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<SEC-DOCUMENT>0000891092-07-001915.txt : 20070515
<SEC-HEADER>0000891092-07-001915.hdr.sgml : 20070515
<ACCEPTANCE-DATETIME>20070515153622
ACCESSION NUMBER:		0000891092-07-001915
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070331
FILED AS OF DATE:		20070515
DATE AS OF CHANGE:		20070515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Protalix BioTherapeutics, Inc.
		CENTRAL INDEX KEY:			0001006281
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				650643773
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33357
		FILM NUMBER:		07852751

	BUSINESS ADDRESS:	
		STREET 1:		2 SNUNIT ST
		STREET 2:		SCIENCE PARK, POB 455
		CITY:			CARMIEL
		STATE:			L3
		ZIP:			21000
		BUSINESS PHONE:		972-4-988-9488

	MAIL ADDRESS:	
		STREET 1:		2 SNUNIT ST
		STREET 2:		SCIENCE PARK, POB 455
		CITY:			CARMIEL
		STATE:			L3
		ZIP:			21000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ORTHODONTIX INC
		DATE OF NAME CHANGE:	19980422

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EMBASSY ACQUISITION CORP
		DATE OF NAME CHANGE:	19960124
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>e27320_10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>UNITED STATES<BR>
                                        SECURITIES AND EXCHANGE COMMISSION </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Washington, D.C.
20549 </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>FORM 10-Q </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(Mark One) </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>|X|  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
         For the quarterly period ended March 31, 2007 </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OR </B></FONT></P>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>|_|  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For
the transition period from  __________________ to _______________________  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>001-33357<BR>
                                             (Commission file number) </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>PROTALIX
BIOTHERAPEUTICS, INC. </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(Exact name of
registrant as specified in its charter) </B></FONT></P>

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<HR SIZE=1 noshade ALIGN=CENTER WIDTH=150>



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<TABLE WIDTH=100%>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%><b><FONT SIZE=2><u>Florida</u> <br>
                                                                     </FONT></b>

      <b><FONT SIZE=2><font size="1">(State or
other jurisdiction <br>

              of incorporation or organization)
</font>                                   </FONT></b></TD>
    <TD WIDTH=5%><b>&nbsp;&nbsp;</b></TD>
    <TD WIDTH=30%><b><FONT SIZE=2>&nbsp;</FONT></b></TD>
    <TD WIDTH=5%><b>&nbsp;&nbsp;</b></TD>
    <TD WIDTH=30%><b><FONT SIZE=2><u>65-0643773 </u><br>
      <font size="1">&nbsp;(I.R.S. Employer <br>
       Identification No.) </font></FONT></b></TD>
  </TR>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%>&nbsp;</TD>
    <TD WIDTH=5%>&nbsp;</TD>
    <TD WIDTH=30%>&nbsp;</TD>
    <TD WIDTH=5%>&nbsp;</TD>
    <TD WIDTH=30%>&nbsp;</TD>
  </TR>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%><b><font size=2>2
Snunit Street                           <br>
      Science Park <br>
       POB
455 <br>
      <u>Carmiel,
Israel                                                    21000 </u>
      </font></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b></b></TD>
  </TR>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%><b></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b></b></TD>
  </TR>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%><b><font size=2>(Address
of principal executive office)</font></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b></b></TD>
    <TD WIDTH=5%><b></b></TD>
    <TD WIDTH=30%><b><font size=2>                                     (Zip Code) </font></b></TD>
  </TR>



</TABLE>


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<div align="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>972-4-988-9488</B></U><B><BR>
(Registrant&#146;s telephone number, including area code)</B> </FONT> <!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
</div>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Securities
registered pursuant to Section 12(b) of the Act: </B></FONT></P>



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<TABLE WIDTH=100%>
  <TR ALIGN="center" VALIGN=top>
    <TD WIDTH=30%><FONT SIZE="2"><B>Title
of each class <BR>
Common stock, par value $0.001 per share</B> </FONT> </TD>
    <TD WIDTH=5%>&nbsp;&nbsp;</TD>
    <TD WIDTH=30%><FONT SIZE=2>&nbsp;</FONT></TD>
    <TD WIDTH=5%>&nbsp;&nbsp;</TD>
    <TD WIDTH=30%><FONT SIZE="2"><B>Name of each exchange on which registered<BR>American
Stock Exchange</B> </FONT></TD>
  </TR>
 </TABLE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. (See definition of &#147;large accelerated filer&#148; and &#147;accelerated
filer&#148; in Rule 12b-2 of the Exchange Act). (check one): </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Large
accelerated filer  |_|    Accelerated filer  |_|   Non-accelerated filer  |X| </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes |_| No |X| </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May 1, 2007, approximately 65,657,181 shares of the Registrant&#146;s common stock, $0.001 par
value, were outstanding. </FONT></P>

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<HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>






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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>FORM 10-Q<BR>
                                                 TABLE OF CONTENTS </B></FONT></P>






<table cellpadding=0 cellspacing=0 border=0 width=650 align="center">
  <tr valign=Bottom>

    <th width="66"><font size=1></font></th>
    <th width="551"><font size=1></font></th>
    <th width="33" align="center"><font size="2">Page</font>
      <hr size="1">
    </th>
  </tr>
  <tr valign=Bottom>

    <th width="66" height="16"><font size=1></font></th>
    <th width="551" height="16"><font size="1"><b><font size="2">PART I - FINANCIAL INFORMATION</font></b> </font></th>
    <th width="33" height="16"><font size=1></font></th>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width=66>&nbsp;</td>
    <td align=LEFT width=551><font size="2"><b>Cautionary Statement Regarding Forward-Looking Statements</b> </font></td>
    <td align=RIGHT width=33><font size=2>ii&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 1</font></td>
    <td align=LEFT width="551"><font size=2>Financial Statements</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>&nbsp;</font></td>
    <td align=LEFT width="551"><font size=2>Condensed Consolidated Balance Sheets -</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>As of March 31, 2007 (Unaudited) and December 31, 2006</font></td>
    <td align=RIGHT width="33"><font size=2>1&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>Condensed Consolidated Statements of Operations (Unaudited) -</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>For the Three Months Ended March 31, 2007 and 2006</font></td>
    <td align=RIGHT width="33"><font size=2>2&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>Condensed Consolidated Statement of Changes in Shareholders&#146; Equity -</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>As of March 31, 2007 (Unaudited) and December 31, 2006</font></td>
    <td align=RIGHT width="33"><font size=2>3&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>Condensed Consolidated Statements of Cash Flows (Unaudited) -</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66">&nbsp;</td>
    <td align=LEFT width="551"><font size=2>For the Three Months Ended March 31, 2007 and 2006</font></td>
    <td align=RIGHT width="33"><font size=2>4&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td align=LEFT width="551"><font size=2>Notes to Condensed Consolidated Financial Statements</font></td>
    <td align=RIGHT width="33"><font size=2>6&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 2</font></td>
    <td align=LEFT width="551"><font size=2>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</font></td>
    <td align=RIGHT width="33"><font size=2>9&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 3</font></td>
    <td align=LEFT width="551"><font size=2>Quantitative and Qualitative Disclosures About Market Risk</font></td>
    <td align=RIGHT width="33"><font size=2>12&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 4</font></td>
    <td align=LEFT width="551"><font size=2>Controls and Procedures</font></td>
    <td align=RIGHT width="33"><font size=2>12&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>&nbsp;</font></td>
    <td align=LEFT width="551"><font size="2"><b>PART II - OTHER INFORMATION</b> </font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 1</font></td>
    <td align=LEFT width="551"><font size=2>Legal Proceedings</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 1A</font></td>
    <td align=LEFT width="551"><font size=2>Risk Factors</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 2</font></td>
    <td align=LEFT width="551"><font size=2>Unregistered Sales of Equity Securities and Use of Proceeds</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 3</font></td>
    <td align=LEFT width="551"><font size=2>Defaults Upon Senior Securities</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 4</font></td>
    <td align=LEFT width="551"><font size=2>Submission of Matters to a Vote of Security Holders</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 5</font></td>
    <td align=LEFT width="551"><font size=2>Other Information</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Item 6</font></td>
    <td align=LEFT width="551"><font size=2>Exhibits</font></td>
    <td align=RIGHT width="33"><font size=2>13&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT width="66"><font size=2>Signatures</font></td>
    <td align=LEFT width="551"><font size=2>&nbsp;</font></td>
    <td align=RIGHT width="33"><font size=2>16&nbsp;</font></td>
  </tr>
</table>
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<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
i </FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Except
where the context otherwise requires, the terms, &#147;we&#148;, &#147;us&#148;, &#147;our&#148; or &#147;the Company,&#148;
refer to the business of Protalix BioTherapeutics, Inc. and its consolidated
subsidiaries, and &#147;Protalix&#148; or &#147;Protalix Ltd.&#148; refers to the business of Protalix Ltd.,
our wholly-owned subsidiary and sole operating unit.</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
statements set forth under the captions &#147;Management&#146;s Discussion and Analysis of
Financial Condition and Results of Operations,&#148; and &#147;Risk Factors&#148;, and other statements
included elsewhere in this Quarterly Report on Form 10-Q, which are not historical,
constitute &#147;Forward Looking Statements&#148; within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, including statements regarding the expectations, beliefs, intentions or
strategies for the future. When used in this report, the terms &#147;anticipate,&#148; &#147;believe,&#148;
&#147;estimate,&#148; &#147;expect&#148; and &#147;intend&#148; and words or phrases of similar import, as they relate
to our or our subsidiaries or our management, are intended to identify forward-looking
statements. We intend that all forward-looking statements be subject to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are only predictions and reflect our views as of the date they are made with
respect to future events and financial performance. Forward-looking statements are
subject to many risks and uncertainties that could cause our actual results to differ
materially from any future results expressed or implied by the forward-looking statements. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Examples
of the risks and uncertainties include, but are not limited to the following: </FONT></P>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
inherent risks and uncertainties in developing drug platforms and products of the type we
are                  developing;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>delays
in our preparation and filing of applications for regulatory approval;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>delays
in the approval or potential rejection of any applications we file with the FDA, or other
health                  regulatory authorities;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>any
lack of progress of our research and development (including the results of clinical
trials being                  conducted by us);</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>obtaining
on a timely basis sufficient patient enrollment in our clinical trials; </FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
impact of development of competing therapies and/or technologies by other companies; </FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>our
ability to obtain additional financings required to fund our research programs; </FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
risk that we will not be able to develop a successful sales and marketing organization in
a timely                  manner, if at all;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>our
ability to establish and maintain strategic license, collaboration and distribution
arrangements and                  to manage our relationships with collaborators,
distributors and partners;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>potential
product liability risks and risks of securing adequate levels of product liability and
                 clinical trial insurance coverage;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
availability of reimbursement to patients from health care payors for procedures in which
our                  products are used;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
possibility of infringing a third party&#146;s patents or other intellectual property rights;</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
uncertainty of obtaining patents covering our products and processes and in successfully
enforcing                  them against third parties; and</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%>
  <TR>
    <TD WIDTH=5%></TD>
    <TD WIDTH=2% VALIGN=top><FONT SIZE=3>&#149;</FONT></TD>
    <TD WIDTH=3%></TD>
    <TD WIDTH=90%><FONT SIZE=2>the
possible disruption of our operations due to terrorist                   activities and
armed conflict, including as a result of the                   disruption of operations
of regulatory authorities, our                   subsidiaries, our manufacturing
facilities and our customers,                   suppliers, distributors, couriers,
collaborative partners,                   licensees, and clinical trial sites.</FONT></TD></TR></TABLE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, companies in the pharmaceutical and biotechnology industries have suffered
significant setbacks in advanced clinical trials, even after obtaining promising earlier
trial results. These and other risks and uncertainties are detailed in our Annual Report
on Form 10-K for the year ended December 31, 2006 and described from time to time in our
future reports filed with the Securities and Exchange Commission. We undertake no
obligation to update, and we do not have a policy of updating or revising, these
forward-looking statements. </FONT></P>

