010 composition to targeted skin tissue safely and effectively. Patents applications of this family are pending in the United States, Israel, Europe, Japan, Canada, China, Russia and Australia. Patents to issue will expire in 2034. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | • | screen certain potential relevant in-licensing and current therapeutic candidates; |
|--|---------|------------------------------------------------------------------------------------|

|  | • | oversee our research and development programs; |
|--|---------|------------------------------------------------|

|  | • | address specific scientific and technical issues relevant to the field; and |
|--|---------|-----------------------------------------------------------------------------|

|  | • | review certain strategic decisions we may consider related to the field. |
|--|---------|--------------------------------------------------------------------------|

----

| Name                              |   | Position/Institutional Affiliation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| J. Aaron Ciechanover, M.D., Ph.D. |   | Professor Ciechanover is a Distinguished University Professor at the Rappaport Faculty of Medicine of the Technion and the co-director of the Technion Integrated Cancer Center. He shared the 2004 Nobel Prize in Chemistry with Professors Avram Hershko and Irwin Rose for the discovery of ubiquitin-mediated protein degradation. Among his many other prizes are the Israel Prize in Biological Research (2003) and the Albert Lasker Award for Basic Medical research (2000).  He is a member of numerous learned societies, among them the Israeli Academy of Sciences and Humanities and the National Academies of Sciences and of Medicine of the USA (Foreign Associate). Professor Ciechanover was also a member of our original Scientific Advisory Board.                                                                                                                                                                |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Jorge Eduardo Cortes, M.D.        |   | Dr. Cortes is Professor of Medicine, Deputy Chair, and Chief of the CML and AML Sections of the Department of Leukemia at The University of Texas, MD Anderson Cancer Center (MDACC). Dr. Cortes has authored hundreds of peer-reviewed manuscripts, abstracts, book chapters, and other medical publications. He is an associate editor for the medical journal, Blood and serves on the editorial board of other journals such as the Journal of Clinical Oncology, the American Journal of Hematology and Clinical Cancer Research. In addition, Dr. Cortes serves on the Board of the International CML Foundation. Dr. Cortes has received numerous awards including The Service to Mankind Award from the Leukemia and Lymphoma Society and the Faculty Scholar Award from the MDACC for clinical research and for education.                                                                                                         |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Debasish Roychowdhury, M.D.       |   | Dr. Roychowdhury is a leader in the pharmaceutical industry with a strong background in oncology research and development, and regulatory and commercial operations, having previously served in key senior leadership roles at Sanofi, GlaxoSmithKline and Eli Lilly. Dr. Roychowdhury has a distinguished track record in the field of oncology having been involved in the approval of nine oncology drugs, including Almita, Tykerb and Jevtana. Currently, he is President of Nirvan Consultants, LLC and in this capacity he serves in senior advisory roles for biotechnology companies to help advance their pipeline of therapeutic medicines. Dr. Roychowdhury also serves as a member of the Board of Directors for Lytix Biopharma AS, Celyad SA, Fund+ and Radius Health, Inc. In his academic career, Dr. Roychowdhury served as a faculty member at the University of Cincinnati.                                            |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Yosef Yarden, Ph.D.               |   | Professor Yarden is The Harold and Zelda Goldenberg Chair of Molecular Cell Biology of the Weizmann Institute of Science. He is a member of the Israel Academy of Sciences and Humanities and Past President of the Federation of the Israel Societies of Experimental Biology. Among his many awards, he has received the Susan G. Komen for the Cure® Brinker Award for Scientific Distinction in Basic Research, the Leopold Griffuel Award of Fondation ARC pour la Recherche sur le Cancer, and the Ernst W. Bertner Memorial Award of the MD Anderson Cancer Center. Professor Yarden is expected to be awarded the Israel Prize in Life Science Research in May 2017. Professor Yarden is also a member of the European Molecular Biology Organization, the European Cancer Academy and the Asia-Pacific International Molecular Biology Network. Professor Yarden was also a member of our original Scientific Advisory Board. |

----

----

----

----

|  | • | preclinical laboratory tests, animal studies and formulation development; |
|--|---------|---------------------------------------------------------------------------|

|  | • | submission to the FDA of a request for an IND to conduct human clinical testing; |
|--|---------|----------------------------------------------------------------------------------|

|  | • | adequate and well controlled clinical trials to determine the safety and efficacy of the drug for each indication as well as to establish the exposure levels; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | submission to the FDA of an NDA; |
|--|---------|----------------------------------|

|  | • | a potential public hearing of an outside advisory committee to discuss the application; |
|--|---------|-----------------------------------------------------------------------------------------|

|  | • | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is manufactured; and |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------|

|  | • | FDA review and approval of the NDA. |
|--|---------|-------------------------------------|

----

----

----

----

|  | • | Class I: general controls, such as labeling and adherence to QSRs. Some Class I medical devices require 510(k) pre-market notification although most are exempt; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Class II: general controls, 510(k) pre-market notification, and specific controls such as performance standards, patient registries, and postmarket surveillance; and |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Class III: general controls and approval of a pre-market approval, or PMA. |
|--|---------|----------------------------------------------------------------------------|

----

|  | · | the rules for conducting clinical trials are consistent throughout the EU; |
|--|--------|----------------------------------------------------------------------------|

|  | · | transparent information is made publicly available on the authorization, conduct, and results of each clinical trial carried out in the EU. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|  | • | having the same qualitative and quantitative composition in active substance as the reference medicinal product; |
|--|---------|------------------------------------------------------------------------------------------------------------------|

|  | • | having the same pharmaceutical form as the reference medicinal product; and |
|--|---------|-----------------------------------------------------------------------------|

|  | • | whose bioequivalence with the reference medicinal product has been demonstrated by appropriate bioavailability studies. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

----

| Project                                           |  Status                                                                                                           |  Expected Near Term Milestones                                                                                                                       |
|---------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| BL-8040        | 1.                                                                                                                     | Phase 2a study for relapsed or refractory AML completed                                                                                                   | 1. |  Follow-up for overall survival rate is ongoing |
| 2.                                                | Phase 2b consolidation treatment for AML ongoing                                                                       | 2.                                                                                                                                                        | Completion of enrollment and possible interim analysis results expected in H2 2018; top-line results expected in H2 2019 |
| 3.                                                | Phase 2 study in stem cell mobilization ongoing                                                                        | 3.                                                                                                                                                        | Top-line results expected in Q4 2017. |
| 4.                                                | Phase 2a study in pancreatic cancer, in collaboration with Merck, initiated                                            | 4.                                                                                                                                                        | Partial results expected in H2 2017; top-line results expected in H2 2018 |
| 5.                                                | Phase 2b study in pancreatic cancer, in collaboration with MD Anderson Cancer Center                                   | 5.                                                                                                                                                        | Top-line results expected in H2 2018 |
| 6.                                           | Phase 1b study in AML, in collaboration with Genentech                                                                 | 6.                                                                                                                                                        | Commencement of study expected in H2 2017; top-line results expected in 2019 |
| 7.                                                | Phase 1b studies in various solid tumors, in collaboration with Genentech                                              | 7.                                                                                                                                                        | Commencement of studies expected in H2 2017; top-line results expected in 2019 |
| 8.                                                | Phase 3 registration study in autologous stem cell mobilization                                                        | 8.                                                                                                                                                        | Commencement of study expected in H2 2017 |
| AGI-134                                           | Near-clinical development studies                                                                                      | Regulatory submission for first-in-man study expected in H2 2017; commencement of study expected in H1 2018                                               |
| BL-5010                                           | Out-licensed to Omega Pharma; CE mark approval obtained; commercial launch of first OTC indication in Europe commenced | Gradual full roll-out of commercial launch over next two years; pursuit of potential out-licensing partner(s) for OTC and non-OTC rights still held by us |

----

|                      |   | Year Ended December 31, |   |   | Total CostsSince Project |   |
|---------------------------|--------|-------------------------|--------|--------|--------------------------|--------|
|                      |   | 2014                    |   |   | 2015                     |   |   | 2016 |   |   | Inception |   |
|                      |   | (U.S. $ in thousands)   |   |
|                      |   |                    |   |   |                     |   |   |   |   |   |   |   |
| BL-8040              |   |                    | 4,698  |   |                     |   | 7,045 |   |   |   | 8,281 |   |   |   | 24,657 |   |
| BL-7010                   |   |                    | 3,756  |   |                     |   | 1,657 |   |   |   | 1,471 |   |   |   | 9,623 |   |
| BL-5010              |   |                    | 1,282  |   |                     |   | 400 |   |   |   | 75 |   |   |   | 4,144 |   |
| Other projects       |   |                    | 1,537  |   |                     |   | 1,916 |   |   |   | 1,176 |   |   |   | 104,508 |   |
| Total project costs  |   |                    | 11,273 |   |                     |   | 11,018 |   |   |   | 11,003 |   |   |   | 142,932 |   |

|  | • | the number of sites included in the clinical trials; |
|--|---------|------------------------------------------------------|

|  | • | the length of time required to enroll suitable patients; |
|--|---------|----------------------------------------------------------|

|  | • | the cost of drug substance/product manufacturing, storage and shipment; |
|--|---------|-------------------------------------------------------------------------|

|  | • | the number of patients that participate in the clinical trials; |
|--|---------|-----------------------------------------------------------------|

|  | • | the duration of patient follow-up; |
|--|---------|------------------------------------|

|  | • | whether the patients require hospitalization or can be treated on an out-patient basis; |
|--|---------|-----------------------------------------------------------------------------------------|

|  | • | the development stage of the therapeutic candidate; and |
|--|---------|---------------------------------------------------------|

|  | • | the efficacy and safety profile of the therapeutic candidate. |
|--|---------|---------------------------------------------------------------|

----

----

|  | • | The Company has transferred to the licensee the significant risks and rewards of ownership of the patents and intellectual property. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | • | The Company does not retain either the continuing managerial involvement to the degree usually associated with ownership or the effective control over the patent and intellectual property. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | The amount of revenue can be measured reliably. |
|--|---------|-------------------------------------------------|

|  | • | It is probable that the economic benefits associated with the transaction will flow to the Company. |
|--|---------|-----------------------------------------------------------------------------------------------------|

|  | • | The costs incurred or to be incurred in respect of the sale can be measured reliably. |
|--|---------|---------------------------------------------------------------------------------------|

----

----

----

|                                   |   | Three Months Ended             |    |
|----------------------------------------|--------|--------------------------------|---------|
|                                   |   | March 31                       |    |   | June 30 |   |   | Sept. 30 |   |   | Dec. 31 |   |   | March 31 |   |   | June 30 |   |   | Sept. 30 |   |   | Dec. 31 |   |
|                                   |   | 2015                           |    |   | 2016 |   |
|                                   |   | (in thousands of U.S. dollars) |    |
| Consolidated Statements of Operations  |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                          |   |                           | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Cost of revenues                  |   |                           | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |   |   | – |   |
| Research and development expenses, net |   |                           | (3,211  | ) |   |   | (2,891 | ) |   |   | (2,576 | ) |   |   | (2,811 | ) |   |   | (2,539 | ) |   |   | (2,740 | ) |   |   | (2,954 | ) |   |   | (2,944 | ) |
| Sales and marketing expenses           |   |                           | (260    | ) |   |   | (299 | ) |   |   | (265 | ) |   |   | (179 | ) |   |   | (248 | ) |   |   | (272 | ) |   |   | (409 | ) |   |   | (423 | ) |
| General and administrative expenses    |   |                           | (856    | ) |   |   | (976 | ) |   |   | (762 | ) |   |   | (1,110 | ) |   |   | (989 | ) |   |   | (854 | ) |   |   | (1,125 | ) |   |   | (1,016 | ) |
| Operating loss                    |   |                           | (4,327  | ) |   |   | (4,166 | ) |   |   | (3,603 | ) |   |   | (4,100 | ) |   |   | (3,776 | ) |   |   | (3,866 | ) |   |   | (4,488 | ) |   |   | (4,383 | ) |
| Non-operating income (expenses), net   |   |                           | (40     | ) |   |   | (847 | ) |   |   | 1,983 |   |   |   | 349 |   |   |   | 148 |   |   |   | 48 |   |   |   | (14 | ) |   |   | 32 |   |
| Financial income, net                  |   |                           | 73      |   |   |   | 205 |   |   |   | 85 |   |   |   | 98 |   |   |   | 143 |   |   |   | 88 |   |   |   | 172 |   |   |   | 77 |   |
| Financial expenses, net                |   |                           | (17     | ) |   |   | (2 | ) |   |   | (91 | ) |   |   | – |   |   |   | (4 | ) |   |   | (5 | ) |   |   | (4 | ) |   |   | (9 | ) |
| Net loss                               |   |                           | (4,311  | ) |   |   | (4,810 | ) |   |   | (1,626 | ) |   |   | (3,653 | ) |   |   | (3,489 | ) |   |   | (3,735 | ) |   |   | (4,334 | ) |   |   | (4,283 | ) |

----

|  | • | the progress and costs of our preclinical studies, clinical trials and other research and development activities; |
|--|---------|-------------------------------------------------------------------------------------------------------------------|

|  | • | the scope, prioritization and number of our clinical trials and other research and development programs; |
|--|---------|----------------------------------------------------------------------------------------------------------|

|  | • | the amount of revenues we receive under our collaboration or licensing arrangements; |
|--|---------|--------------------------------------------------------------------------------------|

|  | • | the costs of the development and expansion of our operational infrastructure; |
|--|---------|-------------------------------------------------------------------------------|

|  | • | the costs and timing of obtaining regulatory approval of our therapeutic candidates; |
|--|---------|--------------------------------------------------------------------------------------|

|  | • | the ability of our collaborators to achieve development milestones, marketing approval and other events or developments under our collaboration agreements; |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; |
|--|---------|-----------------------------------------------------------------------------------------------------------------|

|  | • | the costs and timing of securing manufacturing arrangements for clinical or commercial production; |
|--|---------|----------------------------------------------------------------------------------------------------|

|  | • | the costs of establishing sales and marketing capabilities or contracting with third parties to provide these capabilities for us; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the costs of acquiring or undertaking development and commercialization efforts for any future product candidates; |
|--|---------|--------------------------------------------------------------------------------------------------------------------|

|  | • | the magnitude of our general and administrative expenses; |
|--|---------|-----------------------------------------------------------|

|  | • | any cost that we may incur under current and future licensing arrangements relating to our therapeutic candidates; and |
|--|---------|------------------------------------------------------------------------------------------------------------------------|

|  | • | payments to the OCS. |
|--|---------|----------------------|

----

|                               |   | Total                          |   |   | Less than 1 year |   |   | 1-3 years |   |   | 4-5 years |   |   | More than 5 years |    |
|------------------------------------|--------|--------------------------------|--------|--------|------------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-------------------|---------|
|                               |   | (in thousands of U.S. dollars) |   |
|                               |   |                           |   |   |             |   |   |      |   |   |      |   |   |              |    |
| Car leasing obligations       |   |                           | 808    |   |             |   | 228    |      |   |   | 456       |   |   |              | 125     |   |   |   | – |   |
| Premises leasing obligations  |   |                           | 315    |   |             |   | 180    |      |   |   | 135       |   |   |              | – |   |   |   | – |   |
| Purchase commitments          |   |                           | 4,447  |   |             |   | 3,036  |      |   |   | 1,399     |   |   |              | 12      |   |   |   | – |   |
| Total                         |   |                           | 5,570  |   |             |   | 3,444  |      |   |   | 1,990     |   |   |              | 137     |   |   |   | – |   |

----

| Name                           |   | Age    |   | Position(s)                                 |
|--------------------------------|--------|--------|--------|---------------------------------------------|
|                           |   |   |   |                                        |
| Philip Serlin, CPA, MBA   |   | 56     |   | Chief Executive Officer                     |
|                           |   |   |   |                                        |
| Mali Zeevi, CPA                |   | 41     |   | Chief Financial Officer                     |
|                           |   |   |   |                                        |
| David Malek, MBA          |   | 39     |   | Chief Business Officer                      |
|                           |   |   |   |                                        |
| Ella Sorani, Ph.D.        |   | 49     |   | Vice President Development                  |
|                           |   |   |   |                                        |
| Abi Vainstein-Haras, M.D       |   | 42     |   | Vice President Clinical and Medical Affairs |
|                           |   |   |   |                                        |
| Aharon Schwartz, Ph.D.    |   | 74     |   | Chairman of the Board                       |
|                           |   |   |   |                                        |
| Michael J. Anghel, Ph.D.  |   | 77     |   | Director                                    |
|                           |   |   |   |                                        |
| Nurit Benjamini, MBA      |   | 50     |   | External Director                           |
|                           |   |   |   |                                        |
| B.J. Bormann, Ph.D.            |   | 58     |   | Director                                    |
|                           |   |   |   |                                        |
| Raphael Hofstein, Ph.D.   |   | 67     |   | Director                                    |
|                           |   |   |   |                                        |
| Avraham Molcho, M.D.      |   | 59     |   | External Director                           |
|                           |   |   |   |                                        |
| Sandra Panem, Ph.D.            |   | 70     |   | Director                                    |

----

----

----

|                                                                     |   | Salaries, fees, commissions and bonuses |      |   | Pension, retirement, options and other similar benefits |   |
|--------------------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|---------------------------------------------------------|--------|
|                                                                     |   | (USD in thousands)                      |      |
| All directors and senior management as a group, consisting of 13 persons |   |                                    | 1,456,285 |   |                                                    |   | 772,672 |   |

| Name and Position                                                         | Salary                         | Social benefits(1) | Bonuses | Value of Options Granted(2) | All OtherCompensation(3) | Total |
|---------------------------------------------------------------------------|--------------------------------|--------------------|---------|-----------------------------|--------------------------|-------|
|                                                                      | (in thousands of U.S. dollars) |
| Kinneret Savitsky,Chief Executive Officer (until October 9, 2016)         | 184                            | 39                 | 40      | 24                          | 94                       | 381   |
| Philip Serlin, Chief Executive Officer (beginning October 10, 2016)       | 188                            | 50                 | 116     | 105                         | 24                       | 483   |
| David Malek, Chief Business Officer                                       | 151                            | 36                 | 93      | 90                          | 17                       | 387   |
| Arnon Aharon, Vice President of Medical Affairs (until November 30, 2016) | 129                            | 41                 | − | 71                          | 29                       | 270   |
| Mali Zeevi, Chief Financial Officer (beginning October 10, 2016)          | 113                            | 33                 | 21      | 53                          | 19                       | 239   |

| (1) | "Social Benefits" include payments to the National Insurance Institute, advanced education funds, managers' insurance and pension funds; vacation pay; and recuperation pay as mandated by Israeli law. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | Consists of amounts recognized as share-based compensation expense on the Company's statement of comprehensive loss for the year ended December 31, 2016. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | "All Other Compensation" includesautomobile-related expenses pursuant to the Company's automobile leasing program, telephone, basic health insurance and holiday presents. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | the majority of the shares that are voted at the meeting, including at least a majority of the shares held by non-controlling shareholders who do not have a personal interest in the election of the external director (other than a personal interest not deriving from a relationship with a controlling shareholder) who voted at the meeting, excluding abstentions, vote in favor of the election of the external director; or |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the total number of shares held by non-controlling, disinterested shareholders (as described in the preceding bullet point) that are voted against the election of the external director does not exceed 2% of the aggregate voting rights in the company. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | an employment relationship; |
|--|---------|-----------------------------|

|  | • | a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships); |
|--|---------|----------------------------------------------------------------------------------------------------------------------------|

|  | • | control; and |
|--|---------|--------------|

|  | • | service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the public offering. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | • | the chairman of the company's board of directors; |
|--|---------|---------------------------------------------------|

|  | • | a controlling shareholder or a relative of a controlling shareholder of the company (as each such term is defined in the Companies Law); or |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | any director employed by the company, by a controlling shareholder of the company or by any other entity controlled by a controlling shareholder of the company, or any director who provides services to the company, to a controlling shareholder of the company or to any other entity controlled by a controlling shareholder of the company on a regular basis (other than as a member of the board of directors), or any other director whose main source of income derives from a controlling shareholder of the company. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | he or she meets the qualifications for being appointed as an external director, except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications; and |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in the service shall not be deemed to interrupt the continuation of the service. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | oversight of the company's independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of the our independent registered public accounting firm to our Board of Directors in accordance with Israeli law; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | recommending the engagement or termination of the office of the our internal auditor; and |
|--|---------|-------------------------------------------------------------------------------------------|

|  | • | reviewing and pre-approving the terms of audit and non-audit services provided by our independent auditors. |
|--|---------|-------------------------------------------------------------------------------------------------------------|

----

|  | • | the chairman of the company's board of directors; |
|--|---------|---------------------------------------------------|

|  | • | a controlling shareholder or a relative of a controlling shareholder of the company (as each such term is defined in the Companies Law); or |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | any director employed by the company, by a controlling shareholder of the company or by any other entity controlled by a controlling shareholder of the company, or any director who provides services to the company on a permanent basis, to a controlling shareholder of the company or to any other entity controlled by a controlling shareholder of the company on a regular basis (other than as a member of the board of directors), or any other director whose main source of income derives from a controlling shareholder of the company. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | to make recommendations to the board of directors as to a compensation policy for officers, as well as to recommend once every three years to extend the compensation policy, subject to receipt of the required corporate approvals; |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | to make recommendations to the board of directors as to any updates to the compensation policy which may be required; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------|

|  | • | to review the implementation of the compensation policy by the company; |
|--|---------|-------------------------------------------------------------------------|

----

|  | • | to approve transactions relating to terms of office and employment of certain company office holders, which require the approval of the compensation committee pursuant to the Companies Law; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | to exempt, under certain circumstances, a transaction relating to terms of office and employment from the requirement of approval of the shareholders meeting; and |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (i) | the majority of the votes includes at least a majority of all the votes of shareholders who are not controlling shareholders of the company or who do not have a personal interest in the compensation policy and participating in the vote; abstentions shall not be included in the total of the votes of the aforesaid shareholders; or |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | the total of opposing votes from among the shareholders described in subsection (i) above does not exceed 2% of all the voting rights in the company. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | • | a person (or a relative of a person) who holds more than 5% of the company's shares; |
|--|---------|--------------------------------------------------------------------------------------|

|  | • | a person (or a relative of a person) who has the power to appoint a director or the general manager of the company; |
|--|---------|---------------------------------------------------------------------------------------------------------------------|

|  | • | an executive officer or director of the company; or |
|--|---------|-----------------------------------------------------|

|  | • | a member of the company's independent accounting firm. |
|--|---------|--------------------------------------------------------|

|  | • | information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | • | all other important information pertaining to these actions. |
|--|---------|--------------------------------------------------------------|

----

|  | • | refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | refrain from any activity that is competitive with the business of the company; |
|--|---------|---------------------------------------------------------------------------------|

|  | • | refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself or others; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | disclose to the company any information or documents relating to the company's affairs which the office holder received as a result of his or her position as an office holder. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a transaction other than in the ordinary course of business; |
|--|---------|--------------------------------------------------------------|

|  | • | a transaction that is not on market terms; or |
|--|---------|-----------------------------------------------|

|  | • | a transaction that may have a material impact on the company's profitability, assets or liabilities. |
|--|---------|------------------------------------------------------------------------------------------------------|

----

----

|  | • | at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | an amendment to the articles of association; |
|--|---------|----------------------------------------------|

|  | • | an increase in the company's authorized share capital; |
|--|---------|--------------------------------------------------------|

|  | • | a merger; and |
|--|---------|---------------|

----

|  | • | the approval of related party transactions and acts of office holders that require shareholder approval. |
|--|---------|----------------------------------------------------------------------------------------------------------|

|  | • | financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator's award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company's activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria; |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | reasonable litigation expenses, including attorneys' fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | reasonable litigation expenses, including attorneys' fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a breach of duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a breach of duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; and |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a financial liability imposed on the office holder in favor of a third party. |
|--|---------|-------------------------------------------------------------------------------|

----

|  | • | a breach of duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | an act or omission committed with intent to derive illegal personal benefit; or |
|--|---------|---------------------------------------------------------------------------------|

|  | • | a fine or forfeit levied against the office holder. |
|--|---------|-----------------------------------------------------|

----

|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
|                                |   | 2014         |   |   | 2015 |   |   | 2016 |   |
|                                |   |         |   |   |   |   |   |   |   |
| Management and administration  |   |         | 12     |   |   |   | 12 |   |   |   | 11 |   |
| Research and development       |   |         | 31     |   |   |   | 32 |   |   |   | 28 |   |
| Sales and marketing            |   |         | 3      |   |   |   | 4 |   |   |   | 4 |   |
| Total                               |   |         | 46     |   |   |   | 48 |   |   |   | 43 |   |

----

|                                                             |   | Number of       |    |   |       |   |
|------------------------------------------------------------------|--------|-----------------|---------|--------|------------|--------|
|                                                             |   | Ordinary Shares |    |   |       |   |
|                                                             |   | Beneficially    |    |   | Percent of |   |
|                                                             |   | Held            |    |   | Class      |   |
|                                                             |   |            |    |   |       |   |
| Directors                                                        |   |            |    |   |       |   |
|                                                             |   |            |    |   |       |   |
| Aharon Schwartz(1)                                          |   |            | 42,502  |   |       |   | * |   |
| Michael J. Anghel(2)                                        |   |            | 42,502  |   |       |   | * |   |
| Nurit Benjamini(3)                                          |   |            | 32,501  |   |       |   | * |   |
| B.J. Bormann(4)                                             |   |            | 42,502  |   |       |   | * |   |
| Raphael Hofstein(5)                                         |   |            | 42,502  |   |       |   | * |   |
| Avraham Molcho(6)                                           |   |            | 32,501  |   |       |   | * |   |
| Sandra Panem(7)                                             |   |            | 40,419  |   |       |   |   |   |
|                                                             |   |            |    |   |       |   |   |   |
| Executive officers                                               |   |            |    |   |       |   |   |   |
|                                                             |   |            |    |   |       |   |   |   |
| Philip Serlin(8)                                            |   |            | 215,108 |   |       |   | * |   |
| Mali Zeevi(9)                                                    |   |            | 92,920  |   |       |   | * |   |
| David Malek(10)                                             |   |            | 173,219 |   |       |   | * |   |
| Ella Sorani(11)                                             |   |            | -       |   |       |   | * |   |
| Abi Vainstein-Haras(12)                                     |   |            | 40,831  |   |       |   | * |   |
|                                                             |   |            |    |   |       |   |   |   |
| All directors and executive officers as a group (12 persons)(13) |   |            | 797,507 |   |       |   | ___*  | %  |

|   |
|--------|
| *      | Less than 1.0%. |
|   |   |
| (1)    | Includes 42,502 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 42,498 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |
|   |   |
| (2)    | Includes 42,502 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 42,498 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |
|   |   |
| (3)    | Includes 32,501 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 37,499 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |
|   |   |
| (4)    | Includes 42,502 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 42,498 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |
|   |   |
| (5)    | Includes 42,502 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 42,498 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |

----

| (6)    | Includes 32,501 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 37,499 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.     |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                 |
| (7)    | Includes 40,419 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 42,081 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.     |
|   |                                                                                                                                                                                                                                                                 |
| (8)    | Includes 215,108 issued ordinary shares upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 279,296 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.     |
|   |                                                                                                                                                                                                                                                                 |
| (9)    | Includes 92,920 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 342,050 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.    |
|   |                                                                                                                                                                                                                                                                 |
| (10)   | Includes 173,219 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 416,581 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.   |
|   |                                                                                                                                                                                                                                                                 |
| (11)   | Does not include 252,800 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.                                                                                                                    |
|   |                                                                                                                                                                                                                                                                 |
| (12)   | Includes 40,831 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 317,169 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017.    |
|   |                                                                                                                                                                                                                                                                 |
| (13)   | Includes 797,507 ordinary shares issuable upon exercise of outstanding options within 60 days of March 20, 2017. Does not include 1,894,967 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 20, 2017. |