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<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
ii</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART I - FINANCIAL
INFORMATION </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 1.  Financial
Statements </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PROTALIX
BIOTHERAPEUTICS, INC. </B><BR>
  (A development stage
company) <br>
   <B>CONDENSED CONSOLIDATED BALANCE SHEETS
</B><BR>
  (U.S. dollars in thousands) </FONT> </P>






<table cellpadding=0 cellspacing=0 border=0 width=600 align="center">


  <tr valign=Bottom>
    <td align=center>&nbsp;</td>
    <td align=center><font size=2><b>March 31, 2007</b> <br>
 </font>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=center>&nbsp;</td>
    <td align=center><font size=2><b>December 31, 2006 </b></font>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
  </tr>
  <tr valign=Bottom>
    <td align=center>&nbsp;</td>
    <td align=center><b><font size=2>(Unaudited)</font></b></td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>
    <td align=center><b><font size=2>ASSETS </font></b></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>CURRENT ASSETS:</b></font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;24,896</font></td>
    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;15,378</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Deposit</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT><font size=2>7,577</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></td>
    <td align=RIGHT><font size=2>2,244</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,336</font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</font></td>
    <td align=RIGHT><font size=2>27,140</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>24,291</font></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>


  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>FUNDS IN RESPECT OF EMPLOYEE<br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RIGHTS UPON RETIREMENT</font></b></td>
    <td align=RIGHT><font size=2>320</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>293</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>PROPERTY AND EQUIPMENT, NET</b></font></td>
    <td align=RIGHT><font size=2>2,898</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>2,404</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;30,358</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;26,988</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CURRENT LIABILITIES -</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accruals:</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;788</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;892</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
    <td align=RIGHT><font size=2>1,442</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,376</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</font></td>
    <td align=RIGHT><font size=2>2,230</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>2,268</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>LONG-TERM LIABILITY</b></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability for employee rights upon retirement</font></td>
    <td align=RIGHT><font size=2>510</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>436</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities</font></td>
    <td align=RIGHT><font size=2>2,740</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>2,704</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>SHAREHOLDERS&#146; EQUITY *</b></font></td>
    <td align=RIGHT><font size=2>27,618</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>24,284</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 align="right" width="40%">
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders&#146; equity</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;30,358</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;26,988</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="50%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="40%">
    </td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Cutoff rule Footnote" FSL="Workstation" -->
<HR SIZE=1 noshade ALIGN=left  WIDTH=75>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>See
Note 1a. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The accompanying
notes are an integral part of the condensed consolidated financial statements. </B></FONT></P>

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<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
1</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PROTALIX
BIOTHERAPEUTICS, INC. </B><BR>
  (A development stage
company) <br>
   <B>CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS <BR>
  </B>(U.S. dollars in thousands, except share and per
share amounts)<BR> (Unaudited) </FONT> </P>






<table cellpadding=0 cellspacing=0 border=0 width=740 align="center">



  <tr valign=bottom>
    <td align=LEFT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=center colspan="3"><b><font size=1>Three Months Ended</font>
</b>
      <hr width=97% size=1 color=BLACK noshade>
    </td>
    <td align=center>&nbsp;</td>
    <td align=center><b><font size=1>Period from <br>
December 27,<br>
      1993* <br>
through </font></b></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=top>
    <td align=LEFT height="32">&nbsp;</td>
    <td align=LEFT height="32">&nbsp;</td>
    <td align=center height="32"><b><font size=1>March 31, 2007 </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=center height="32"><b></b></td>
    <td align=center height="32"><b><font size=1>March 31, 2006 </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=center height="32"><b></b></td>
    <td align=center height="32"><b><font size=1>March 31, 2007 </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=LEFT height="32">&nbsp;</td>
  </tr>


  <tr valign=bottom>
    <td align=LEFT><b><font size=2>REVENUES</font></b><font size=2></font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;830</font></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>COST OF REVENUES</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>206</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>GROSS PROFIT</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>624</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td colspan=2></td>
    <td colspan=2></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>RESEARCH AND DEVELOPMENT EXPENSES (1)</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,532</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,236</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,193</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;less - grants</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>(738</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=RIGHT><font size=2>(373</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=RIGHT><font size=2>(5,854</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,794</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>863</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>14,339</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>GENERAL AND ADMINISTRATIVE EXPENSES (2)</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,987</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>774</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>10,983</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>OPERATING LOSS</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>3,781</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,637</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>24,698</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>FINANCIAL INCOME - NET</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>(331</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=RIGHT><font size=2>(41</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=RIGHT><font size=2>(699</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>NET LOSS BEFORE CHANGE IN</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;ACCOUNTING PRINCIPLE</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>3,450</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,596</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>23,999</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>CUMULATIVE EFFECT OF</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>


  <tr valign="bottom">
    <td colspan=2><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;CHANGE IN ACCOUNTING<br>
      &nbsp;&nbsp;&nbsp;&nbsp;PRINCIPLE</font></b></td>
    <td align=RIGHT>&nbsp;</td>
    <td></td>
    <td align=RIGHT><font size=2>(37</font></td>
    <td><font size=2>)</font></td>
    <td align=RIGHT><font size=2>(37</font></td>
    <td><font size=2>)</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr width=95% size=1 color=BLACK noshade align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>NET LOSS FOR THE PERIOD</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,450</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,559</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,962</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2><b></b></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="85%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 width="95%" align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>NET LOSS PER SHARE OF COMMON STOCK - BASIC <br>
      &nbsp;&nbsp;&nbsp;
       AND DILUTED:</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Prior to cumulative effect of change in accounting</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;principle</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.05</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.08</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Cumulative effect of change in accounting principle</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT><font size=2>**</font></td>
    <td align=LEFT><font size=2></font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>&nbsp;

    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.05</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.08</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="85%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>&nbsp;

    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><b><font size=2>WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK <br>
      &nbsp;&nbsp;&nbsp;

      USED IN COMPUTING LOSS PER COMMON STOCK:</font></b></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>

  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>64,365,376</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>18,801,527</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 align="right" width="85%">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>&nbsp;