----

----

|                              |   | Number of Ordinary Shares Beneficially Held |      |   | Percent of Class |   |
|-----------------------------------|--------|--------------------------------------------------|-----------|--------|------------------|--------|
|                              |   |                                             |      |   |             |   |
| Novartis Pharma AG(1)        |   |                                             | 5,000,000 |   |             |   | 8.1 |   |
| Senvest Management, LLC (2)  |   |                                             | 4,767,619 |   |             |   | 7.7 |   |

| (1) | Based upon information provided by the shareholder in its Schedule 13G filed with the SEC on December 22, 2014. Novartis AG is the parent of Novartis Pharma AG and as such is indicated as sharing voting and dispositive power with respect to the ordinary shares underlying the securities held by Novartis Pharma AG and is deemed to have beneficial ownership of such securities. The address of the principal business office of each of Novartis Pharma AG and Novartis AG is Lichtstrasse 35, 4056 Basel, Switzerland. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Based upon information provided by the shareholder in its Schedule 13G filed with the SEC on February 13, 2017. The securities indicated above are held in the accounts of Senvest Master Fund, L.P., Senvest Israel Partners, L.P., and a separately managed account (collectively with the Senvest Funds, the "Investment Vehicles"). Senvest Management, LLC may be deemed to beneficially own the securities held by the Investment Vehicles by virtue of Senvest Management, LLC's position as investment manager of the Investment Vehicles. Richard Mashaal may be deemed to beneficially own the securities held by the Investment Vehicles by virtue of Mr. Mashaal's status as the managing member of Senvest Management, LLC. None of the foregoing should be construed in and of itself as an admission by either Senvest Management, LLC or Mr. Mashaal as to beneficial ownership of the securities indicated above. The address of the principal business office of Senvest Management, LLC is 540 Madison Avenue, 32nd Floor, New York, New York 10022. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                |   | U.S.$         |   |
|-------------------------------------|--------|---------------|--------|
|                                |   | Price Per ADS |   |
|                                |   | High          |   |   | Low |   |
| Annual:                             |   |          |   |   |   |   |
| 2016                           |   |          | 1.30   |   |   |   | 0.75 |   |
| 2015                           |   |          | 2.84   |   |   |   | 1.23 |   |
| 2014                           |   |          | 3.07   |   |   |   | 1.23 |   |
| 2013                           |   |          | 4.75   |   |   |   | 1.58 |   |
| 2012                           |   |          | 5.55   |   |   |   | 2.23 |   |
|                                |   |          |   |   |   |   |   |   |
| Quarterly:                          |   |          |   |   |   |   |   |   |
| Fourth Quarter 2016            |   |          | 1.16   |   |   |   | 0.92 |   |
| Third Quarter 2016             |   |          | 1.28   |   |   |   | 0.75 |   |
| Second Quarter 2016            |   |          | 1.02   |   |   |   | 0.79 |   |
| First Quarter 2016             |   |          | 1.30   |   |   |   | 0.90 |   |
| Fourth Quarter 2015            |   |          | 1.62   |   |   |   | 1.24 |   |
| Third Quarter 2015             |   |          | 2.65   |   |   |   | 1.23 |   |
| Second Quarter 2015            |   |          | 2.66   |   |   |   | 1.85 |   |
| First Quarter 2015             |   |          | 2.84   |   |   |   | 1.71 |   |
|                                |   |          |   |   |   |   |   |   |
| Most Recent Six Months:             |   |          |   |   |   |   |   |   |
| March 2017 (through March 22, 2017) |   |          | 1.20   |   |   |   | 1.08 |   |
| February 2017                  |   |          | 1.30   |   |   |   | 1.02 |   |
| January 2017                   |   |          | 1.07   |   |   |   | 0.88 |   |
| December 2016                  |   |          | 1.03   |   |   |   | 0.92 |   |
| November 2016                  |   |          | 1.14   |   |   |   | 0.99 |   |
| October 2016                   |   |          | 1.16   |   |   |   | 1.01 |   |
| September 2016                 |   |          | 1.28   |   |   |   | 0.86 |   |

----

|                                |   | NIS                      |   |   | U.S.$                    |   |
|-------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                |   | Price Per Ordinary Share |   |   | Price Per Ordinary Share |   |
|                                |   | High                     |   |   | Low                      |   |   | High |   |   | Low |   |
| Annual:                             |   |                     |   |   |                     |   |   |   |   |   |   |   |
| 2016                           |   |                     | 5.21   |   |                     |   | 3.07 |   |   |   | 1.34 |   |   |   | 0.79 |   |
| 2015                           |   |                     | 10.23  |   |                     |   | 4.94 |   |   |   | 2.57 |   |   |   | 1.27 |   |
| 2014                           |   |                     | 10.49  |   |                     |   | 4.76 |   |   |   | 3.01 |   |   |   | 1.24 |   |
| 2013                           |   |                     | 17.99  |   |                     |   | 5.90 |   |   |   | 4.89 |   |   |   | 1.62 |   |
| 2012                           |   |                     | 21.15  |   |                     |   | 8.92 |   |   |   | 5.58 |   |   |   | 2.32 |   |
|                                |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Quarterly:                          |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Fourth Quarter 2016            |   |                     | 4.31   |   |                     |   | 3.48 |   |   |   | 1.12 |   |   |   | 0.91 |   |
| Third Quarter 2016             |   |                     | 4.60   |   |                     |   | 3.07 |   |   |   | 1.22 |   |   |   | 0.80 |   |
| Second Quarter 2016            |   |                     | 3.92   |   |                     |   | 3.07 |   |   |   | 1.04 |   |   |   | 0.79 |   |
| First Quarter 2016             |   |                     | 5.21   |   |                     |   | 3.67 |   |   |   | 1.34 |   |   |   | 0.94 |   |
| Fourth Quarter 2015            |   |                     | 6.16   |   |                     |   | 5.05 |   |   |   | 1.58 |   |   |   | 1.30 |   |
| Third Quarter 2015             |   |                     | 10.21  |   |                     |   | 4.94 |   |   |   | 2.70 |   |   |   | 1.27 |   |
| Second Quarter 2015            |   |                     | 9.83   |   |                     |   | 7.36 |   |   |   | 2.61 |   |   |   | 1.92 |   |
| First Quarter 2015             |   |                     | 10.23  |   |                     |   | 6.70 |   |   |   | 2.57 |   |   |   | 1.72 |   |
|                                |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Most Recent Six Months:             |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| March 2017 (through March 22, 2017) |   |                     | 4.29   |   |                     |   | 3.93 |   |   |   | 1.17 |   |   |   | 1.07 |   |
| February 2017                  |   |                     | 4.67   |   |                     |   | 3.82 |   |   |   | 1.26 |   |   |   | 1.02 |   |
| January 2017                   |   |                     | 3.92   |   |                     |   | 3.52 |   |   |   | 1.04 |   |   |   | 0.92 |   |
| December 2016                  |   |                     | 3.88   |   |                     |   | 3.48 |   |   |   | 1.02 |   |   |   | 0.91 |   |
| November 2016                  |   |                     | 4.31   |   |                     |   | 3.73 |   |   |   | 1.11 |   |   |   | 0.98 |   |
| October 2016                   |   |                     | 4.24   |   |                     |   | 3.78 |   |   |   | 1.12 |   |   |   | 0.98 |   |
| September 2016                 |   |                     | 4.60   |   |                     |   | 3.26 |   |   |   | 1.22 |   |   |   | 0.86 |   |

----

----

|  | • | amendments to our Articles of Association; |
|--|---------|--------------------------------------------|

|  | • | appointment or termination of our auditors; |
|--|---------|---------------------------------------------|

|  | • | appointment of directors and appointment and dismissal of external directors; |
|--|---------|-------------------------------------------------------------------------------|

|  | • | approval of acts and transactions requiring general meeting approval pursuant to the Companies Law; |
|--|---------|-----------------------------------------------------------------------------------------------------|

|  | • | director compensation, indemnification and change of the principal executive officer; |
|--|---------|---------------------------------------------------------------------------------------|

|  | • | increases or reductions of our authorized share capital; |
|--|---------|----------------------------------------------------------|

|  | • | a merger; and |
|--|---------|---------------|

|  | • | the exercise of our Board of Director's powers by a general meeting, if our Board of Directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | an appointment or removal of directors; |
|--|---------|-----------------------------------------|

|  | • | an approval of transactions with office holders or interested or related parties; |
|--|---------|-----------------------------------------------------------------------------------|

|  | • | an approval of a merger or any other matter in respect of which there is a provision in the articles of association providing that decisions of the general meeting may also be passed by written ballot; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | authorizing the chairman of the board of directors or his relative to act as the company's chief executive officer or act with such authority; or authorize the company's chief executive officer or his relative to act as the chairman of the board of directors or act with such authority; and |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | other matters which may be prescribed by Israel's Minister of Justice. |
|--|---------|------------------------------------------------------------------------|

|  | (i) | the majority of the votes includes at least a majority of all the votes of shareholders who are not controlling shareholders of the company or who do not have a personal interest in the compensation policy and participating in the vote; abstentions shall not be included in the total of the votes of the aforesaid shareholders; or |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (ii) | the total of opposing votes from among the shareholders described in subsection (i) above does not exceed 2% of all the voting rights in the company. |
|--|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

----

----

----

|  | · | the excess distribution or gain would be allocated ratably over the Non-Electing U.S. Investor's holding period for the ordinary shares or ADSs; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the amount allocated to the current taxable year and any year prior to us becoming a PFIC would be taxed as ordinary income; and |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------|

|  | · | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|  | • | make the rights available to all or certain holders of ADSs, by means of warrants or otherwise, if lawful and practically feasible; or |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | if it is not lawful or practically feasible to make the rights available, attempt to sell those rights or warrants or other instruments. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | collect dividends and other distributions pertaining to deposited securities; |
|--|---------|-------------------------------------------------------------------------------|

----

|  | • | sell rights as described under the heading "Dividends, Other Distributions and Rights — Rights to subscribe for additional shares and other rights" above; and |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | deliver deposited securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for surrendered ADRs. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | taxes and other governmental charges; |
|--|---------|---------------------------------------|

|  | • | any applicable transfer or registration fees; |
|--|---------|-----------------------------------------------|

|  | • | certain cable, telex and facsimile transmission charges as provided in the Deposit Agreement; |
|--|---------|-----------------------------------------------------------------------------------------------|

|  | • | any expenses incurred in the conversion of foreign currency; |
|--|---------|--------------------------------------------------------------|

|  | • | a fee of $5.00 or less per 100 ADSs (or a portion thereof) for the execution and delivery of ADRs and the surrender of ADRs; |
|--|---------|------------------------------------------------------------------------------------------------------------------------------|

|  | • | a fee of $.05 or less per ADS (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement; |
|--|---------|----------------------------------------------------------------------------------------------------------------------|

|  | • | a fee for the distribution of securities pursuant to the Deposit Agreement; |
|--|---------|-----------------------------------------------------------------------------|

|  | • | in addition to any fee charged for a cash distribution, a fee of $.05 or less per ADS (or portion thereof) per annum for depositary services; |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | a fee for the distribution of proceeds of rights that the Depositary sells pursuant to the Deposit Agreement; and |
|--|---------|-------------------------------------------------------------------------------------------------------------------|

|  | • | any other charges payable by the Depositary, any of the Depositary's agents, or the agents of the Depositary's agents in connection with the servicing of ordinary shares or other Deposited Securities. |
|--|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                        |   | Year Ended December 31,        |    |
|-----------------------------|--------|--------------------------------|---------|
|                        |   | 2015                           |    |   | 2016 |   |
| Services Rendered           |   | (in thousands of U.S. dollars) |    |
|                        |   |                           |    |   |   |   |
| Audit Fees(1)          |   | $                              | 110     |   |   | $ | 110 |   |
| Audit-Related Fees(2)  |   |                           | 7       |   |   |   | – |   |
| Tax Fees(3)            |   |                           | 26      |   |   |   | 21 |   |
| All Other Fees         |   |                           | – |   |   |   | – |   |
| Total                       |   | $                              | 143     |   |   | $ | 131 |   |

| (1) | Audit fees consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the independent accountant can reasonably provide. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Audit related services relate to reports to the OCS and work regarding a public listing or offering.                                                                                                                         |
| (3) | Tax fees relate to tax compliance, planning and advice.                                                                                                                                                                      |