    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes share-based compensation</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>206</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>143</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>2,003</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
  </tr>
  <tr valign=bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;(2) Includes share-based compensation</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>1,245</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>527</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT><font size=2>5,384</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign="bottom">

    <td colspan=2></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1 width="85%" align="right">
    </td>
    <td></td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Cutoff rule Footnote" FSL="Workstation" -->
<HR SIZE=1 noshade ALIGN=left  WIDTH=75>

<!-- MARKER FORMAT-SHEET="Footnote Right" FSL="Workstation" -->
<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=right VALIGN=top><FONT SIZE="1">* </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Incorporation
date, see Note 1a.</FONT></TD></TR></TABLE>

<!-- MARKER FORMAT-SHEET="Footnote Right" FSL="Workstation" -->
<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=right VALIGN=top><FONT SIZE="1">** </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Represents
an amount less than $0.01.</FONT></TD></TR></TABLE>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The accompanying notes
are an integral part of the condensed consolidated financial statements. </B></FONT></P>


<!-- MARKER FORMAT-SHEET="Page Break CENTER" FSL="Workstation" -->
<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
2</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 5; page: 5" -->



<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PROTALIX
BIOTHERAPEUTICS, INC. <BR> </B>(A development stage
company) <B><BR> CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS&#146; EQUITY <BR> </B>(U.S. dollars in thousands,
except share data) </FONT> </P>










<table cellpadding=0 cellspacing=0 border=0 align="center" width=100%>
  <tr valign=Bottom>

    <th><font size=1></font></th>
    <th colspan=2><font size=1>Common <br>
Stock <br>
(2) </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Convertible <br>
Preferred <br>
Shares </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Common <br>
Stock </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Convertible <br>
Preferred <br>
Shares </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Warrants </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Additional <br>
paid-in <br>
capital </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>Deficit <br>
accumulated <br>
during <br>
development <br>
stage </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=2><font size=1>Total </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT>&nbsp;</td>
    <td align=center colspan="3"><b><font size=1>Number of shares </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=center><b></b></td>
    <td align=center>&nbsp;</td>
    <td align=center colspan="17"><b><font size=1>Amount</font>
      </b>
      <hr width=100% size=1 color=BLACK noshade>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT height="29"><font size="1"><b>Balance at December 27, 1993 (1) <br>
      Changes during the period from <br>
       &nbsp;&nbsp;&nbsp;
       December 27, 1993 through <br>
      &nbsp;&nbsp;&nbsp;

       December 31, 2006:</b></font></td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
    <td align=LEFT height="29">&nbsp;</td>
    <td align=RIGHT height="29">&nbsp;</td>
    <td align=LEFT height="29"><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Common Stock and convertible preferred A, <br>
      &nbsp;&nbsp;&nbsp;

       B and C shares and warrants issued for <br>
      &nbsp;&nbsp;&nbsp;

       cash (net of issuance costs of $768)</font></td>
    <td align=RIGHT><font size="1">28,856,127</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">398,227</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">29</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">1</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=right valign="bottom"><font size="1">1,382</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">&nbsp;28,156</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">&nbsp;29,568</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Exercise of options granted to employees and <br>
      &nbsp;&nbsp;&nbsp;&nbsp;non-employees</font></td>
    <td align=RIGHT><font size="1">2,670,403</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">847</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">3</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">394</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">397</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Conversion of convertible preferred shares into <br>
      &nbsp;&nbsp;&nbsp;&nbsp;Common Stock</font></td>
    <td align=RIGHT><font size="1">24,375,870</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">(399,074</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">24</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(1</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(23</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Change in accounting principle</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(37</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">&nbsp;37</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Expiration of warrants</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><font size="1">(34</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">34</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Merger with a wholly owned subsidiary of the Company  <br>
      &nbsp;&nbsp;&nbsp;

       (net of issuance cost of $642)</font></td>
    <td align=RIGHT><font size="1">583,086</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">1</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">240</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">241</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Exercise of warrants</font></td>
    <td align=RIGHT><font size="1">5,296,279</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">5</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><font size="1">(993</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">9,658</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">8,670</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size="1">Share-based compensation</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">5,957</font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">5,957</font></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Net loss for the period</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(20,549</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(20,549</font></td>
    <td align=LEFT><font size="1">)</font></td>
  </tr>
  <tr>

    <td><font size="1"></font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size="1">Balance at December 31, 2006</font></b></td>
    <td align=RIGHT><b><font size="1">61,781,765</font></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=RIGHT><b></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><b><font size="1">62</font></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><b></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><b><font size="1">355</font></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><b><font size="1">44,379</font></b></td>
    <td align=LEFT><b><font size="1">&nbsp;</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><b><font size="1">(20,512</font></b></td>
    <td align=LEFT><b><font size="1">)</font></b></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><b><font size="1">24,284</font></b></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size="1">Changes during the three month period ended <br>
      &nbsp;&nbsp;&nbsp;&nbsp;March 31, 2007 (Unaudited):</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">1,451</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">1,451</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;Exercise of warrants</font></td>
    <td align=RIGHT><font size="1">3,875,416</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">4</font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><font size="1">(355</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">5,684</font></td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">5,333</font></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1">Net loss for the period</font></td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(3,450</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">(3,450</font></td>
    <td align=LEFT><font size="1">)</font></td>
  </tr>
  <tr>

    <td><font size="1"></font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td><font size="1"></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size="1"><b>Balance at March 31, 2007</b> (Unaudited)</font></td>
    <td align=RIGHT><font size="1">65,657,181</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">66</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=RIGHT><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom">&nbsp;</td>
    <td align=right valign="bottom"><font size="1">&#151;</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">&nbsp;51,514</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">(23,962</font></td>
    <td align=LEFT><font size="1">)</font></td>
    <td align=right valign="bottom"><font size="1">$</font></td>
    <td align=RIGHT><font size="1">&nbsp;27,618</font></td>
    <td align=LEFT><font size="1">&nbsp;</font></td>
  </tr>
  <tr>

    <td><font size="1"></font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1">&nbsp;&nbsp;</font></td>
    <td align=RIGHT>
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1">&nbsp;&nbsp;</font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1">&nbsp;&nbsp;</font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1"></font></td>
    <td align="right" valign="bottom" colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td><font size="1"></font></td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Cutoff rule Footnote" FSL="Workstation" -->
<HR SIZE=1 noshade ALIGN=left  WIDTH=75>


<!-- MARKER FORMAT-SHEET="Footnote Right" FSL="Workstation" -->
<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=right VALIGN=top><FONT SIZE="1">(1) </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Incorporation
date, see Note 1a.</FONT></TD></TR></TABLE>

<!-- MARKER FORMAT-SHEET="Footnote Right" FSL="Workstation" -->
<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=right VALIGN=top><FONT SIZE="1">(2) </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Common
Stock, $0.001 par value; Authorized - as of December 31, 2006 and March 31, 2007 -
150,000,000 shares.</FONT></TD></TR></TABLE>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The accompanying
notes are an integral part of the condensed consolidated financial statements. </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Page Break CENTER" FSL="Workstation" -->
<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
3</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 6; page: 6" -->




<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>PROTALIX
BIOTHERAPEUTICS, INC.  <br>
                                             </b>(A development stage
company) <b><br>
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS <br>
                                               </b>(U.S. dollars in thousands) <br>
                                                    (Unaudited) </font></p>









<table cellpadding=0 cellspacing=0 border=0 align="center" width=740>
  <tr valign=Bottom>

    <th><font size=1></font></th>
    <th colspan=6><font size=1></font><font size=1>Three Months Ended </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=2 rowspan="2"><font size=1>Period from <br>
December 27, <br>
      1993* <br>
through <br>
March 31, 2007 </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th rowspan="2">&nbsp;</th>
  </tr>
  <tr valign=Bottom>

    <th><font size=1></font></th>
    <th colspan=3><font size=1>March 31, <br>
      2007 </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
    <th colspan=3><font size=1>March 31, <br>
      2006 </font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>CASH FLOWS FROM OPERATING ACTIVITIES:</b></font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Net loss for the period</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(3,450</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(1,559</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(23,962</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Adjustments required to reconcile net loss to net</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;cash used in operating activities:</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size=2>Cumulative effect of change in accounting principle</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(37</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(37</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Share based compensation</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>1,451</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>670</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>7,387</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Depreciation and impairment of fixed assets</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>132</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>98</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>1,312</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Changes in accrued liability for employee rights</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;upon retirement</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>74</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>36</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>510</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Loss (gain) on amounts funded in respect of</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;employee rights upon retirement</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(5</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>11</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(52</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Changes in operating assets and liabilities:</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Increase in accounts receivable</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(908</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(383</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(2,193</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Increase (decrease) in accounts payable and accruals</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(113</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>27</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>1,991</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Net cash used in operating activities</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(2,819</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(1,137</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(15,044</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>CASH FLOWS FROM INVESTING ACTIVITIES:</b></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Purchase of property and equipment</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;(516</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;&nbsp;(183</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(4,003</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size=2>Investment grant received in respect of fixed assets</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>38</font></td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Proceeds from sale of property and equipment</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>4</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>4</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>