----

|  | • | Distribution of annual and quarterly reports to shareholders. Under Israeli law, as a public company whose shares are traded on the TASE, we are not required to distribute annual and quarterly reports directly to shareholders and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports publicly available through the website of the ISA and the TASE. In addition, we make our audited financial statements available to our shareholders at our offices. As a foreign private issuer, we are generally exempt from the SEC's proxy solicitation rules. |
|--|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Quorum. While the Marketplace Rules of the Nasdaq Stock Market require that the quorum for purposes of any meeting of the holders of a listed company's common voting stock, as specified in the company's bylaws, be no less than 33 1/3% of the company's outstanding common voting stock, under Israeli law, a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required for a quorum at a shareholders meeting. Our Articles of Association provide that a quorum of two or more shareholders holding at least 25% of the voting rights in person or by proxy is required for commencement of business at a general meeting. However, the quorum set forth in our Articles of Association with respect to an adjourned meeting consists of any number of shareholders present in person or by proxy. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Independent Directors. Our Board of Directors includes two external directors in accordance with the provisions contained in Sections 239-249 of the Companies Law and Rule 10A-3 of the general rules and regulations promulgated under the Securities Act of 1933, rather than a majority of external directors. Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present. We are required, however, to ensure that all members of our Audit Committee are "independent" under the applicable Nasdaq and SEC criteria for independence (as a foreign private issuer we are not exempt from the SEC independence requirement), and we must also ensure that a majority of the members of our Audit Committee are unaffiliated directors as defined in the Companies Law. Furthermore, Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present, which the Marketplace Rules of the Nasdaq Stock Market otherwise require. If we qualify as an Eligible Company and opt to follow the exemption provided under the Amendment to the Relief Regulations regarding appointment of external directors and composition of the audit and compensation committees, we will be required at all times to comply with the US rules and regulations governing the appointment of independent directors and composition of the audit and compensation committees applicable to US domestic issuers instead of complying with the Companies Law provisions relating to external directors and composition of the audit and compensation committees. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Audit Committee. Our Audit Committee complies with all of the requirements under Israeli law, and is composed of two external directors, which are all of our external directors, and only one other director, who cannot be the chairman of our Board of Directors. Consistent with Israeli law, the independent auditors are elected at a meeting of shareholders instead of being appointed by the Audit Committee. If we qualify as an Eligible Company and opt to follow the exemption provided under the Amendment to the Relief Regulations regarding appointment of external directors and composition of the audit and compensation committees, we will be required at all times to comply with the US rules and regulations governing the appointment of independent directors and composition of the Audit Committee applicable to US domestic issuers instead of complying with the Companies Law provisions relating to external directors and composition of the Audit Committee. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Nomination of our Directors. With the exception of our external directors and directors elected by our Board of Directors due to vacancy, our directors are elected by a general or special meeting of our shareholders, to hold office until they are removed from office by the majority of our shareholders at a general or special meeting of our shareholders. See "Item 6. Directors, Senior Management and Employees — Board Practices — Board of Directors." The nominations for directors, which are presented to our shareholders, are generally made by our directors, but nominations may be made by one or more of our shareholders as provided in our Articles of Association, under the Companies Law or in an agreement between us and our shareholders. Currently, there is no agreement between us and any shareholder regarding the nomination of directors. In accordance with our Articles of Association, under the Companies Law, any one or more shareholders holding, in the aggregate, either (1) 5% of our outstanding shares and 1% of our outstanding voting power or (2) 5% of our outstanding voting power, may nominate one or more persons for election as directors at a general or special meeting by delivering a written notice of such shareholder's intent to make such nomination or nominations to our registered office. Each such notice must set forth all of the details and information as required to be provided in our Articles of Association. |
|--|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Compensation Committee and Compensation of Officers. Israeli law, and our amended and restated articles of association, do not require that a compensation committee composed solely of independent members of our Board of Directors determine (or recommend to the board of directors for determination) an executive officer's compensation, as required under Nasdaq's listing standards related to compensation committee independence and responsibilities; nor do they require that the Company adopt and file a compensation committee charter.  Instead, our compensation committee has been established and conducts itself in accordance with provisions governing the composition of and the responsibilities of a compensation committee as set forth in the Companies Law, and is composed of two external directors, which are all of our external directors, and one additional director, who is not the chairman of our Board of Directors or otherwise employed by the Company. If we qualify as an Eligible Company and opt to follow the exemption provided under the Amendment to the Relief Regulations regarding appointment of external directors and composition of the audit and compensation committees, we will be required at all times to comply with the US rules and regulations governing the appointment of independent directors and composition of the compensation committee applicable to US domestic issuers instead of complying with the Companies Law provisions relating to external directors and composition of the compensation committee. Additionally, we comply with the requirements set forth under the Companies Law, pursuant to which transactions with office holders regarding their terms of office and employment, and transaction with a controlling shareholder in a company regarding his or her employment and/or his or her terms of office with the company, may require the approval of the compensation committee, the board of directors and under certain circumstances the shareholders, either in accordance with our previously approved compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations set forth in the Companies Law. See "Item 6. Directors, Senior Management and Employees — Board Practices — Compensation Committee" for information regarding the Compensation Committee, and "Item 6. Directors, Senior Management and Employees — Approval of Related Party Transactions under Israeli Law" for information regarding the special approvals required with respect to approval of terms of office and employment of office holders, pursuant to the Companies Law, as set forth under Amendment 20. The requirements for shareholder approval of any office holder compensation, and the relevant majority or special majority for such approval, are all as set forth in the Companies Law. Thus, we will seek shareholder approval for all corporate actions with respect to office holder compensation requiring such approval under the requirements of the Companies Law, including seeking prior approval of the shareholders for the compensation policy and for certain office holder compensation, rather than seeking approval for such corporate actions in accordance with Nasdaq Listing Rules. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Approval of Related Party Transactions. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transactions, set forth in sections 268 to 275 of the Companies Law, and the regulations promulgated thereunder, which require the approval of the audit committee, the compensation committee, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our Board of Directors as required under the Marketplace Rules of the Nasdaq Stock Market. |
|--|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | • | Shareholder Approval. We seek shareholder approval for all corporate actions requiring such approval in accordance with the requirements of the Companies Law, which are different or in addition to the requirements for seeking shareholder approval under Nasdaq Listing Rule 5635, rather than seeking approval for corporation actions in accordance with such listing rules. |
|--|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | • | Equity Compensation Plans. We do not necessarily seek shareholder approval shareholder approval for the establishment of, and amendments to, stock option or equity compensation plans (as set forth in NASDAQ Listing Rule 5635(c)), as such matters are not subject to shareholder approval under Israeli law. Our equity compensation plan is available to our employees, none of whom are currently U.S. employees, and provide features necessary to comply with applicable non-U.S. tax laws. |
|--|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exhibit Number  |   | Exhibit Description                                                                                                                                                                                                                                                     |   |
|-----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|            |   |                                                                                                                                                                                                                                                                    |   |
| 2.1(4)          |   | Articles of Association, as amended May 31, 2015                                                                                                                                                                                                                        |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 2.2(2)          |   | Form of Deposit Agreement dated as of July 21, 2011 among the Registrant, The Bank of New York Mellon, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued thereunder                                                      |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 2.3(2)          |   | Form of American Depositary Receipt; the Form is Exhibit A of the Form of Depositary Agreement                                                                                                                                                                          |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 4.5             |   | Employment Agreement with Philip Serlin, dated May 24, 2009, as amended                                                                                                                                                                                                 |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 4.6†(1)   |   | License Agreement entered into as of January 10, 2005, between BioLine Innovations Jerusalem L.P. and B.G. Negev Technologies and Applications Ltd.                                                                                                                     |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 4.7(1)          |   | Assignment Agreement entered into as of January 1, 2009 entered into between BioLine Innovations Jerusalem L.P. and the Registrant                                                                                                                                      |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 4.16†(1)  |   | License Agreement entered into as of November 25, 2007 between BioLine Innovations Jerusalem L.P. and Innovative Pharmaceutical Concepts, Inc.                                                                                                                          |   |
|            |   |                                                                                                                                                                                                                                                                    |   |
| 4.18(12)        |   | BioLineRx Ltd. Amended and Restated 2003 Share Incentive Plan                                                                                                                                                                                                           |   |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.30(3)         |   | Employment Agreement with David Malek, dated August 8, 2011                                                                                                                                                                                                             |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.32(6)         |   | Form of Warrant to purchase American Depositary Shares                                                                                                                                                                                                                  |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.33(7)         |   | License Agreement entered into as of September 2, 2012 by and between the Registrant and Biokine Therapeutics Ltd.                                                                                                                                                      |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.35(9)†  |   | License Agreement entered into as of February 15, 2011 between the Registrant and Valorisation-Recherche, Limited Partnership                                                                                                                                           |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.36(8)         |   | Compensation Policy for Executives and Directors                                                                                                                                                                                                                        |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.37(10)        |   | Lease Agreement entered into as of August 7, 2014 between S.M.L. Solomon Industrial Buildings Ltd. and Infrastructure Management and Development Established by C.P.M. Ltd. as Lessor and the Registrant as Lessee, as amended (English summary of the Hebrew original) |
|            |   |                                                                                                                                                                                                                                                                    |
| 4.38(10)† |   | Investment and Collaboration Agreement entered into as of December 16, 2014 between the Registrant and Novartis Pharma AG                                                                                                                                               |

----

| Exhibit Number  |   | Exhibit Description                                                                                                                                                                                  |
|-----------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                                                                                 |
| 4.39(11)† |   | License Agreement entered into as of December 22, 2014 between the Registrant and Wartner Europe BV                                                                                                  |
|            |   |                                                                                                                                                                                                 |
| 4.40(7)†  |   | Clinical Trial Collaboration and Supply Agreement entered into as of January 11, 2016 between the Registrant and Merck Sharp & Dohme B.V.                                                        |
|            |   |                                                                                                                                                                                                 |
| 4.42†     |   | Combination Study Agreement entered into as of September 6, 2016 between the Registrant and Genentech, Inc.                                                                                          |
|            |   |                                                                                                                                                                                                 |
| 4.43            |   | Employment Agreement with Mali Zeevi, dated September 16, 2009, as amended                                                                                                                           |
|            |   |                                                                                                                                                                                                 |
| 4.44            |   | Employment Agreement with Abi Vainstein-Haras, dated April 2, 2014, as amended                                                                                                                       |
|            |   |                                                                                                                                                                                                 |
| 4.45            |   | Employment Agreement with Ella Sorani, dated January 11, 2017                                                                                                                                        |
|            |   |                                                                                                                                                                                                 |
| 4.46†     |   | Amended and Restated Exclusive License Agreement entered into as of April 30, 2013 between the University of Massachusetts and Agalimmune Ltd.                                                       |
|            |   |                                                                                                                                                                                                 |
| 4.47†     |   | Evaluation License and Option Agreement entered into as of March 31, 2015 between Agalimmune Ltd. and Kode Biotech Limited                                                                           |
|            |   |                                                                                                                                                                                                 |
| 12.1            |   | Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                   |
|            |   |                                                                                                                                                                                                 |
| 12.2            |   | Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                   |
|            |   |                                                                                                                                                                                                 |
| 13.1            |   | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                    |
|            |   |                                                                                                                                                                                                 |
| 13.2            |   | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                    |
|            |   |                                                                                                                                                                                                 |
| 15.4(6)         |   | Subscription Agreement entered into as of February 6, 2013 between the Registrant and OrbiMed Israel Partners Limited Partnership                                                                    |
|            |   |                                                                                                                                                                                                 |
| 15.5            |   | Consent of Kesselman & Kesselman, Certified Public Accountant (Isr.), a member of PricewaterhouseCoopers International Limited, independent registered public accounting firm for the Registrant |
|            |   |                                                                                                                                                                                                 |
| 15.6(5)         |   | Purchase Agreement entered into as of May 28, 2014 between the Registrant and Lincoln Park Capital Fund, LLC                                                                                         |
|            |   |                                                                                                                                                                                                 |
| 15.7(5)         |   | Registration Rights Agreement entered into as of May 28, 2014 between the Registrant and Lincoln Park Capital Fund, LLC                                                                              |

----

| † | Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1) | Incorporated by reference to the Registrant's Registration Statement on Form 20-F (No. 001-35223) filed on July 1, 2011. |
|-----|--------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to Exhibit 1 of the Registration Statement on Form F-6 (No. 333-175360) filed by the Bank of New York Mellon with respect to the Registrant's American Depositary Receipts. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to the Registrant's Registration Statement on Form F-1 (No. 333-179792) filed on February 29, 2012. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated by reference to the Registrant's Registration Statement on Form F-3 (No. 333-205700) filed on July 16, 2015. |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated by reference to the Registrant's Form 6-K filed on May 30, 2014. |
|-----|-------------------------------------------------------------------------------|

| (6) | Incorporated by reference to the Registrant's Form 6-K filed on February 6, 2013. |
|-----|-----------------------------------------------------------------------------------|

| (7) | Incorporated by reference to the Registrant's Annual Report on Form 20-F/A filed on May 31, 2016 |
|-----|--------------------------------------------------------------------------------------------------|

| (8) | Incorporated by reference to the Registrant's Form 6-K filed on May 31, 2016. |
|-----|-------------------------------------------------------------------------------|

| (9) | Incorporated by reference to the Registrant's Annual Report on Form 20-F/A filed on May 15, 2014. |
|-----|---------------------------------------------------------------------------------------------------|

| (10) | Incorporated by reference to the Registrant's Annual Report on Form 20-F filed on March 23, 2015. |
|------|---------------------------------------------------------------------------------------------------|

| (11) | Incorporated by reference to the Registrant's Annual Report on Form 20-F/A filed on September 22, 2015. |
|------|---------------------------------------------------------------------------------------------------------|

| (12) | Incorporated by reference to the Registrant's Annual Report on Form 20-F filed on March 10, 2016. |
|------|---------------------------------------------------------------------------------------------------|

----

|   | BIOLINERX LTD. |
|--------|----------------|
|   |           |   |
|   | By:            | /s/ Philip A. Serlin |
|   |           | Philip A. Serlin |
|   |           | Chief Executive Officer |

----

|                                                    | Page   |
|---------------------------------------------------------|--------|
|                                                    |   |
| Report of Independent Registered Public Accounting Firm | F-1    |
| Consolidated Statements of Financial Position           | F-2    |
| Consolidated Statements of Comprehensive Loss           | F-3    |
| Statements of Changes in Equity                         | F-4    |
| Consolidated Cash Flow Statements                       | F-5    |
| Notes to the Financial Statements                       | F-7    |

----

| Tel Aviv, Israel | Kesselman & Kesselman                                  |
|------------------|------------------------------------------------------------|
| March 23, 2017   | Certified Public Accountants (Isr.)                        |
|             | A member firm of PricewaterhouseCoopers International Ltd. |

|   | Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   | P.O Box 50oo5 Tel-Aviv 6150001  Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il                                           |
|   | Kesselman & Kesselman is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity |

----

|                                           |   | Note   |   |   | December 31,     |   |
|------------------------------------------------|--------|--------|--------|--------|------------------|--------|
|                                           |   |   |   |   | 2015             |   |   | 2016 |   |
|                                           |   |   |   |   | in USD thousands |   |
| Assets                                         |   |   |   |   |             |   |   |   |   |
| CURRENT ASSETS                                 |   |   |   |   |             |   |   |   |   |
| Cash and cash equivalents                      |   |   | 5      |   |             |   | 5,544 |   |   |   | 2,469 |   |
| Short-term bank deposits                       |   |   | 6      |   |             |   | 42,119 |   |   |   | 33,154 |   |
| Prepaid expenses                               |   |   |   |   |             |   | 229 |   |   |   | 255 |   |
| Other receivables                              |   |   | 15a    |        |             |   | 291 |   |   |   | 223 |   |
| Total current assets                           |   |   |   |   |             |   | 48,183 |   |   |   | 36,101 |   |
|                                           |   |   |   |   |             |   |   |   |   |   |   |   |
| NON-CURRENT ASSETS                             |   |   |   |   |             |   |   |   |   |   |   |   |
| Long-term prepaid expenses                     |   |   | 15b    |        |             |   | 58 |   |   |   | 52 |   |
| Property and equipment, net                    |   |   | 7      |   |             |   | 2,909 |   |   |   | 2,605 |   |
| Intangible assets, net                         |   |   | 8      |   |             |   | 152 |   |   |   | 181 |   |
| Total non-current assets                       |   |   |   |   |             |   | 3,119 |   |   |   | 2,838 |   |
| Total assets                                   |   |   |   |   |             |   | 51,302 |   |   |   | 38,939 |   |
|                                           |   |   |   |   |             |   |   |   |   |   |   |   |
| Liabilities and equity                         |   |   |   |   |             |   |   |   |   |   |   |   |
| CURRENT LIABILITIES                            |   |   |   |   |             |   |   |   |   |   |   |   |
| Current maturities of long-term bank loan      |   |   | 9      |   |             |   | 93 |   |   |   | 93 |   |
| Accounts payable and accruals:                 |   |   |   |   |             |   |   |   |   |   |   |   |
| Trade                                          |   |   | 15c    |        |             |   | 1,910 |   |   |   | 2,590 |   |
| Other                                          |   |   | 15c    |        |             |   | 1,137 |   |   |   | 978 |   |
| Total current liabilities                      |   |   |   |   |             |   | 3,140 |   |   |   | 3,661 |   |
|                                           |   |   |   |   |             |   |   |   |   |   |   |   |
| NON-CURRENT LIABILITIES                        |   |   |   |   |             |   |   |   |   |   |   |   |
| Long-term bank loan, net of current maturities |   |   | 9      |   |             |   | 344 |   |   |   | 250 |   |
| Warrants                                       |   |   | 10c    |        |             |   | 208 |   |   |   | 1 |   |
| Total non-current liabilities                  |   |   |   |   |             |   | 552 |   |   |   | 251 |   |
|                                           |   |   |   |   |             |   |   |   |   |   |   |   |
| COMMITMENTS AND CONTINGENT LIABILITIES         |   |   | 13     |   |             |   |   |   |   |   |   |   |
| Total liabilities                              |   |   |   |   |             |   | 3,692 |   |   |   | 3,912 |   |
|                                           |   |   |   |   |             |   |   |   |   |   |   |   |
| EQUITY                                         |   |   | 10     |   |             |   |   |   |   |   |   |   |
| Ordinary shares                                |   |   |   |   |             |   | 1,455 |   |   |   | 1,513 |   |
| Share premium                                  |   |   |   |   |             |   | 196,201 |   |   |   | 199,567 |   |
| Capital reserve                                |   |   |   |   |             |   | 10,735 |   |   |   | 10,569 |   |
| Other comprehensive loss                       |   |   |   |   |             |   | (1,416 | ) |   |   | (1,416 | ) |
| Accumulated deficit                            |   |   |   |   |             |   | (159,365 | ) |   |   | (175,206 | ) |
| Total equity                                   |   |   |   |   |             |   | 47,610 |   |   |   | 35,027 |   |
| Total liabilities and equity                   |   |   |   |   |             |   | 51,302 |   |   |   | 38,939 |   |

----

|                                                                             |   | Note   |   |   | Year ended December 31, |       |
|----------------------------------------------------------------------------------|--------|--------|--------|--------|-------------------------|------------|
|                                                                             |   |   |   |   | 2014                    |       |   | 2015 |   |   | 2016 |   |
|                                                                             |   |   |   |   | in USD thousands        |       |
|                                                                             |   |   |   |   |                    |       |   |   |   |   |   |   |
| RESEARCH AND DEVELOPMENT EXPENSES                                                |   | 15d    |   |   |                    | (11,866    | ) |   |   | (11,489 | ) |   |   | (11,177 | ) |
| SALES AND MARKETING EXPENSES                                                     |   | 15e    |   |   |                    | (1,589     | ) |   |   | (1,003 | ) |   |   | (1,352 | ) |
| GENERAL AND ADMINISTRATIVE EXPENSES                                              |   | 15f    |   |   |                    | (3,800     | ) |   |   | (3,704 | ) |   |   | (3,984 | ) |
| OPERATING LOSS                                                                   |   |   |   |   |                    | (17,255    | ) |   |   | (16,196 | ) |   |   | (16,513 | ) |
| NON-OPERATING INCOME, NET                                                        |   | 15g    |   |   |                    | 3,061      |   |   |   | 1,445 |   |   |   | 214 |   |
| FINANCIAL INCOME                                                                 |   | 15h    |   |   |                    | 3,566      |   |   |   | 457 |   |   |   | 480 |   |
| FINANCIAL EXPENSES                                                               |   | 15i    |   |   |                    | (448       | ) |   |   | (106 | ) |   |   | (22 | ) |
| NET LOSS                                                                         |   |   |   |   |                    | (11,076    | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
| OTHER COMPREHENSIVE LOSS -                                                       |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |
| CURRENCY TRANSLATION DIFFERENCES                                                 |   |   |   |   |                    | (2,834     | ) |   |   | - |   |   |   | - |   |
| COMPREHENSIVE LOSS                                                               |   |   |   |   |                    | (13,910    | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
|                                                                             |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   | in USD                  |       |
| LOSS PER ORDINARY SHARE – BASIC AND DILUTED                                |   | 12     |   |   |                    | (0.34      | ) |   |   | (0.28 | ) |   |   | (0.28 | ) |
|                                                                             |   |   |   |   |                    |       |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN CALCULATION OF LOSS PER ORDINARY SHARE |   | 12     |   |   |                    | 32,433,883 |   |   |   | 51,406,434 |   |   |   | 56,144,727 |   |

----

|                                         |   | Ordinary shares  |   |   | Share premium |   |    | Capital reserve |   |   | Other comprehensive income (loss) |   |   | Accumulated deficit |   |   | Total  |   |
|----------------------------------------------|--------|------------------|--------|--------|---------------|--------|---------|-----------------|--------|--------|-----------------------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                         |   | in USD thousands |   |
| BALANCE AT JANUARY 1, 2014                   |   |             | 640    |   |          |   | 134,390 |            |   |   | 9,163                             |   |   |                | 1,418  |   |   |   | (133,889 | ) |   |   | 11,722 |   |
| CHANGES IN 2014:                             |   |             |   |   |          |   |    |            |   |   |                              |   |   |                |   |   |   |   |   |   |   |   |   |   |
|   Issuance of share capital, net   |   |             | 415    |   |          |   | 32,523  |            |   |   | -                                 |   |   |                | -      |   |   |   | - |   |   |   | 32,938 |   |
|   Employee stock options exercised |   |             | -      |   |          |   | 22      |            |   |   | (22                               | )      |   |                | -      |   |   |   | - |   |   |   | - |   |
|   Employee stock options expired   |   |             | -      |   |          |   | 396     |            |   |   | (396                              | )      |   |                | -      |   |   |   | - |   |   |   | - |   |
|   Share-based compensation         |   |             | -      |   |          |   | -       |            |   |   | 1,055                             |   |   |                | -      |   |   |   | - |   |   |   | 1,055 |   |
|   Other comprehensive loss         |   |             | -      |   |          |   | -       |            |   |   | -                                 |   |   |                | (2,834 | )      |   |   | - |   |   |   | (2,834 | ) |
|   Comprehensive loss for the year  |   |             | -      |   |          |   | -       |            |   |   | -                                 |   |   |                | -      |   |   |   | (11,076 | ) |   |   | (11,076 | ) |
| BALANCE AT DECEMBER 31, 2014                 |   |             | 1,055  |   |          |   | 167,331 |            |   |   | 9,800                             |   |   |                | (1,416 | )      |   |   | (144,965 | ) |   |   | 31,805 |   |
| CHANGES IN 2015:                             |   |             |   |   |          |   |    |            |   |   |                              |   |   |                |   |   |   |   |   |   |   |   |   |   |
|   Issuance of share capital, net   |   |             | 400    |   |          |   | 28,653  |            |   |   | -                                 |   |   |                | -      |   |   |   | - |   |   |   | 29,053 |   |
|   Employee stock options expired   |   |             | -      |   |          |   | 217     |            |   |   | (217                              | )      |   |                | -      |   |   |   | - |   |   |   | - |   |
|   Share-based compensation         |   |             | -      |   |          |   | -       |            |   |   | 1,152                             |   |   |                | -      |   |   |   | - |   |   |   | 1,152 |   |
|   Comprehensive loss for the year  |   |             | -      |   |          |   | -       |            |   |   |                              |   |   |                | -      |   |   |   | (14,400 | ) |   |   | (14,400 | ) |
| BALANCE AT DECEMBER 31, 2015                 |   |             | 1,455  |   |          |   | 196,201 |            |   |   | 10,735                            |   |   |                | (1,416 | )      |   |   | (159,365 | ) |   |   | 47,610 |   |
| CHANGES IN 2016:                             |   |             |   |   |          |   |    |            |   |   |                              |   |   |                |   |   |   |   |   |   |   |   |   |   |
|   Issuance of share capital, net   |   |             | 57     |   |          |   | 2,126   |            |   |   | -                                 |   |   |                | -      |   |   |   | - |   |   |   | 2,183 |   |
|   Employee stock options exercised |   |             | 1      |   |          |   | 171     |            |   |   | (172                              | )      |   |                | -      |   |   |   | - |   |   |   | - |   |
|   Employee stock options expired   |   |             | -      |   |          |   | 1,069   |            |   |   | (1,069                            | )      |   |                | -      |   |   |   | - |   |   |   | - |   |
|   Share-based compensation         |   |             | -      |   |          |   | -       |            |   |   | 1,075                             |   |   |                | -      |   |   |   | - |   |   |   | 1,075 |   |
|   Comprehensive loss for the year  |   |             | -      |   |          |   | -       |            |   |   | -                                 |   |   |                | -      |   |   |   | (15,841 | ) |   |   | (15,841 | ) |
| BALANCE AT DECEMBER 31, 2016                 |   |             | 1,513  |   |          |   | 199,567 |            |   |   | 10,569                            |   |   |                | (1,416 | )      |   |   | (175,206 | ) |   |   | 35,027 |   |

----

|                                                                                       |   |                    |    |
|--------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                       |   | Year ended December 31, |    |
|                                                                                       |   | 2014                    |    |   | 2015 |   |   | 2016 |   |
|                                                                                       |   | in USD thousands        |    |
| CASH FLOWS - OPERATING ACTIVITIES                                                          |   |                    |    |   |   |   |   |   |   |
| Net loss                                                                                   |   |                    | (11,076 | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
| Adjustments required to reflect net cash used in operating activities (see appendix below) |   |                    | (4,674  | ) |   |   | 232 |   |   |   | 1,328 |   |
| Net cash used in operating activities                                                      |   |                    | (15,750 | ) |   |   | (14,168 | ) |   |   | (14,513 | ) |
|                                                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| CASH FLOWS - INVESTING ACTIVITIES                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
|      Investments in short-term deposits                           |   |                    | (57,186 | ) |   |   | (63,130 | ) |   |   | (32,982 | ) |
|      Maturities of short-term deposits                            |   |                    | 37,650  |   |   |   | 50,083 |   |   |   | 42,334 |   |
| Maturities of restricted deposits                                                          |   |                    | -       |   |   |   | 166 |   |   |   | - |   |
| Purchase of property and equipment                                                         |   |                    | (187    | ) |   |   | (2,683 | ) |   |   | (52 | ) |
| Purchase of intangible assets                                                              |   |                    | (6      | ) |   |   | (36 | ) |   |   | (3 | ) |
| Net cash provided by (used in) investing activities                                        |   |                    | (19,729 | ) |   |   | (15,600 | ) |   |   | 9,297 |   |
|                                                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| CASH FLOWS - FINANCING ACTIVITIES                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |
| Issuance of share capital and warrants, net of issuance costs                              |   |                    | 32,635  |   |   |   | 29,053 |   |   |   | 2,183 |   |
|      Proceeds of bank loan                                        |   |                    | -       |   |   |   | 467 |   |   |   | - |   |
|      Repayments of bank loan                                      |   |                    | -       |   |   |   | (31 | ) |   |   | (93 | ) |
| Net cash provided by financing activities                                                  |   |                    | 32,635  |   |   |   | 29,489 |   |   |   | 2,090 |   |
|                                                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| DECREASE IN CASH AND CASH EQUIVALENTS                                                      |   |                    | (2,844  | ) |   |   | (279 | ) |   |   | (3,126 | ) |
| CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                                              |   |                    | 8,899   |   |   |   | 5,790 |   |   |   | 5,544 |   |
| EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS                                          |   |                    | (265    | ) |   |   | 33 |   |   |   | 51 |   |
| CASH AND CASH EQUIVALENTS - END OF YEAR                                                    |   |                    | 5,790   |   |   |   | 5,544 |   |   |   | 2,469 |   |

----

|                                                                                        |   | Year ended December 31, |   |
|---------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                        |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                                                                        |   | in USD thousands        |   |
| APPENDIX                                                                                    |   |                    |   |   |   |   |   |   |   |
|                                                                                        |   |                    |   |   |   |   |   |   |   |
| Adjustments required to reflect net cash used in operating activities:                      |   |                    |   |   |   |   |   |   |   |
| Income and expenses not involving cash flows:                                               |   |                    |   |   |   |   |   |   |   |
| Depreciation and amortization                                                               |   |                    | 269    |   |   |   | 441 |   |   |   | 482 |   |
| Write-off of intangible assets                                                              |   |                    | 105    |   |   |   | - |   |   |   | - |   |
| Retirement benefit obligations                                                              |   |                    | (42    | ) |   |   | - |   |   |   | - |   |
| Long-term prepaid expenses                                                                  |   |                    | (6     | ) |   |   | (9 | ) |   |   | 6 |   |
| Exchange differences on cash and cash equivalents                                           |   |                    | (261   | ) |   |   | (33 | ) |   |   | (51 | ) |
| Gain on adjustment of warrants to fair value                                                |   |                    | (3,454 | ) |   |   | (1,292 | ) |   |   | (207 | ) |
| Commitment fee paid by issuance of share capital                                            |   |                    | 303    |   |   |   | - |   |   |   | - |   |
| Share-based compensation                                                                    |   |                    | 1,055  |   |   |   | 1,152 |   |   |   | 1,075 |   |
| Interest and exchange differences on short-term deposits                                    |   |                    | (2,787 | ) |   |   | (182 | ) |   |   | (387 | ) |
| Interest and linkage differences on bank loan                                               |   |                    | -      |   |   |   | 1 |   |   |   | (1 | ) |
| Interest and exchange differences on restricted deposits                                    |   |                    | (20    | ) |   |   | - |   |   |   | - |   |
|                                                                                        |   |                    | (4,838 | ) |   |   | 78 |   |   |   | 917 |   |
|                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Changes in operating asset and liability items:                                             |   |                    |   |   |   |   |   |   |   |   |   |   |
| Decrease (increase) in prepaid expenses and other receivables                               |   |                    | 80     |   |   |   | (42 | ) |   |   | 42 |   |
| Increase in accounts payable and accruals                                                   |   |                    | 84     |   |   |   | 196 |   |   |   | 369 |   |
|                                                                                        |   |                    | 164    |   |   |   | 154 |   |   |   | 411 |   |
|                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |
|                                                                                        |   |                    | (4,674 | ) |   |   | 232 |   |   |   | 1,328 |   |
|                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Supplementary information on investing and financing activities not involving cash flows:   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Credit received in connection with purchase of property and equipment and intangible assets |   |                    | 143    |   |   |   | 87 |   |   |   | 152 |   |
|                                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Supplementary information on interest received in cash                                      |   |                    | 97     |   |   |   | 173 |   |   |   | 453 |   |