  <tr valign=Bottom>
    <td align=LEFT><font size=2>Investment in restricted cash deposit</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(47</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>

  <tr valign=Bottom>

    <td align=LEFT><font size=2>Amounts funded in respect of employee rights upon<br>
      &nbsp;&nbsp;&nbsp;retirement</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(30</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(24</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(433</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Amounts paid in respect of employee rights upon</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;retirement</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>8</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>&#151;</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>165</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Net cash used in investing activities</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;(534</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;(207</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>(4,276</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2><b>CASH FLOWS FROM FINANCING ACTIVITIES:</b></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Loan and convertible bridge loan received</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>2,145</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Repayment of loan</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(1,000</font></td>
    <td align=LEFT><font size=2>)</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Issuance of shares and warrants, net of issuance</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;cost</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(10</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>28,369</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Exercise of options and warrants</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;12,910</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>6</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>14,400</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Merger with a wholly owned subsidiary of the</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;Company, net of issuance cost</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(39</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>302</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Net cash provided by (used in) financing activities</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;12,871</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>&nbsp;(4</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>44,216</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>NET INCREASE (DECREASE) IN CASH AND <br>
      &nbsp;&nbsp;&nbsp;CASH EQUIVALENTS</font></b></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>9,518</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>(1,348</font></td>
    <td align=LEFT><font size=2>)</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>24,896</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>BALANCE OF CASH AND CASH EQUIVALENTS </font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;AT BEGINNING OF PERIOD</font></b></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>15,378</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>4,741</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2> </font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td><b></b></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>BALANCE OF CASH AND CASH EQUIVALENTS </font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;AT END OF PERIOD</font></b></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>24,896</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>3,393</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>24,896</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
  </tr>
  <tr>

    <td><b></b></td>
    <td align=RIGHT colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td></td>
    <td align=RIGHT colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td></td>
    <td align=RIGHT colspan="2">
      <hr noshade color=#000000 size=2>
    </td>
    <td></td>
  </tr>
</table>
<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The accompanying
notes are an integral part of the condensed consolidated financial statements. </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Page Break CENTER" FSL="Workstation" -->
<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
4</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





<!-- *************************************************************************** -->
<!-- MARKER PAGE="sheet: 1; page: 1" -->




<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>PROTALIX
BIOTHERAPEUTICS, INC.   <br>
                                            </b>(A development stage
company) <b><br>
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS <br>
                                               </b>(U.S. dollars in thousands) <br>
                                                    (Unaudited) </font></p>

<!-- MARKER FORMAT-SHEET="Para Flush 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Concluded) - 2 </FONT></P>

<table cellpadding=0 cellspacing=0 border=0 align="center" width=600>
  <tr valign=Bottom>

    <th><font size=1></font></th>
    <th colspan=5><font size=1></font><font size=1>Three Months Ended </font>
      <hr width=97% size=1 color=BLACK noshade>
    </th>
    <th>&nbsp;</th>
    <th colspan=2><font size=1><b>Period from <br>
December 27, <br>
1993* </b></font>
    </th>
  </tr>

  <tr valign=top>
    <td align=LEFT>&nbsp;</td>
    <td align=center colspan="2"><b><font size=1>March 31, <br>
      2007 </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=LEFT>&nbsp;</td>
    <td align=center colspan="2"><b><font size=1>March 31, <br>
      2006 </font>
      </b>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
    <td align=LEFT>&nbsp;</td>
    <td align=center colspan="2"><font size=1><b>through <br>
March 31, 2007 </b></font>
      <hr width=95% size=1 color=BLACK noshade>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>SUPPLEMENTARY DISCLOSURE OF</font></b></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=RIGHT>&nbsp;</td>
    <td align=RIGHT><font size=2></font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CASH FLOW INFORMATION:</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for interest</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>**</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>80</font></td>
  </tr>
  <tr>

    <td></td>
    <td colspan=3 align="left"></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>SUPPLEMENTARY INFORMATION ON</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTING AND FINANCING</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ACTIVITIES NOT INVOLVING</font></b></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CASH FLOWS</font></b></td>
  </tr>
  <tr valign=Bottom>
    <td align=LEFT>&nbsp;</td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Conversion of convertible bridge loan into</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>1,145</font></td>
  </tr>
  <tr>

    <td></td>
    <td colspan=3 align="left"></td>
    <td colspan=3 align="left"></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Purchase of property and equipment</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>249</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font>&nbsp;</td>
    <td align=RIGHT><font size=2>164</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>249</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Issuance cost not yet paid</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>5</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>5</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>5</font></td>
  </tr>
  <tr>

    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
    <td></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Consultants&#146; and director credit balance</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;converted into shares</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>80</font></td>
  </tr>
  <tr>

    <td></td>
    <td colspan=3 align="left"></td>
    <td colspan=3 align="left"></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Issuance cost paid by a grant of options</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>21</font></td>
  </tr>
  <tr>

    <td></td>
    <td colspan=3 align="left"></td>
    <td colspan=3 align="left"></td>
    <td align=left colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Merger with a wholly owned subsidiary of</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company:</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT>&nbsp;</td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT><font size=2>4</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance cost setoff against accounts</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payable</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>65</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;</td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=left><font size=2>$</font></td>
    <td align=RIGHT><font size=2>65</font></td>
  </tr>
  <tr>

    <td></td>
    <td colspan=3>
      <hr noshade color=#000000 size=1>
    </td>
    <td align=left>&nbsp;</td>
    <td align=RIGHT>&nbsp;

    </td>
    <td></td>
    <td align=RIGHT colspan="2">
      <hr noshade color=#000000 size=1>
    </td>
  </tr>
</table>


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<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=left VALIGN=top><FONT SIZE="1">* </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Incorporation
date, see Note 1a.</FONT></TD></TR></TABLE>

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<TABLE WIDTH=100%><TR><TD WIDTH=4% ALIGN=left VALIGN=top><FONT SIZE="1">** </FONT></TD><TD WIDTH=2%><FONT SIZE="1"></FONT></TD><TD WIDTH=94% ALIGN=left VALIGN=top><FONT SIZE="1">Represents
an amount less than $1.</FONT></TD></TR></TABLE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The accompanying
notes are an integral part of the condensed consolidated financial statements. </B></FONT></P>



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<BR>&nbsp;
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5</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>






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<p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>PROTALIX
BIOTHERAPEUTICS, INC.   <br>
                                            </b>(A development stage
company) <b><br>
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
                                            </b>(U.S. dollars in thousands) <br>
                                                    (Unaudited) </font></p>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 - SIGNIFICANT
ACCOUNTING POLICIES </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>a.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>General</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Protalix
BioTherapeutics, Inc. (formerly Orthodontix, Inc.) (hereinafter, the &#147;Company&#148;)
is                 engaged through its wholly owned subsidiary, Protalix Ltd. in the
biotechnology field.  In recent                 years, Protalix Ltd. has been engaged in
the research and development of plant-derived human                 proteins, with its
main product under development, prGCD, being a plant-derived protein being
                developed as a treatment for Gaucher Disease.  The Company has completed
a Phase I clinical trial                 on prGCD, has received an approval to initiate
phase III study in April 2007, and expects to                 initiate it in mid 2007.
 The Company&#146;s business is located in Carmiel, Israel. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On
December 31, 2006, the Company consummated the acquisition of Protalix Ltd., a
privately-held                 Israeli biotechnology company incorporated on December 27,
1993, by the merger (the &#147;Merger&#148;) of                 its wholly owned
subsidiary, Protalix Acquisition Co., Ltd., with Protalix Ltd.  As a result,
                Protalix Ltd. is now the Company&#146;s wholly-owned subsidiary, with the
former shareholders of                 Protalix Ltd. acquiring in excess of 99% of the
Company&#146;s outstanding shares of common stock, par                 value $0.001 per
share (the &#147;Common Stock&#148;).  For accounting purposes, the Merger was accounted
                for as a recapitalization of Protalix Ltd.  Accordingly, the historical
financial statements of                 the Company reflect the historical operations and
financial statements of Protalix Ltd. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has been in the development stage since inception.                 The successful
completion of the Company&#146;s development program                 and its transition
to commercial operations, if at all, is                 dependent upon obtaining
necessary regulatory approvals from the                 United States Food and Drug
Administration (&#147;FDA&#148;) prior to                 selling its products within the
United States, and foreign                 regulatory approvals must be obtained to sell
its products                 internationally. There can be no assurance that the Company&#146;s
                products will receive regulatory approvals, and a substantial
                amount of time may pass before the Company achieves a level of
                sales adequate to support the Company operations, if at all. The
                Company will also incur substantial expenditures in connection
                with the regulatory approval process and it will need to raise
                additional capital during the developmental period. Obtaining
                marketing approval will be directly dependent on the Company&#146;s
                ability to implement the necessary regulatory steps required to
                obtain marketing approval in the United States and other
                countries and the success of the Company&#146;s clinical trials. The
                Company cannot predict the outcome of these activities. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company currently does not have sufficient resources to                 complete the
commercialization of any of its proposed products.                 Based on its current
cash resources and commitments, the Company                 believes it should be able to
maintain its current planned                 development activities and the corresponding
level of                 expenditures for at least the next 18 months, although no
                assurance can be given that it will not need additional cash
                prior to such time. Unexpected increases in general and
                administrative expenses and research and development expenses
                may cause the Company to need additional financing during the
                next 18 months. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>b.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Share
Based Compensation</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company&#146;s management evaluated the fair value of its Common                 Stock
for the purposes of determining the fair value of the                 options granted to
consultants and non-employees, based on a                 retrospective valuation of the
fair value of the Common Stock at                 March 31, 2007, conducted by a
third-party specialist. The                 valuation specialist used various valuation
methodologies and                 determined retrospectively that the fair value of the
shares of                 Common Stock underlying the options granted to consultants and
                non-employees at March 31, 2007 was $6.19 per share. </FONT></TD>
</TR>
</TABLE>
<BR>



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6</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>PROTALIX
BIOTHERAPEUTICS, INC.   <br>
                                            </b>(A development stage
company) <b><br>
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
                                            </b>(U.S. dollars in thousands) <br>
                                                    (Unaudited) </font></p>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 - SIGNIFICANT
ACCOUNTING POLICIES</B> (continued) </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>c.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>General
Basis of Presentation</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
accompanying unaudited condensed consolidated financial                 statements of the
Company have been prepared in accordance with                 generally accepted
accounting principles in the United States                 (&#147;GAAP&#148;) for interim
financial information, Statement of                 Financial Accounting Standards (&#147;SFAS&#148;)
No. 7, &#147;Accounting and                 Reporting by Development Stage Enterprises&#148;,
and Article 10 of                 Regulation S-X under the Securities Exchange Act of
1934.                 Accordingly, they do not include all of the information and
                notes required by GAAP for complete financial statements. In the
                opinion of management, all adjustments (of a normal recurring
                nature) considered necessary for a fair statement of the results
                for the interim periods presented have been included. Operating
                results for the interim period are not necessarily indicative of
                the results that may be expected for the full year. These
                unaudited condensed consolidated financial statements should be
                read in conjunction with the audited consolidated financial
                statements in the Annual Report on Form 10-K for the year ended
                December 31, 2006, filed by the Company with the Securities and
                Exchange Commission. The comparative balance sheet at December 31, 2006 has been derived from the audited
                financial statements at that date, but does not include all of the information and notes
                required under GAAP for complete financial statements. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>d.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Net
Loss per share (&#147;LPS&#148;)</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Basic
and diluted LPS are computed (in accordance with SFAS No.                 128 &#147;Earnings
per Share&#148;) by dividing net loss by the weighted                 average number of
shares of Common Stock outstanding for each                 period. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Convertible
preferred shares, options, and warrants were not                 included in the
computation of diluted LPS because the effect                 would be anti-dilutive. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
total weighted average (on a pre-exchange basis) number of                 shares of
Common Stock related to the convertible preferred                 shares has been
excluded from the calculations of diluted loss                 per share were 398,235 and
0 for the three months ended March                 31, 2006 and 2007, respectively. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
diluted loss per share also does not include options and                 warrants of the
Company in the amount of 15,026,538 and                 13,008,658 for the three months
ended March 31, 2006 and 2007,                 respectively. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>e.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Newly
issued and recently adopted Accounting Pronouncements</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                1)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In
June 2006, the FASB issued FASB Interpretation (&#147;FIN&#148;)
                      No. 48, &#147;Accounting for Uncertainty in Income Taxes&#148; (&#147;FIN
                      48&#148;), an interpretation of SFAS 109, &#147;Accounting For
                      Income Taxes.&#148; FIN 48 prescribes a comprehensive model for
                      recognizing, measuring, presenting, and disclosing in the
                      financial statements tax positions taken or expected to be
                      taken on a tax return, including a decision whether to
                      file or not to file in a particular jurisdiction. FIN 48
                      is effective for fiscal years beginning after December 15,
                      2006 (January 1, 2007 for the Company). The Company
                      adopted FIN 48 on January 1, 2007. The adoption did not
                      have any impact on the Company&#146;s financial statements. </FONT></TD>
</TR>
</TABLE>
<BR>


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7</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>