----

|  | a. | General |
|--|----|---------|

|  | b. | Approval of consolidated financial statements |
|--|----|-----------------------------------------------|

|  | a. | Basis of presentation |
|--|----|-----------------------|

----

|  | a. | Basis of presentation (cont.) |
|--|----|-------------------------------|

|  | b. | Consolidation of the financial statements |
|--|----|-------------------------------------------|

|  | c. | Functional and reporting currency |
|--|----|-----------------------------------|

----

|  | d. | Property and equipment |
|--|----|------------------------|

|                                   | %      |
|----------------------------------------|--------|
| Computers and communications equipment | 20-33  |
| Office furniture and equipment         | 6-15   |
| Laboratory equipment                   | 15-20  |
|                                   |   |

|  | e. | Intangible assets |
|--|----|-------------------|

----

|  | f. | Impairment of non-financial assets |
|--|----|------------------------------------|

|  | g. | Financial assets |
|--|----|------------------|

|  | 1) | Classification |
|--|----|----------------|

|  | a) | Financial assets at fair value through profit or loss |
|--|----|-------------------------------------------------------|

----

|  | h. | Financial assets (cont.) |
|--|----|--------------------------|

|  | b) | Loans and receivables |
|--|----|-----------------------|

|  | 2) | Recognition and measurement |
|--|----|-----------------------------|

|  | 3) | Offsetting financial instruments |
|--|----|----------------------------------|

|  | i. | Cash equivalents |
|--|----|------------------|

|  | j. | Warrants |
|--|----|----------|

----

|  | k. | Share capital |
|--|----|---------------|

|  | l. | Trade payables |
|--|----|----------------|

|  | m. | Deferred taxes |
|--|----|----------------|

|  | n. | Revenue recognition |
|--|----|---------------------|

|  | · | The Company has transferred to the licensee the significant risks and rewards of ownership of the patents and intellectual property. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The Company does not retain either the continuing managerial involvement to the degree usually associated with ownership or the effective control over the patent and intellectual property. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The amount of revenue can be measured reliably. |
|--|--------|-------------------------------------------------|

|  | · | It is probable that the economic benefits associated with the transaction will flow to the Company. |
|--|--------|-----------------------------------------------------------------------------------------------------|

|  | · | The costs incurred or to be incurred in respect of the sale can be measured reliably. |
|--|--------|---------------------------------------------------------------------------------------|

----

|  | o. | Research and development expenses |
|--|----|-----------------------------------|

|  | · | technological feasibility exists for completing development of the intangible asset so that it will be available for use or sale. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|  | · | it is management’s intention to complete development of the intangible asset for use or sale. |
|--|--------|-----------------------------------------------------------------------------------------------------|

|  | · | the Company has the ability to use or sell the intangible asset. |
|--|--------|------------------------------------------------------------------|

|  | · | it is probable that the intangible asset will generate future economic benefits, including existence of a market for the output of the intangible asset or the intangible asset itself or, if the intangible asset is to be used internally, the usefulness of the intangible asset. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | adequate technical, financial and other resources are available to complete development of the intangible asset, as well as the use or sale thereof. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the Company has the ability to reliably measure the expenditure attributable to the intangible asset during its development. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------|

|  | p. | Employee benefits |
|--|----|-------------------|

|  | 1) | Pension and severance pay obligations |
|--|----|---------------------------------------|

----

|  | p. | Employee benefits (cont.) |
|--|----|---------------------------|

|  | 2) | Vacation days and recreation pay |
|--|----|----------------------------------|

|  | 3) | Share-based payments |
|--|----|----------------------|

|  | · | including any market performance conditions (for example, the Company’s share price); and |
|--|--------|-------------------------------------------------------------------------------------------------|

|  | · | excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and the employee remaining with the entity over a specified time period). |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | q. | Loss per share |
|--|----|----------------|

|  | 1) | Basic |
|--|----|-------|

|  | 2) | Diluted |
|--|----|---------|

----

|  | r. | Changes in accounting policy and disclosures |
|--|----|----------------------------------------------|

----

|  | a. | Market risk |
|--|----|-------------|

|  | 1) | Concentration of currency risk |
|--|----|--------------------------------|

|                       |   | December 31, 2016 |   |
|----------------------------|--------|-------------------|--------|
|                       |   | Income (loss)     |   |   | Value on |   |   | Income (loss) |   |
| Sensitive instrument       |   | 10% increase      |   |   | 5% increase |   |   | balance sheet |   |   | 5% decrease |   |   | 10% decrease |   |
|                       |   | in USD thousands  |   |
| NIS-linked balances:       |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents  |   |              | (33    | ) |   |   | (18 | ) |   |   | 368 |   |   |   | 19 |   |   |   | 41 |   |
| Other receivables          |   |              | (20    | ) |   |   | (11 | ) |   |   | 223 |   |   |   | 12 |   |   |   | 25 |   |
| Trade payables             |   |              | 40     |   |   |   | 21 |   |   |   | (438 | ) |   |   | (23 | ) |   |   | (49 | ) |
| Other payables             |   |              | 82     |   |   |   | 43 |   |   |   | (901 | ) |   |   | (47 | ) |   |   | (100 | ) |
| Total NIS-linked balances  |   |              | 69     |   |   |   | 35 |   |   |   | (748 | ) |   |   | (39 | ) |   |   | (83 | ) |
| Euro-linked trade payables |   |              | 36     |   |   |   | 19 |   |   |   | (413 | ) |   |   | (21 | ) |   |   | (44 | ) |
| Total                      |   |              | 105    |   |   |   | 54 |   |   |   | (1,161 | ) |   |   | (60 | ) |   |   | (127 | ) |

|                       |   | December 31, 2015 |   |
|----------------------------|--------|-------------------|--------|
|                       |   | Income (loss)     |   |   | Value on |   |   | Income (loss) |   |
| Sensitive instrument       |   | 10% increase      |   |   | 5% increase |   |   | balance sheet |   |   | 5% decrease |   |   | 10% decrease |   |
|                       |   | in USD thousands  |   |
| NIS-linked balances:       |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents  |   |              | (199   | ) |   |   | (104 | ) |   |   | 2,192 |   |   |   | 244 |   |   |   | 115 |   |
| Other receivables          |   |              | (24    | ) |   |   | (13 | ) |   |   | 266 |   |   |   | 30 |   |   |   | 14 |   |
| Trade payables             |   |              | 34     |   |   |   | 18 |   |   |   | (374 | ) |   |   | (42 | ) |   |   | (20 | ) |
| Other payables             |   |              | 103    |   |   |   | 54 |   |   |   | (1,137 | ) |   |   | (126 | ) |   |   | (60 | ) |
| Total NIS-linked balances  |   |              | (86    | ) |   |   | (45 | ) |   |   | 947 |   |   |   | 106 |   |   |   | 49 |   |
| Euro-linked trade payables |   |              | (16    | ) |   |   | (8 | ) |   |   | (169 | ) |   |   | 19 |   |   |   | 9 |   |
| Total                      |   |              | (102   | ) |   |   | (53 | ) |   |   | 778 |   |   |   | 125 |   |   |   | 58 |   |

----

|  | a. | Market risk (cont.) |
|--|----|---------------------|

|  | 1) | Concentration of currency risk (cont.) |
|--|----|----------------------------------------|

|                               |   | Exchange rate of NIS per $1 |   |   | Exchange rate of Euro per $1 |   |
|------------------------------------|--------|-----------------------------|--------|--------|------------------------------|--------|
| As of December 31:                 |   |                        |   |   |                         |   |
| 2015                               |   |                        | 3.902  |   |                         |   | 0.919 |   |
| 2016                               |   |                        | 3.845  |   |                         |   | 0.951 |   |
|                               |   |                        |   |   |                         |   |   |   |
| Percentage increase (decrease) in: |   |                        |   |   |                         |   |   |   |
| 2015                               |   |                        | 0.3    | %      |                         |   | 11.7 | % |
| 2016                               |   |                        | (1.5   | )%     |                         |   | 3.5 | % |

|                                                                         |   | December 31, 2015 |   |   | December 31, 2016 |   |
|------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                         |   | Dollar            |   |   | NIS               |   |   | Other currencies |   |   | Dollar |   |   | NIS |   |   | Other currencies |   |
|                                                                         |   | USD in thousands  |   |   | USD in thousands  |   |
| Assets:                                                                      |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets:                                                              |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                    |   |              | 3,352  |   |              |   | 2,192 |   |   |   | - |   |   |   | 2,097 |   |   |   | 368 |   |   |   | 4 |   |
| Short term bank deposits                                                     |   |              | 42,119 |   |              |   | - |   |   |   | - |   |   |   | 33,154 |   |   |   |   |   |   |   |   |   |
|    Other receivables                                          |   |              |   |   |              |   | 266 |   |   |   | 25 |   |   |   | - |   |   |   | 223 |   |   |   |   |   |
| Total assets                                                                 |   |              | 45,471 |   |              |   | 2,458 |   |   |   | 25 |   |   |   | 35,251 |   |   |   | 591 |   |   |   | 4 |   |
|                                                                         |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                 |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities:                                                         |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Current maturities of bank loan    |   |              | 93     |   |              |   | - |   |   |   | - |   |   |   | 93 |   |   |   | - |   |   |   | - |   |
| Accounts payable and accruals:                                               |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade                                                                        |   |              | 1,218  |   |              |   | 374 |   |   |   | 318 |   |   |   | 1,631 |   |   |   | 438 |   |   |   | 521 |   |
| Other                                                                        |   |              | -      |   |              |   | 1,137 |   |   |   | - |   |   |   |   |   |   |   | 901 |   |   |   | 77 |   |
|  Non-current liabilities                                                |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Long-term bank loan, net of current maturities |   |              | 344    |   |              |   | - |   |   |   | - |   |   |   | 250 |   |   |   | - |   |   |   | - |   |
|                                                                         |   |              | 1,655  |   |              |   | 1,511 |   |   |   | 318 |   |   |   | 1,974 |   |   |   | 1,340 |   |   |   | 598 |   |
| Net asset value                                                              |   |              | 43,816 |   |              |   | 947 |   |   |   | (293 | ) |   |   | 33,277 |   |   |   | (749 | ) |   |   | (594 | ) |

----

|  | a. | Market risk (cont.) |
|--|----|---------------------|

|  | 2) | Fair value of financial instruments |
|--|----|-------------------------------------|

|  | 3) | Exposure to market risk and management thereof |
|--|----|------------------------------------------------|

|  | 4) | Interest rate risk |
|--|----|--------------------|

|  | b. | Credit risk |
|--|----|-------------|

|                      |   | December 31,     |   |
|---------------------------|--------|------------------|--------|
|                      |   | 2015             |   |   | 2016 |   |
|                      |   | in USD thousands |   |
| Assets:                   |   |             |   |   |   |   |
| Cash and cash equivalents |   |             | 5,544  |   |   |   | 2,469 |   |
| Short-term bank deposits  |   |             | 42,119 |   |   |   | 33,154 |   |
| Other receivables         |   |             | 291    |   |   |   | 223 |   |
| Total                     |   |             | 47,954 |   |   |   | 35,846 |   |

|  | c. | Liquidity risk |
|--|----|----------------|

----

|  | c. | Liquidity risk (cont.) |
|--|----|------------------------|

|  | d. | Financial instruments |
|--|----|-----------------------|

|  | e. | Fair value estimations |
|--|----|------------------------|

----

|                     |   | December 31,     |   |
|--------------------------|--------|------------------|--------|
|                     |   | 2015             |   |   | 2016 |   |
|                     |   | in USD thousands |   |
|                     |   |             |   |   |   |   |
| Cash on hand and in bank |   |             | 747    |   |   |   | 969 |   |
| Short-term bank deposits |   |             | 4,797  |   |   |   | 1,500 |   |
|                     |   |             | 5,544  |   |   |   | 2,469 |   |