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<p align=CENTER><font face="Times New Roman, Times, Serif" size=2><b>PROTALIX
BIOTHERAPEUTICS, INC.   <br>
                                            </b>(A development stage
company) <b><br>
                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
                                            </b>(U.S. dollars in thousands) <br>
                                                    (Unaudited) </font></p>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 1 - SIGNIFICANT
ACCOUNTING POLICIES (continued) </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                2)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In
September 2006, the FASB issued SFAS No. 157, &#147;Fair                       Value
Measurements&#148; (&#147;SFAS 157&#148;). SFAS 157 defines fair
                      value, establishes a framework for measuring fair value in
                      accordance with GAAP, and expands disclosures about fair
                      value measurements. The provisions of SFAS 157 are
                      effective for the fiscal year beginning after September 1,
                      2008. The Company is currently evaluating the impact of
                      the provisions of SFAS 157 on its financial position and
                      results of operations. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                3)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On
February 15, 2007, the FASB issued SFAS No. 159, &#147;The                       Fair
Value Option for Financial Assets and Financial                       Liabilities&#148; (&#147;SFAS
159&#148;). Under SFAS 159, the Company may                       elect to report
financial instruments and certain other                       items at fair value on a
contract-by-contract basis with                       changes in value reported in
earnings. This election is                       irrevocable. SFAS 159 provides an
opportunity to mitigate                       volatility in reported earnings that is
caused by                       measuring hedged assets and liabilities that were
                      previously required to use a different accounting method
                      than the related hedging contracts when the complex
                      provisions of SFAS 133 hedge accounting are not met. SFAS
                      159 is effective for years beginning after November 15,
                      2007. The Company is currently evaluating the impact of
                      adopting SFAS 159 on its financial position, cash flows,
                      and results of operations. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NOTE 2 - STOCK
TRANSACTIONS </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>a.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At
the closing of the Merger and in accordance with a share purchase agreement entered into
in                 August  2006, the Company issued to Phillip Frost, M.D., and Jane H.
Hsiao, Ph.D., directors of                 the Company, and to one other investor that
provides consulting services to the Company, options                 that are exercisable
into 2.5%, 0.5%, and 0.5%, respectively, of the Company&#146;s issued and
                outstanding Common Stock on a fully-diluted basis immediately after the
closing of the Merger in                 consideration for services provided to the
Company, including the services provided by each of                 Dr. Frost and Dr.
Hsiao as directors.  The options originally vested ratably over a period of 2.5
                years, 20% for each six month period while the options are outstanding,
commencing upon and                 subject to certain events (as to changes of the
vesting terms see below).  The options are                 exercisable for a ten-year
period commencing upon the date of grant.  The exercise price of each
                option is $16.70.  The options granted to the directors are accounted for
as options granted to                 employees and the options granted to the other
investor are accounted for as options granted to                 consultants. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
February 2007, the Company&#146;s board of directors approved                 certain
modifications to the vesting periods of such options.                 The options vest as
follows: 40% of the options shall vest on                 March 1, 2008, and an
additional 15% of the options shall vest                 in four equal installments on
each of the following dates: June                 30, 2008, December 31, 2008, June 30,
2009, and September 30,                 2009. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Modification
of the terms of an award is treated as an exchange                 of the original award
for a new award, resulting in the                 incurrence of additional compensation
cost for that incremental                 value. The incremental value is measured by the
difference                 between (a) the fair value of the modified option and (b) the
                value of the old option immediately before its terms are
                modified. The modification had no effect on the accounting
                records of the Company. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>b.</B> </FONT> </TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On
January 31, 2007, certain warrant holders exercised, in the                 aggregate,
warrants for 3,875,416 shares of Common Stock with an                 aggregate exercise
price of $5,333. Such warrants were issued in                 connection with the share
purchase agreement entered into in                 August 2006 by such warrant holders. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 2. Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>You
should read the following discussion and analysis of our financial condition and results
of operations together with our condensed financial statements and the consolidated
financial statements and the related notes included elsewhere in this Form 10-Q and our
Annual Report on Form 10-K for the year ended December 31, 2006. Some of the information
contained in this discussion and analysis, particularly with respect to our plans and
strategy for our business and related financing, includes forward-looking statements that
involve risks and uncertainties. You should read &#147;Risk Factors&#148; in our Annual
Report on Form 10-K for the year ended December 31, 2006 for a discussion of important
factors that could cause actual results to differ materially from the results described
in or implied by the forward-looking statements contained in the following discussion and
analysis.</I> </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Overview </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
only business is conducted by our wholly owned subsidiary, Protalix Ltd., which we
acquired through a reverse merger transaction effective December 31, 2006. The accounting
treatment for the merger transaction was a recapitalization and as such the results of
operations discussed below are those of Protalix Ltd. Prior to the merger transaction, we
had not conducted any operations for several years. Protalix Ltd. was originally
incorporated in Israel in December 1993. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a clinical stage biopharmaceutical company currently in the development stage that is
focused on developing and producing recombinant therapeutic proteins that are expressed
through our proprietary plant cell system. Recombinant therapeutic proteins are proteins
that are produced by different genetically modified organisms following the insertion of
the relevant DNA into their genome and are the basis of most biopharmaceutical drugs
currently under development. We are leveraging our plant cell culture and bioreactor
technology for the production of recombinant therapeutic proteins, and we are currently
developing several such biotherapeutic products. Our patented plant cell system enables
the expression in plant cells of specific human genes, most often genes coding for
proteins of pharmaceutical or therapeutic value. Once the plant cells produce a
therapeutic protein, such protein may be grown on an industrial scale in our proprietary
bioreactor system. Subsequently, the protein is extracted from the cells and purified to
a clinical grade. Our system presents a proprietary method for the production of
recombinant proteins that we believe is safe and scalable and may allow for the
cost-effective industrial scale production of such recombinant human therapeutic proteins. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
lead product candidate, prGCD, is a proprietary plant cell expressed recombinant
Glucocerebrosidase enzyme-based protein for the treatment of Gaucher Disease. In July
2005, we received FDA approval of our Investigational New Drug application, or IND, for
prGCD, allowing us to initiate an FDA-approved clinical development program for prGCD.
The Phase I clinical trial was completed in June 2006 and in April 2007 we received
written notice from the FDA that we may initiate a Phase III clinical trial in the United
States. We expect to commence the Phase III clinical trial mid-2007. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that we have demonstrated the potential of our plant cell manufacturing platform
to become a safe and efficacious expression technology for the manufacturing of a wide
variety of biopharmaceutical products.  Accordingly, we are employing a two-pronged
business strategy that enables us to pursue our goal of becoming a fully integrated
biopharmaceutical company. In addition to our development of prGCD, we are using our
protein expression technology to develop an innovative proprietary product pipeline. We
are evaluating and initiating additional internal research programs through collaboration
agreements with academic institutions, such as the Yeda Research and Development Company
Limited, the technology transfer arm of the Weizmann Institute of Science. In addition,
we continually review and consider development and commercialization alliances with
corporate partners in specific and identified markets worldwide for products or
territories in order to enable us to optimize our resources and effectively penetrate
target markets. We entered into such an agreement with Teva Pharmaceutical Industries
Ltd. in September 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
its inception in December 1993, Protalix Ltd. has generated significant losses in
connection with the research and development of its technology, including the clinical
development of prGCD, and at March 31, 2007, we had an accumulated deficit of $24.0
million. Since we do not generate revenue from any of our product candidates, we expect
to continue to generate losses in connection with the continued clinical development of  </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>prGCD and the research and
development activities relating to our technology and other drug candidates. Such
research and development activities are budgeted to expand over time and will require
further resources if we are to be successful. As a result, we believe that our operating
losses are likely to be substantial over the next several years. We will need to obtain
additional funds to further develop our research and development programs. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Critical Accounting
Policies </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
significant accounting policies are described in Note 1 to our condensed consolidated
financial statements appearing at the beginning of this Form 10-Q. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Results of Operations </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Three months ended
March 31, 2007 compared to the three months ended March 31, 2006 </I></B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Research and Development Expenses</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research
and development expenses were $2.5 million for the three months ended March 31, 2007, an
increase of $1.3 million, or 104%, from $1.2 million for the three months ended March 31,
2006. The increase resulted primarily from the increase of $1 million in salaries and
related consulting and materials associated with research and development. This increase
was partially offset by $365,000 from grants from the Office of the Chief Scientist, the
OCS, equal to $738,000 during the three months ended March 31, 2007, compared to grants
equal to $373,000 during the three months ended March 31, 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect research and development expenses to continue to increase as we enter into a more
advanced stage of clinical trials for our product candidates, especially with respect to
the Phase III trial of prGCD. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>General and Administrative Expenses</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General
and administrative expenses were $2.0 million for the three months ended March 31, 2007,
an increase of $1.2 million, or approximately 156%, from $774,000 for the three months
ended March 31, 2006. The increase resulted primarily from a $718,000 increase in
share-based compensation in connection with additional stock option awards granted in the
second half of 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Financial Expenses and Income</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
income was $331,000 for the three months ended March 31, 2007, an increase of $290,000,
compared to $41,000 for the three months ended March 31, 2006. The increase resulted
primarily from a higher balance of cash and cash equivalents as of March 31, 2007, which
primarily resulted from the interest income earned on the proceeds generated from the
sale of ordinary shares of Protalix Ltd. in September 2006 and the exercise of warrants
in January 2007. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Liquidity and Capital
Resources </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Sources of Liquidity</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of our significant research and development expenditures and the lack of any
approved products to generate product sales revenue, we have not been profitable and have
generated operating losses since our inception. To date, we have funded our operations
primarily with gross proceeds equal to $31.3 million from the sale of convertible
preferred and ordinary shares of Protalix Ltd., and an additional $14.4 million in
connection with the exercise of warrants issued in connection with the sale of such
ordinary shares. We believe that the funds currently available to us as are sufficient to
satisfy our capital needs for the next 18 months. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Cash Flows</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
cash used in operations was $2.8 million for the three months ended March 31, 2007. The
net loss for the three months ended March 31, 2007 of $3.5 million was partially offset
by $1.5 million of non-cash share-based compensation but was increased due to an increase
in accounts receivable of $1.0 million, mainly due to grants to </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>be received from the OCS. Net cash
used in investing activities for the three months ended March 31, 2007 was $534,000 and
consisted primarily of purchases of property and equipment. Net cash provided by
financing activities for the three months ended March 31, 2007 was $12.9 million,
consisting of the proceeds from the exercise of certain warrants. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
cash used in operations was $1.1 million for the three months ended March 31, 2006. The
net loss for the three months ended March 31, 2006 of $1.6 million was mainly offset by
$670,000 of non-cash share-based compensation and depreciation equal to $98,000. Net cash
used in investing activities for the three months ended March 31, 2006 was $207,000 and
consisted primarily of purchases of property and equipment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Future Funding Requirements</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect to incur losses from operations for the foreseeable future. We expect to incur
increasing research and development expenses, including expenses related to the hiring of
personnel and additional clinical trials. We expect that general and administrative
expenses will also increase as we expand our finance and administrative staff, add
infrastructure, and incur additional costs related to being a public company in the
United States, including the costs of directors&#146; and officers&#146; insurance,
investor relations programs, and increased professional fees. In addition, we are
considering a new manufacturing facility that would meet the FDA requirements for the
manufacture of our product candidates, which would increase our capital expenditures
significantly. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that our existing cash and cash equivalents will be sufficient to enable us to
fund our operating expenses and capital expenditure requirements for at least for the
next 18 months. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will need to finance our future cash needs through public or private equity offerings,
debt financings, or corporate collaboration and licensing arrangements. We currently do
not have any commitments for future external funding. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Effects of Inflation
and Currency Fluctuations </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inflation
generally affects us by increasing our cost of labor and clinical trial costs. We do not
believe that inflation has had a material effect on our results of operations during the
three months ended March 31, 2007 or the three months ended March 31, 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currency
fluctuations could affect us by increased or decreased costs mainly for goods and
services acquired outside of Israel. We do not believe currency fluctuations have had a
material effect on our results of operations during the three months ended March 31, 2007
and the three months ended March 31, 2006. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Off-Balance Sheet
Arrangements </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have no off-balance sheet arrangements as of March 31, 2007 and March 31, 2006. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Recently Issued
Accounting Pronouncements </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February 15, 2007, the FASB issued SFAS No. 159, &#147;The Fair Value Option for
Financial Assets and Financial Liabilities&#148; (&#147;SFAS 159&#148;). Under SFAS 159,
we may elect to report financial instruments and certain other items at fair value on a
contract-by-contract basis with changes in value reported in earnings. This election is
irrevocable. SFAS 159 provides an opportunity to mitigate volatility in reported earnings
that is caused by measuring hedged assets and liabilities that were previously required
to use a different accounting method than the related hedging contracts when the complex
provisions of SFAS 133 hedge accounting are not met. SFAS 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption within 120 days of the beginning
of our 2007 fiscal year is permissible, provided a company has not yet issued interim
financial statements for 2007 and has adopted SFAS 157. We do not intend to adopt SFAS
157 early, and we are currently evaluating the impact of adopting SFAS 159 on our
financial position, cash flows, and results of operations. </FONT></P>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 3.  Quantitative
and Qualitative Disclosures About Market Risk </B></FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Currency Exchange Risk </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
currency of the primary economic environment in which our operations are conducted is the
dollar. We are currently in the development stage with no significant source of revenues;
therefore we consider the currency of the primary economic environment to be the currency
in which we expend cash. Most of our expenses and capital expenditures are incurred in
dollars, and a significant source of our financing has been provided in U.S. dollars.
Since the dollar is our functional currency, monetary items maintained in currencies
other than the dollar are remeasured using the rate of exchange in effect at the balance
sheet dates and non-monetary items are remeasured at historical exchange rates. Revenue
and expense items are remeasured at the average rate of exchange in effect during the
period in which they occur. Foreign currency translation gains or losses are recognized
in the statement of operations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately
50% of our costs, including salaries, expenses and office expenses, are incurred in New
Israeli Shekels, the NIS. Inflation in Israel may have the effect of increasing the U.S.
dollar cost of our operations in Israel. If the U.S. dollar declines in value in relation
to the NIS, it will become more expensive for us to fund our operations in Israel. A
revaluation of 1% of the NIS will affect our income before tax by less than 1%. The
exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the
Bank of Israel, was as follows: </FONT></P>





<table cellpadding=0 cellspacing=0 border=0 width=500 align="center">
  <tr valign=Bottom>

    <th colspan=2><font size=1></font></th>
    <th colspan=3><font size=1>Year Ended December 31,</font>
      <hr width=95% size=1 color=BLACK noshade>
    </th>
  </tr>
  <tr valign=Bottom>

    <th colspan=2><font size=1></font></th>
    <th><font size=1>2004</font>
      <hr width=88% size=1 color=BLACK noshade>
    </th>
    <th><font size=1>2005</font>
      <hr width=88% size=1 color=BLACK noshade>
    </th>
    <th><font size=1>2006</font>
      <hr width=88% size=1 color=BLACK noshade>
    </th>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Average rate for period</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=center><font size=2>4.4820</font></td>
    <td align=center><font size=2>4.4878</font></td>
    <td align=center><font size=2>4.4565</font></td>
  </tr>
  <tr valign=Bottom>

    <td align=LEFT><font size=2>Rate at year-end</font></td>
    <td align=LEFT><font size=2>&nbsp;</font></td>
    <td align=center><font size=2>4.3080</font></td>
    <td align=center><font size=2>4.6030</font></td>
    <td align=center><font size=2>4.2250</font></td>
  </tr>
</table>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
date, we have not engaged in hedging transactions. In the future, we may enter into
currency hedging transactions to decrease the risk of financial exposure from
fluctuations in the exchange rate of the U.S. dollar against the NIS. These measures,
however, may not adequately protect us from material adverse effects due to the impact of
inflation in Israel. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Interest Rate Risk </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
exposure to market risk is confined to our cash and cash equivalents. We consider all
short term, highly liquid investments, which include short-term deposits with original
maturities of three months or less from the date of purchase, that are not restricted as
to withdrawal or use and are readily convertible to known amounts of cash, to be cash
equivalents. The primary objective of our investment activities is to preserve principal
while maximizing the interest income we receive from our investments, without increasing
risk. We invest any cash balances primarily in bank deposits and investment grade
interest-bearing instruments. We are exposed to market risks resulting from changes in
interest rates. We do not use derivative financial instruments to limit exposure to
interest rate risk. Our interest gains may decline in the future as a result of changes
in the financial markets. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 4.  Controls and
Procedures </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Evaluation of
Disclosure Controls and Procedures </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
maintain disclosure controls and procedures or controls and other procedures that are
designed to ensure that the information required to be disclosed by us in the reports
that we file or submit under the Securities Exchange Act of 1934, or Exchange Act, is
recorded, processed, summarized and reported, within the time periods specified in the
rules and forms of the Securities and Exchange Commission. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in the reports that a company files or submits under
the Exchange Act is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure. </FONT></P>


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<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
carried out an evaluation, under the supervision and with the participation of our Chief
Executive and Chief Financial Officers, of the effectiveness of the design and operation
of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act) as of March 31, 2007. Based on this evaluation, our Chief
Executive Officer and our Chief Financial Officer concluded that as of March 31, 2007,
our disclosure controls and procedures were effective at providing reasonable assurance
that the information required to be disclosed by us in reports filed under the Exchange
Act is (i) recorded, processed, summarized and reported within the time periods specified
in the SEC&#146;s rules and forms; and (ii) accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding disclosure. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Changes in Internal
Controls over Financial Reporting </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the first quarter of fiscal 2007, there were no changes in our internal control over
financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(f) under the Exchange
Act) that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PART II - OTHER
INFORMATION </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 1.  Legal
Proceedings </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are not involved in any material legal proceedings. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 1A.  Risk Factors </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
have been no material changes from the risk factors previously disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2006. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 2.  Unregistered
Sales of Equity Securities and Use of Proceeds </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
have been no unregistered sales of equity securities during the quarter ended March 31,
2007 other than those disclosed in our Current Report on Form 8-K dated as of January 31,
2007. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 3.  Defaults Upon
Senior Securities </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 4. Submission of
Matters to a Vote of Security Holders </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 5.  Other
Information </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent 00" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head 2 Bold" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 6.  Exhibits </B></FONT></P>

<table border=0 cellspacing=0 cellpadding=0 width=700>

  <tr valign="bottom">

    <td width=89>
        <font face="Times New Roman" size="2"><b>Exhibit
  <br>
      Number</b></font>

      <hr size="1" noshade align="left" width="65%">
      </td>
    <td width=47>&nbsp;</td>
    <td width=244>
        <font face="Times New Roman" size="2"><b><br>
  Exhibit Description</b></font>

      <hr size="1" noshade align="left" width="48%">
              </td>
    <td width=41>&nbsp;</td>
    <td width=279>
        <font face="Times New Roman" size="2"><b><br>
  Method of Filing </b></font>

      <hr size="1" noshade align="left" width="34%">
        </td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.1</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Amended and
  Restated Articles of Incorporation of the Company</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form S-4 filed on March 26, 1998, SEC File No. 333-48677</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.2</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Article of
  Amendment to Articles of Incorporation dated June 9, 2006</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form 8-A filed on March 9, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
</table>






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13</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>









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<table border=0 cellspacing=0 cellpadding=0 width=700>









  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.3</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Article of
  Amendment to Articles of Incorporation dated December 13, 2006</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form 8-A filed on March 9, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.4</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Article of
  Amendment to Articles of Incorporation dated December 26, 2006</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form 8-A filed on March 9, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.5</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Article of
  Amendment to Articles of Incorporation dated February 26, 2007</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form 8-A filed on March 9, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">3.6</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Bylaws of the
  Company, as amended</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Registration Statement on Form S-4 filed on March 26, 1998, SEC File No. 333-48677</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">4.1</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Form of Warrant</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by reference to the Company&#146;s Current Report on Form 8-K filed
  on January 8, 2007, SEC File No. 000-27836</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.11</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Stock Option
  Award Agreement by and between the Registrant and Phillip Frost, dated as of December 31, 2006 </font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.12</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Stock Option
  Award Agreement by and between the Registrant and Jane Hsiao, dated as of December 31, 2006</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.13</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Stock Option
  Award Agreement grant by and between the Registrant and Steven Rubin, dated
  as of December 31, 2006</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.14</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">First Amendment
  to the December 31, 2006 Stock Option Award Agreement by and between the
  Registrant and Phillip Frost, effective as of February 28, 2007</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.15</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">First Amendment
  to the December 31, 2006 Stock Option Award Agreement by and between the
  Registrant and Jane Hsiao, effective as of February 28, 2007</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.16</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">First Amendment
  to the December 31, 2006 Stock Option Award Agreement by and between the
  Registrant and Steven Rubin, effective as of February 28, 2007</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">10.17</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Employment
  Agreement between Protalix Ltd. and Iftah Katz, effective as of February 28, 2007</font>
        &nbsp;
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Incorporated by
  reference to the Company&#146;s Annual Report on Form 10-K filed on March 30, 2007, SEC File No. 001-33357</font>
        &nbsp;
      </td>
  </tr>
</table>


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<BR>&nbsp;
<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
14</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>






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<table border=0 cellspacing=0 cellpadding=0 width=700>













































  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">31.1</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Certification of Chief Executive Officer pursuant to Rule
  13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Filed herewith</font>
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">31.2</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">Certification of Chief Financial Officer pursuant to Rule
  13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002</font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Filed herewith</font>
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">32.1</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
  the Sarbanes-Oxley Act of 2002, Certification of Chief Executive Officer </font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Filed herewith</font>
      </td>
  </tr>
  <tr>
    <td valign=top width=89>&nbsp;</td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>&nbsp;</td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>&nbsp;</td>
  </tr>

  <tr>

    <td valign=top width=89>
        <font face="Times New Roman" size="2">32.2</font>
      </td>
    <td valign=top width=47>&nbsp;</td>
    <td valign=top width=244>
        <font face="Times New Roman" size="2">18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
  the Sarbanes-Oxley Act of 2002, Certification of Chief Financial Officer </font>
      </td>
    <td valign=top width=41>&nbsp;</td>
    <td valign=top width=279>
        <font face="Times New Roman" size="2">Filed herewith</font>
      </td>
  </tr>
</table>



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<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
15</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>





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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SIGNATURES </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized. </FONT></P>