----

|                                   |   | Cost             |   |   | Accumulated depreciation |   |   |             |   |
|----------------------------------------|--------|------------------|--------|--------|--------------------------|--------|--------|------------------|--------|
|                                   |   | Balance at       |   |   | Additions                |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                                   |   | beginning        |   |   | during                   |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                                   |   | of year          |   |   | year                     |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   | 2013 |   |   | 2014 |   |
|                                   |   | In USD thousands |   |   | In USD thousands         |   |   | In USD thousands |   |
| Composition in 2014                    |   |             |   |   |                     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office furniture and equipment         |   |             | 233    |   |                     |   | -      |             |   |   | - |   |   |   | 233 |   |   |   | 92 |   |   |   | 13 |   |   |   | - |   |   |   | 105 |   |   |   | 141 |   |   |   | 128 |   |
| Computers and communications equipment |   |             | 349    |   |                     |   | 40     |             |   |   | - |   |   |   | 389 |   |   |   | 281 |   |   |   | 53 |   |   |   | - |   |   |   | 334 |   |   |   | 67 |   |   |   | 55 |   |
| Laboratory equipment, net              |   |             | 563    |   |                     |   | 63     |             |   |   | - |   |   |   | 626 |   |   |   | 172 |   |   |   | 156 |   |   |   | - |   |   |   | 328 |   |   |   | 392 |   |   |   | 298 |   |
| Leasehold improvements                 |   |             | 191    |   |                     |   | 213    |             |   |   | - |   |   |   | 404 |   |   |   | 156 |   |   |   | 8 |   |   |   | - |   |   |   | 164 |   |   |   | 35 |   |   |   | 240 |   |
|                                   |   |             | 1,336  |   |                     |   | 316    |             |   |   | - |   |   |   | 1,652 |   |   |   | 701 |   |   |   | 230 |   |   |   | - |   |   |   | 931 |   |   |   | 635 |   |   |   | 721 |   |
|                                   |   |             |   |   |                     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | Cost             |   |   | Accumulated depreciation |   |   |             |   |   |   |   |   |   |
|                                   |   | Balance at       |   |   | Additions                |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                                   |   | beginning        |   |   | during                   |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                                   |   | of year          |   |   | year                     |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   |   | 2014 |   |   |   | 2015 |   |
|                                   |   | In USD thousands |   |   | In USD thousands         |   |   | In USD thousands |   |
| Composition in 2015                    |   |             |   |   |                     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office furniture and equipment         |   |             | 233    |   |                     |   | 177    |             |   |   | (212 | ) |   |   | 198 |   |   |   | 105 |   |   |   | 120 |   |   |   | (212 | ) |   |   | 13 |   |   |   | 128 |   |   |   | 185 |   |
| Computers and communications equipment |   |             | 389    |   |                     |   | 78     |             |   |   | (21 | ) |   |   | 446 |   |   |   | 334 |   |   |   | 42 |   |   |   | (21 | ) |   |   | 355 |   |   |   | 55 |   |   |   | 91 |   |
| Laboratory equipment                   |   |             | 626    |   |                     |   | 568    |             |   |   | - |   |   |   | 1,194 |   |   |   | 328 |   |   |   | 154 |   |   |   | - |   |   |   | 482 |   |   |   | 298 |   |   |   | 712 |   |
| Leasehold improvements                 |   |             | 404    |   |                     |   | 1,791  |             |   |   | (170 | ) |   |   | 2,025 |   |   |   | 164 |   |   |   | 110 |   |   |   | (170 | ) |   |   | 104 |   |   |   | 240 |   |   |   | 1,921 |   |
|                                   |   |             | 1,652  |   |                     |   | 2,614  |             |   |   | (403 | ) |   |   | 3,863 |   |   |   | 931 |   |   |   | 426 |   |   |   | (403 | ) |   |   | 954 |   |   |   | 721 |   |   |   | 2,909 |   |

----

|                                   |   | Cost             |   |   | Accumulated depreciation |   |   |             |   |
|----------------------------------------|--------|------------------|--------|--------|--------------------------|--------|--------|------------------|--------|
|                                   |   | Balance at       |   |   | Additions                |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                                   |   | beginning        |   |   | during                   |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                                   |   | of year          |   |   | year                     |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   | 2015 |   |   | 2016 |   |
|                                   |   | In USD thousands |   |   | In USD thousands         |   |   | In USD thousands |   |
| Composition in 2016                    |   |             |   |   |                     |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Office furniture and equipment         |   |             | 198    |   |                     |   | -      |             |   |   | - |   |   |   | 198 |   |   |   | 13 |   |   |   | 12 |   |   |   | - |   |   |   | 25 |   |   |   | 185 |   |   |   | 173 |   |
| Computers and communications equipment |   |             | 446    |   |                     |   | 43     |             |   |   | - |   |   |   | 489 |   |   |   | 355 |   |   |   | 53 |   |   |   | - |   |   |   | 408 |   |   |   | 91 |   |   |   | 81 |   |
| Laboratory equipment                   |   |             | 1,194  |   |                     |   | 104    |             |   |   | - |   |   |   | 1,298 |   |   |   | 482 |   |   |   | 188 |   |   |   | - |   |   |   | 670 |   |   |   | 712 |   |   |   | 628 |   |
| Leasehold improvements                 |   |             | 2,025  |   |                     |   | 3      |             |   |   | - |   |   |   | 2,028 |   |   |   | 104 |   |   |   | 201 |   |   |   | - |   |   |   | 305 |   |   |   | 1,921 |   |   |   | 1,723 |   |
|                                   |   |             | 3,863  |   |                     |   | 150    |             |   |   | - |   |   |   | 4,013 |   |   |   | 954 |   |   |   | 454 |   |   |   | - |   |   |   | 1,408 |   |   |   | 2,909 |   |   |   | 2,605 |   |

----

|                  |   | Cost             |   |   | Accumulated depreciation and impairment |   |   |             |   |
|-----------------------|--------|------------------|--------|--------|-----------------------------------------|--------|--------|------------------|--------|
|                  |   | Balance at       |   |   | Additions                               |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                  |   | beginning        |   |   | during                                  |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                  |   | of year          |   |   | year                                    |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   | 2013 |   |   | 2014 |   |
|                  |   | In USD thousands |   |   | In USD thousands                        |   |   | In USD thousands |   |
| Composition in 2014   |   |             |   |   |                                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intellectual property |   |             | 387    |   |                                    |   | -      |             |   |   | (194 | ) |   |   | 193 |   |   |   | 193 |   |   |   | - |   |   |   | (97 | ) |   |   | 96 |   |   |   | 194 |   |   |   | 97 |   |
| Computer software     |   |             | 272    |   |                                    |   | 5      |             |   |   | - |   |   |   | 277 |   |   |   | 240 |   |   |   | 17 |   |   |   | - |   |   |   | 257 |   |   |   | 32 |   |   |   | 20 |   |
|                  |   |             | 659    |   |                                    |   | 5      |             |   |   | (194 | ) |   |   | 470 |   |   |   | 433 |   |   |   | 17 |   |   |   | (97 | ) |   |   | 353 |   |   |   | 226 |   |   |   | 117 |   |
|                  |   |             |   |   |                                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  |   | Cost             |   |   | Accumulated depreciation and impairment |   |   |             |   |   |   |   |   |   |
|                  |   | Balance at       |   |   | Additions                               |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                  |   | beginning        |   |   | during                                  |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                  |   | of year          |   |   | year                                    |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   |   | 2014 |   |   |   | 2015 |   |
|                  |   | In USD thousands |   |   | In USD thousands                        |   |   | In USD thousands |   |
| Composition in 2015   |   |             |   |   |                                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intellectual property |   |             | 193    |   |                                    |   | -      |             |   |   | - |   |   |   | 193 |   |   |   | 96 |   |   |   | - |   |   |   | - |   |   |   | 96 |   |   |   | 97 |   |   |   | 97 |   |
| Computer software     |   |             | 277    |   |                                    |   | 51     |             |   |   | - |   |   |   | 328 |   |   |   | 257 |   |   |   | 16 |   |   |   | - |   |   |   | 273 |   |   |   | 20 |   |   |   | 55 |   |
|                  |   |             | 470    |   |                                    |   | 51     |             |   |   | - |   |   |   | 521 |   |   |   | 353 |   |   |   | 16 |   |   |   | - |   |   |   | 369 |   |   |   | 117 |   |   |   | 152 |   |
|                  |   |             |   |   |                                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  |   | Cost             |   |   | Accumulated depreciation and impairment |   |   |             |   |   |   |   |   |   |
|                  |   | Balance at       |   |   | Additions                               |   |   | Deletions        |   |   | Balance at |   |   | Balance at |   |   | Additions |   |   | Deletions |   |   | Balance at |   |   | Net book value |   |
|                  |   | beginning        |   |   | during                                  |   |   | during           |   |   | end of |   |   | beginning |   |   | during |   |   | during |   |   | end of |   |   | December 31, |   |
|                  |   | of year          |   |   | year                                    |   |   | year             |   |   | year |   |   | of year |   |   | year |   |   | year |   |   | year |   |   |   | 2015 |   |   |   | 2016 |   |
|                  |   | In USD thousands |   |   | In USD thousands                        |   |   | In USD thousands |   |
| Composition in 2016   |   |             |   |   |                                    |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Intellectual property |   |             | 193    |   |                                    |   | -      |             |   |   | - |   |   |   | 193 |   |   |   | 96 |   |   |   | - |   |   |   | - |   |   |   | 96 |   |   |   | 97 |   |   |   | 97 |   |
| Computer software     |   |             | 328    |   |                                    |   | 57     |             |   |   | - |   |   |   | 385 |   |   |   | 273 |   |   |   | 28 |   |   |   | - |   |   |   | 301 |   |   |   | 55 |   |   |   | 84 |   |
|                  |   |             | 521    |   |                                    |   | 57     |             |   |   | - |   |   |   | 578 |   |   |   | 369 |   |   |   | 28 |   |   |   | - |   |   |   | 397 |   |   |   | 152 |   |   |   | 181 |   |

----

|  | a. | Composition |
|--|----|-------------|

|                    |   | December 31,     |   |
|-------------------------|--------|------------------|--------|
|                    |   | 2015             |   |   | 2016 |   |
|                    |   | In USD thousands |   |
|                    |   |             |   |   |   |   |
| Loan balance            |   |             | 437    |   |   |   | 343 |   |
| Less current maturities |   |             | (93    | ) |   |   | (93 | ) |
|                    |   |             | 344    |   |   |   | 250 |   |

|  | b. | Future repayments |
|--|----|-------------------|

| 2018              |   |   | 93  |   |
|-------------------|--------|--------|-----|--------|
| 2019 through 2020 |   |   | 157 |   |
|              |   |   | 250 |   |

|  | a. | Share capital |
|--|----|---------------|

|                             |   | Number of Ordinary Shares |        |
|----------------------------------|--------|---------------------------|-------------|
|                             |   | December 31,              |        |
|                             |   | 2015                      |        |   | 2016 |   |
|                             |   |                      |        |   |   |   |
| Authorized share capital         |   |                      | 150,000,000 |   |   |   | 150,000,000 |   |
|                             |   |                      |        |   |   |   |   |   |
| Issued and paid-up share capital |   |                      | 54,818,057  |   |   |   | 57,033,355 |   |

|                                      |   | In USD and NIS |       |
|-------------------------------------------|--------|----------------|------------|
|                                      |   | December 31,   |       |
|                                      |   | 2015           |       |   | 2016 |   |
|                                      |   |           |       |   |   |   |
| Authorized share capital (in NIS)         |   |           | 15,000,000 |   |   |   | 15,000,000 |   |
|                                      |   |           |       |   |   |   |   |   |
| Issued and paid-up share capital (in NIS) |   |           | 5,481,806  |   |   |   | 5,703,336 |   |
|                                      |   |           |       |   |   |   |   |   |
| Issued and paid-up share capital (in USD) |   |           | 1,455,159  |   |   |   | 1,513,294 |   |

----

|  | b. | Rights related to shares The ordinary shares confer upon their holders voting and dividend rights and the right to receive assets of the Company upon its liquidation. As of December 31, 2015 and 2016, all outstanding share capital consisted of ordinary shares. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c. | Changes in the Company’s equity |
|--|----|---------------------------------------|

|  | 1) | In February 2012, BioLineRx issued as part of private placement, warrants to purchase up to 2,622,157 ADSs at an exercise price of $3.57 per ADS. The warrants are exercisable for a term of five years from the date of their issuance. Since the exercise price was not deemed to be fixed, the warrants did not qualify for classification as an equity instrument and have therefore been classified as a non-current derivative financial liability. The amount of the private placement consideration allocated to the warrants was approximately $4,800,000 as of the issuance date, based on their fair value as calculated on the basis of the Black-Scholes model. The changes in fair value for the three years ended December 31, 2014, 2015 and 2016, of approximately $2,000,000, $700,000 and $110,000, respectively, have been recorded as non-operating income on the statement of comprehensive loss. The warrants expired in full in February 2017, without being exercised. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2) | In March 2014, the Company completed an underwritten public offering of 9,660,000 ADSs at a public offering price of $2.50 per ADS. The offering raised a total of $24.2 million, with net proceeds of approximately $22.3 million, after deducting fees and expenses. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3) | In March 2015, the Company completed an underwritten public offering of 14,375,000 ADSs at a public offering price of $2.00 per ADS. The offering raised a total of $28.8 million, with net proceeds of approximately $26.4 million, after deducting fees and expenses. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | d. | Share purchase agreement |
|--|----|--------------------------|

----

|  | d. | Share purchase agreement (cont.) |
|--|----|----------------------------------|

|  | e. | Share-based payments |
|--|----|----------------------|

|  | 1) | Share Incentive plan – general |
|--|----|--------------------------------------|

----

|  | e. | Share-based payments (cont.) |
|--|----|------------------------------|

|  | 2) | Employee share incentive plan: |
|--|----|--------------------------------|

|                             |   | Year ended December 31, |      |
|----------------------------------|--------|-------------------------|-----------|
|                             |   | 2014                    |      |   | 2015 |   |   | 2016 |   |
|                             |   | Number of options       |      |   | Weighted average exercise price(in NIS) |   |   | Number of options |   |   | Weighted average exerciseprice(in NIS) |   |   | Number of options |   |   | Weighted average exercise price(in NIS) |   |
| Outstanding at beginning of year |   |                    | 1,861,280 |   |   |   | 12.0 |   |   |   | 3,187,092 |   |   |   | 9.1 |   |   |   | 3,500,262 |   |   |   | 8.7 |   |
| Granted*                         |   |                    | 1,478,200 |   |   |   | 5.7 |   |   |   | 500,800 |   |   |   | 6.8 |   |   |   | 2,505,684 |   |   |   | 3.8 |   |
| Forfeited and expired            |   |                    | (150,985  | ) |   |   | 13.0 |   |   |   | (187,630 | ) |   |   | 11.1 |   |   |   | (1,435,990 | ) |   |   | 7.2 |   |
| Exercised                        |   |                    | (1,403    | ) |   |   | 4.0 |   |   |   | - |   |   |   | - |   |   |   | (12,029 | ) |   |   | 0.4 |   |
| Outstanding at end of year       |   |                    | 3,187,092 |   |   |   | 9.1 |   |   |   | 3,500,262 |   |   |   | 8.7 |   |   |   | 4,557,927 |   |   |   | 6.5 |   |
| Exercisable at end of year       |   |                    | 641,960   |   |   |   | 15.1 |   |   |   | 1,169,540 |   |   |   | 12.6 |   |   |   | 1,786,209 |   |   |   | 9.4 |   |