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<table width=100%>
  <tr align="left" valign=top>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=22%><font size=2>&nbsp;</font></td>
    <td width=4%>&nbsp;&nbsp;</td>
    <td width=39% align="left"><font size=2>PROTALIX
BIOTHERAPEUTICS, INC.
                                                                                               <br>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant) </font></td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=22%>&nbsp;</td>
    <td width=4%>&nbsp;</td>
    <td width=39%>&nbsp;</td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%><font size=2>Date:
May 15, 2007</font></td>
    <td width=5%>&nbsp;</td>
    <td width=22%>&nbsp;</td>
    <td width=4%><font size=2>By:</font></td>
    <td width=39%><font size=2>/s/ David Aviezer
                                                                           <br>
      </font>
      <hr size="1" noshade>
      <font size=2>David Aviezer,
Ph.D. <br>
                                                                           President and
Chief Executive Officer <br>
                                                                           (Principal
Executive Officer) </font></td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=22%>&nbsp;</td>
    <td width=4%>&nbsp;</td>
    <td width=39%>&nbsp;</td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%><font size=2>Date:
May 15, 2007</font></td>
    <td width=5%>&nbsp;</td>
    <td width=22%>&nbsp;</td>
    <td width=4%><font size=2>By:</font></td>
    <td width=39%><font size=2>/s/ Yossi Maimon
                                                                           <br>
       </font>
      <hr size="1" noshade>
      <font size=2>Yossi Maimon <br>
        Chief
Financial Officer, Treasurer and Secretary
                                                                            <br>
      (Principal
Financial and Accounting Officer) </font></td>
  </tr>
</table>




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<TABLE WIDTH=100%><TR><TD WIDTH=20% ALIGN=left><FONT SIZE=1>&nbsp;</FONT></TD><TD WIDTH=60% ALIGN=center><FONT SIZE="2">
16</FONT></TD><TD WIDTH=20% ALIGN=right><FONT SIZE="1">&nbsp;</FONT></TD></TR></TABLE><HR SIZE=5 noshade WIDTH=100% ALIGN=LEFT>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>e27320ex31_1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>


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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 31.1 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTIFICATION </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
I,
David Aviezer, certify that: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
have reviewed this quarterly report on Form 10-Q of Protalix BioTherapeutics, Inc.;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to       state a material fact necessary to make the statements made, in light of
      the circumstances under which such statements were made, not misleading       with
respect to the period covered by this report; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, the financial statements, and other financial       information included
in this report, fairly present in all material       respects the financial condition,
results of operations and cash flows of       the registrant as of, and for, the periods
presented in this report; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s other certifying officer and I are responsible for       establishing
and maintaining disclosure controls and procedures (as       defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant       and have: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      a)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such disclosure controls and procedures, or caused such             disclosure controls
and procedures to be designed under our             supervision, to ensure that material
information relating to the             registrant, including its consolidated
subsidiaries, is made known             to us by others within those entities,
particularly during the             period in which this report is being prepared; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      b)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
the effectiveness of the registrant&#146;s disclosure controls             and procedures
and presented in this report our conclusions about             the effectiveness of the
disclosure controls and procedures, as of             the end of the period covered by
this report based on such             evaluation; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      c)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed
in this report any change in the registrant&#146;s internal             control over
financial reporting that occurred during the             registrant&#146;s most recent
fiscal quarter (the registrant&#146;s fourth             fiscal quarter in the case of an
annual report) that has materially             affected, or is reasonably likely to
materially affect, the             registrant&#146;s internal control over financial
reporting; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s other certifying officer and I have disclosed, based on       our most
recent evaluation of internal control over financial reporting,       to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s       board of directors (or
persons performing the equivalent functions): </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
significant deficiencies and material weaknesses in the design or       operation of
internal control             over financial reporting which are reasonably likely to
adversely             affect the registrant&#146;s ability to record, process, summarize
and             report financial information; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      b)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
fraud, whether or not material, that involves management or             other employees
who have a significant role in the registrant&#146;s             internal control over
financial reporting. </FONT></TD>
</TR>
</TABLE>
<BR>


<table width=100%>
  <tr align="left" valign=top>
    <td width=30%><font size=2>Date:
May 15, 2007 </font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
  <tr align="left" valign=top>
    <td width=30%><font size=2>/s/
David Aviezer <br>
       </font>
      <hr size="1" noshade>
      <font size=2>David Aviezer, Ph.D. <br>
       President and Chief Executive Officer </font></td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>

</table>



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</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>e27320ex31_2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>


<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 31.2 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTIFICATION </B></FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
I,
Yossi Maimon, certify that: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
have reviewed this quarterly report on Form 10-Q of Protalix BioTherapeutics, Inc.;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, this report does not contain any untrue statement of a material fact or
omit to       state a material fact necessary to make the statements made, in light of
      the circumstances under which such statements were made, not misleading       with
respect to the period covered by this report; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, the financial statements, and other financial       information included
in this report, fairly present in all material       respects the financial condition,
results of operations and cash flows of       the registrant as of, and for, the periods
presented in this report; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s other certifying officer and I are responsible for       establishing
and maintaining disclosure controls and procedures (as       defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant       and have: </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      a)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such disclosure controls and procedures, or caused such             disclosure controls
and procedures to be designed under our             supervision, to ensure that material
information relating to the             registrant, including its consolidated
subsidiaries, is made known             to us by others within those entities,
particularly during the             period in which this report is being prepared; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      b)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
the effectiveness of the registrant&#146;s disclosure controls             and procedures
and presented in this report our conclusions about             the effectiveness of the
disclosure controls and procedures, as of             the end of the period covered by
this report based on such             evaluation; and </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      c)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed
in this report any change in the registrant&#146;s internal             control over
financial reporting that occurred during the             registrant&#146;s most recent
fiscal quarter (the registrant&#146;s fourth             fiscal quarter in the case of an
annual report) that has materially             affected, or is reasonably likely to
materially affect, the             registrant&#146;s internal control over financial
reporting; and </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 05" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s other certifying officer and I have disclosed, based on       our most
recent evaluation of internal control over financial reporting,       to the registrant&#146;s
auditors and the audit committee of the registrant&#146;s       board of directors (or
persons performing the equivalent functions):  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
significant deficiencies and material weaknesses in the design or       operation of
internal control             over financial reporting which are reasonably likely to
adversely             affect the registrant&#146;s ability to record, process, summarize
and             report financial information; and </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang 10" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>      b)  </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
fraud, whether or not material, that involves management or             other employees
who have a significant role in the registrant&#146;s             internal control over
financial reporting. </FONT></TD>
</TR>
</TABLE>
<BR>


<table width=100%>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2>Date:
May 15,  2007 </font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left">&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2>/s/ Yossi Maimon <br>
       </font>
      <hr size="1" noshade>
      <font size=2>Yossi Maimon <br>
       Chief Financial Officer, Treasurer </font></td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
</table>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>e27320ex32_1.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 32.1 </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PROTALIX
BIOTHERAPEUTICS, INC. </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Center Head 2-Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTIFICATION </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the quarterly
report of Protalix BioTherapeutics, Inc. (the &#147;Company&#148;) on Form 10-Q for the
period ended March 31, 2007 as filed with the Securities and Exchange Commission (the
&#147;Report&#148;), I, David Aviezer, President and Chief Executive Officer of the
Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter
63, Section 1350 of the United States Code, that to the best of my knowledge: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1)
the Report fully complies with the requirements of Section 13(a) or       15(d), as
applicable, of the Securities Exchange Act of 1934; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(2)
the       information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the Company       at
the dates and for the periods indicated. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Certification has not been, and
shall not be deemed, &#147;filed&#148; with the Securities and Exchange Commission. </FONT></P>

<table width=100%>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2>Date:
May 15, 2007 </font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left">&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2>/s/ David Aviezer <br>
       </font>
      <hr size="1" noshade>
      <font size=2>David Aviezer, Ph.D. <br>
      President and Chief Executive Officer </font></td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
</table>


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<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>e27320ex32_2.htm
<DESCRIPTION>CERTIFICATION
<TEXT>
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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 32.2 </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PROTALIX
BIOTHERAPEUTICS, INC. </B></FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTIFICATION </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the quarterly
report of Protalix BioTherapeutics, Inc. (the &#147;Company&#148;) on Form 10-Q for the
period ended March 31, 2007 as filed with the Securities and Exchange Commission (the
&#147;Report&#148;), I, Yossi Maimon, Vice President and Chief Financial Officer of the
Company, hereby certify as of the date hereof, solely for the purposes of Title 18,
Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(1)
the Report fully complies with the requirements of Section 13(a) or       15(d), as
applicable, of the Securities Exchange Act of 1934; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(2)
the       information contained in the Report fairly presents, in all material
      respects, the financial condition and results of operations of the Company       at
the dates and for the periods indicated. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Certification has not been, and
shall not be deemed, &#147;filed&#148; with the Securities and Exchange Commission. </FONT></P>

<table width=100%>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2>Date:
May 15, 2007</font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
    <td width=5%>&nbsp;&nbsp;</td>
    <td width=30%><font size=2>&nbsp;</font></td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left">&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>
  <tr align="center" valign=top>
    <td width=30% align="left"><font size=2> /s/ Yossi Maimon <br>
       </font>
      <hr size="1" noshade>
      <font size=2>Yossi Maimon  <br>
      Vice President and Chief Financial Officer </font></td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
    <td width=5%>&nbsp;</td>
    <td width=30%>&nbsp;</td>
  </tr>

</table>

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