----

|  | e. | Share-based payments (cont.) |
|--|----|------------------------------|

|                           |   |   | Year ended December 31,      |      |
|--------------------------------|--------|--------|------------------------------|-----------|
|                           |   |   | 2014                         |      |   | 2015 |   |   | 2016 |   |
| Range ofexerciseprices(in NIS) |   |   | Number of optionsoutstanding |      |   | Weighted average remaining contractual life (in yrs.) |   |   | Number of options outstanding |   |   | Weighted average remainingcontractual life (in yrs.) |   |   | Number of options outstanding |   |   | Weighted average remaining contractual life (in yrs.) |   |
| Up to 10.00                    |   |   |                         | 1,717,686 |   |   |   | 6.61 |   |   |   | 2,117,886 |   |   |   | 5.76 |   |   |   | 3,502,043 |   |   |   | 6.47 |   |
| 10.01-20.00                    |   |   |                         | 1,406,609 |   |   |   | 4.84 |   |   |   | 1,334,866 |   |   |   | 3.81 |   |   |   | 1,037,436 |   |   |   | 2.38 |   |
| 20.01-30.00                    |   |   |                         | 10,903    |   |   |   | 1.82 |   |   |   | 10,340 |   |   |   | 0.88 |   |   |   | 3,278 |   |   |   | 0.74 |   |
| 30.01-40.00                    |   |   |                         | 11,125    |   |   |   | 2.36 |   |   |   | 10,000 |   |   |   | 1.55 |   |   |   | 10,000 |   |   |   | 0.55 |   |
| Over 40.00                     |   |   |                         | 40,770    |   |   |   | 1.34 |   |   |   | 27,170 |   |   |   | 1.00 |   |   |   | 5,170 |   |   |   | 0.38 |   |
|                           |   |   |                         | 3,187,092 |   |   |   | 5.73 |   |   |   | 3,500,262 |   |   |   | 4.96 |   |   |   | 4,557,927 |   |   |   | 5.52 |   |

|                                |   | 2014   |   |   | 2015   |   |   | 2016   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Expected dividend yield             |   |   | 0      | %      |   |   | 0      | %      |   |   | 0 | % |
| Expected volatility                 |   |   | 65     | %      |   |   | 68     | %      |   |   | 66 | % |
| Risk-free interest rate             |   |   | 2      | %      |   |   | 2      | %      |   |   | 2 | % |
| Expected life of options (in years) |   |   | 5      |   |   |   | 5      |   |   |   | 5 |   |

----

|  | e. | Share-based payments (cont.) |
|--|----|------------------------------|

|  | 3) | Stock options to consultants |
|--|----|------------------------------|

|  | 4) | Grant of equity instruments subsequent to balance sheet date |
|--|----|--------------------------------------------------------------|

----

|  | a. | Corporate taxation in Israel |
|--|----|------------------------------|

|  | b. | Approved enterprise benefits |
|--|----|------------------------------|

----

|  | c. |  Tax loss carryforwards |
|--|----|------------------------------|

|  | d. | Tax assessments |
|--|----|-----------------|

|  | e. | Theoretical taxes |
|--|----|-------------------|

|                                                                                                                             |   | Year ended December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                             |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                                                                                                             |   |                    |   |   | USD in |   |   |   |   |   | USD in |   |   |   |   |   | USD in |   |
|                                                                                                                             |   |                    |   |   | thousands |   |   |   |   |   | thousands |   |   |   |   |   | thousands |   |
| Loss before taxes                                                                                                                |   |                    | 26.5   | % |   |   | (11,076 | ) |   |   | 26.5 | % |   |   | (14,400 | ) |   |   | 25.0 | % |   |   | (15,841 | ) |
|                                                                                                                             |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Theoretical tax benefit                                                                                                          |   |                    |   |   |   |   | (2,935 | ) |   |   |   |   |   |   | (3,816 | ) |   |   |   |   |   |   | (3,960 | ) |
| Disallowed deductions (tax exempt income):                                                                                       |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain on adjustment of warrants to fair value                                                                                     |   |                    |   |   |   |   | (915 | ) |   |   |   |   |   |   | (342 | ) |   |   |   |   |   |   | (52 | ) |
| Share-based compensation                                                                                                         |   |                    |   |   |   |   | 280 |   |   |   |   |   |   |   | 305 |   |   |   |   |   |   |   | 269 |   |
| Other                                                                                                                            |   |                    |   |   |   |   | 15 |   |   |   |   |   |   |   | 14 |   |   |   |   |   |   |   | 15 |   |
| Increase in taxes for tax losses and timing differences incurred in the reporting year for which deferred taxes were not created |   |                    |   |   |   |   | 3,555 |   |   |   |   |   |   |   | 3,839 |   |   |   |   |   |   |   | 3,728 |   |
| Taxes on income for the reported year                                                                                            |   |                    |   |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |

----

|                                                      |   | Year ended December 31, |    |
|-----------------------------------------------------------|--------|-------------------------|---------|
|                                                      |   | 2014                    |    |   | 2015 |   |   | 2016 |   |
|                                                      |   | In USD thousands        |    |
| Loss attributed to ordinary shares                        |   |                    | (11,076 | ) |   |   | (14,400 | ) |   |   | (15,841 | ) |
| Number of shares used in basic calculation (in thousands) |   |                    | 32,434  |   |   |   | 51,406 |   |   |   | 56,145 |   |
|                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |
|                                                      |   | in USD                  |    |
| Basic and diluted loss per ordinary share                 |   |                    | (0.34   | ) |   |   | (0.28 | ) |   |   | (0.28 | ) |

|  | a. | Commitments |
|--|----|-------------|

|  | 1) | Obligation to pay royalties to the State of Israel |
|--|----|----------------------------------------------------|

----

|  | a. | Commitments (cont.) |
|--|----|---------------------|

|  | 2) | Licensing agreements |
|--|----|----------------------|

----

|  | a. | Commitments (cont.) |
|--|----|---------------------|

|  | 2) | Licensing agreements (cont.) |
|--|----|------------------------------|

----

|  | a. | Commitments (cont.) |
|--|----|---------------------|

|  | 3) | Lease agreements |
|--|----|------------------|

|  | a) | In August 2014, the Company entered into an operating lease agreement in connection with the lease of new premises. Payments under the new lease commenced in June 2015 and will expire in June 2020. The monthly lease fee is approximately $27,000 (including maintenance fees and parking). The Company has the option to extend the lease for 4 additional lease periods totaling up to an additional 10 years, each option at a 5% increase to the preceding lease payment amount. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b) | The Company has entered into operating lease agreements in connection with a number of vehicles. The lease periods are generally for three years. The annual lease fees, linked to the CPI, are approximately $210,000. To secure the terms of the lease agreements, the Company has made certain prepayments to the leasing companies, representing approximately two months of lease payments. These amounts have been recorded as prepaid expenses. See also Note 15b. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | Contingent liabilities |
|--|----|------------------------|

|                                                                                                    |   | Year ended December 31, |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                    |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                                                                                    |   | In USD thousands        |   |
| Benefits to related parties:                                                                            |   |                    |   |   |   |   |   |   |   |
| Compensation and benefits to senior management, including benefit component of equity instrument grants |   |                    | 2,084  |   |   |   | 1,843 |   |   |   | 1,912 |   |
| Number of individuals to which this benefit related                                                     |   |                    | 5      |   |   |   | 5 |   |   |   | 6 |   |
| Compensation and benefits to directors, including benefit component of equity instrument grants         |   |                    | 218    |   |   |   | 233 |   |   |   | 316 |   |
| Number of individuals to which this benefit related                                                     |   |                    | 7      |   |   |   | 7 |   |   |   | 7 |   |

----

|                                            |   | Year ended December 31, |   |
|-------------------------------------------------|--------|-------------------------|--------|
|                                            |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                            |   | In USD thousands        |   |
| Salaries and other short-term employee benefits |   |                    | 1,704  |   |   |   | 1,412 |   |   |   | 1,609 |   |
| Post-employment benefits                        |   |                    | 130    |   |   |   | 120 |   |   |   | 129 |   |
| Other long-term benefits                        |   |                    | 30     |   |   |   | 27 |   |   |   | 30 |   |
| Share-based compensation                        |   |                    | 438    |   |   |   | 517 |   |   |   | 460 |   |
|                                            |   |                    | 2,302  |   |   |   | 2,076 |   |   |   | 2,228 |   |

----

|  | a. | Other receivables |
|--|----|-------------------|

|         |   | December 31,     |   |
|--------------|--------|------------------|--------|
|         |   | 2015             |   |   | 2016 |   |
|         |   | In USD thousands |   |
| Institutions |   |             | 255    |   |   |   | 198 |   |
| Other        |   |             | 36     |   |   |   | 25 |   |
|         |   |             | 291    |   |   |   | 223 |   |

|  | b. | Long-term prepaid expenses |
|--|----|----------------------------|

|  | c. | Accounts payable and accruals |
|--|----|-------------------------------|

|                                    |   | December 31,     |   |
|-----------------------------------------|--------|------------------|--------|
|                                    |   | 2015             |   |   | 2016 |   |
|                                    |   | In USD thousands |   |
| 1)   Trade:                   |   |             |   |   |   |   |
| Accounts payable:                       |   |             |   |   |   |   |
| Overseas                                |   |             | 1,536  |   |   |   | 2,152 |   |
| In Israel                               |   |             | 374    |   |   |   | 438 |   |
|                                    |   |             | 1,910  |   |   |   | 2,590 |   |
| 2)   Other:              |   |             |   |   |   |   |   |   |
| Accrued expenses                        |   |             | 705    |   |   |   | 560 |   |
| Accrual for vacation and recreation pay |   |             | 213    |   |   |   | 186 |   |
| Payroll and related expenses            |   |             | 209    |   |   |   | 217 |   |
| Other                                   |   |             | 10     |   |   |   | 15 |   |
|                                    |   |             | 1,137  |   |   |   | 978 |   |
|                                    |   |             |   |   |   |   |   |   |

----

|  | d. | Research and development expenses |
|--|----|-----------------------------------|

|                                             |   | Year ended December 31, |   |
|--------------------------------------------------|--------|-------------------------|--------|
|                                             |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                             |   | In USD thousands        |   |
| Research and development services                |   |                    | 6,050  |   |   |   | 5,455 |   |   |   | 5,501 |   |
| Payroll and related expenses, including vehicles |   |                    | 3,771  |   |   |   | 3,754 |   |   |   | 3,475 |   |
| Lab, occupancy and telephone                     |   |                    | 940    |   |   |   | 926 |   |   |   | 769 |   |
| Professional fees                                |   |                    | 682    |   |   |   | 772 |   |   |   | 678 |   |
| Depreciation and amortization                    |   |                    | 253    |   |   |   | 414 |   |   |   | 452 |   |
| Write-off of intellectual property               |   |                    | 97     |   |   |   | - |   |   |   | - |   |
| Other                                            |   |                    | 73     |   |   |   | 168 |   |   |   | 302 |   |
|                                             |   |                    | 11,866 |   |   |   | 11,489 |   |   |   | 11,177 |   |

|  | e. | Sales and marketing expenses |
|--|----|------------------------------|

|                                             |   | Year ended December 31, |   |
|--------------------------------------------------|--------|-------------------------|--------|
|                                             |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                             |   | In USD thousands        |   |
| Payroll and related expenses, including vehicles |   |                    | 668    |   |   |   | 690 |   |   |   | 659 |   |
| Marketing                                        |   |                    | 799    |   |   |   | 243 |   |   |   | 600 |   |
| Overseas travel                                  |   |                    | 122    |   |   |   | 70 |   |   |   | 93 |   |
|                                             |   |                    | 1,589  |   |   |   | 1,003 |   |   |   | 1,352 |   |

----

|  | f. | General and administrative expenses |
|--|----|-------------------------------------|

|                                             |   | Year ended December 31, |   |
|--------------------------------------------------|--------|-------------------------|--------|
|                                             |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                             |   | In USD thousands        |   |
| Payroll and related expenses, including vehicles |   |                    | 2,283  |   |   |   | 2,003 |   |   |   | 2,172 |   |
| Professional fees                                |   |                    | 884    |   |   |   | 1,053 |   |   |   | 1,144 |   |
| Insurance                                        |   |                    | 146    |   |   |   | 155 |   |   |   | 154 |   |
| Depreciation                                     |   |                    | 16     |   |   |   | 27 |   |   |   | 30 |   |
| Other                                            |   |                    | 471    |   |   |   | 466 |   |   |   | 484 |   |
|                                             |   |                    | 3,800  |   |   |   | 3,704 |   |   |   | 3,984 |   |

|  | g. | Non-operating income, net |
|--|----|---------------------------|

|                                                                     |   | Year ended December 31, |   |
|--------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                     |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                                                     |   | In USD thousands        |   |
| Issuance costs                                                           |   |                    | (103   | ) |   |   | - |   |   |   | - |   |
| Changes in fair value of warrants                                        |   |                    | 3,454  |   |   |   | 1,292 |   |   |   | 207 |   |
| Cost reimbursement related to prior year                                 |   |                    | -      |   |   |   | 153 |   |   |   | - |   |
| Initial commitment and finder’s fees associated with LPC agreement |   |                    | (290   | ) |   |   | - |   |   |   | - |   |
| Other                                                                    |   |                    | -      |   |   |   | - |   |   |   | 7 |   |
|                                                                     |   |                    | 3,061  |   |   |   | 1,445 |   |   |   | 214 |   |

|  | h. | Financial income |
|--|----|------------------|

|                                                      |   | Year ended December 31, |   |
|-----------------------------------------------------------|--------|-------------------------|--------|
|                                                      |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                                                      |   | In USD thousands        |   |
| Income from interest and exchange differences on deposits |   |                    | 3,566  |   |   |   | 457 |   |   |   | 480 |   |

|  | i. | Financial expenses |
|--|----|--------------------|

|                 |   | Year ended December 31, |   |
|----------------------|--------|-------------------------|--------|
|                 |   | 2014                    |   |   | 2015 |   |   | 2016 |   |
|                 |   | In USD thousands        |   |
| Exchange differences |   |                    | 428    |   |   |   | 91 |   |   |   | 8 |   |
| Bank commissions     |   |                    | 20     |   |   |   | 15 |   |   |   | 14 |   |
|                 |   |                    | 448    |   |   |   | 106 |   |   |   | 22 |   |

----

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