SecProbe.io

October 10, 2012

Via E -mail
Mr. Ori Shilo
Deputy Chief Executive Officer Finance and Operations
RedHill Biopharma Ltd.
21 Ha’arba’a Street
Tel Aviv 64739, Israel

Re: RedHill Biopharma Ltd .
Draft Registration Statement on Form 20 -F
Submitted September 12, 2012
  CIK No. 0001553846

Dear Mr. Shilo :

We have reviewed your draft registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please  respond to this letter by providing the requested information and either submitting
an amended draft registration statement or filing your registration statement on EDGAR.  If you
do not believe our comments apply to your facts and circumstances or do not  believe an
amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments  and your
amended draft registration statement or filed registration statement,  we may have  additional
comments.

Draft Registration Statement on Form 20 -F

General

1. Please note that our comments on your request for confidential treatment of exhibits to
your draft registration statement will be provided under separate cover.

2. Please amend your filing to disclose the exchange rate between the U.S. dollar and NIS
as of the latest practicable date, and amend all related discussion to reflect this exchange
rate.  We note that the relevant disclosure appears on pages 45 -46, 53, 60 -63, and 82 -83.

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 2

 Item 3.  K ey Information
D.  Risk Factors, page 3
“Clinical trials may involve and lengthy and expensive process . . .,” page 5

3. To the extent that you have experienced any problems with your clinical trials such as
those described in the bullet points on page 6, pl ease revise to describe those problems.

“Any collaborative arrangements that we establish may not be successful . . .,” page 6

4. To the extent that you have experienced any problems with your collaborative
arrangements such as those described in the bullet  points on page 7, please revise to
describe those problems.

“If third parties do not manufacture our therapeutic candidates . . .,” page 8

5. It appears this risk factor discusses two risks: the risk to your company of relying on third
parties for the manu facture of their therapeutic candidates, and the risk to your company
of your single supply source for your APIs.  Please amend your disclosure to discuss
these risks in separate risk factors, each accompanied by a specific, descriptive risk factor
header.

6. In the risk factor discussing your single supply source for your APIs, please identify the
source.  If you have a written agreement with this source, please expand your disclosure
in Item 4 to describe the material terms of the agreement, including each party’s
obligations, the term of the agreement, and any termination provisions.  Please also file
the agreement as an exhibit to your registration statement.

7. To the extent that you have experienced any problems with the third -party manufacturers
or supply  source such as those described in this risk factor, please revise to describe those
problems.

“We and our third -party manufacturers are, and will be, subject to regulations . . .,” page 8

8. To the extent that you have experienced any problems with the thi rd-party manufacturers
relating to cGMP, please revise to describe those problems.

“If we cannot meet requirements under our acquisition or in -license . . .,” page 10

9. Please amend the header of this risk factor to also describe the risk to your compan y of
not renewing or renegotiating your in -licensing agreements.

10. Please identify in the text of the risk factor the in -license agreements that are subject to
renegotiation or renewal.  In addition, please disclose when these contracts will come up
for ren egotiation or renewal .

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 3

 “Our business could suffer if we are unable to attract and retain key . . .,” page 10

11. Please amend this risk factor to identify the key employees on which you rely.

12. To the extent that you have experienced any problems attracting or retaining qualified
personnel, please revise to describe those problems.

“We could be exposed to significant drug product liability claims . . .,” page 13

13. Please expand this risk factor to quantify the extent of your product liability insurance
coverage.

“Our business involves risks related to handing regulated substances . . .,” page 14

14. To the extent you have experienced any problems such as those described in this risk
factor, please revise to disclose those problems.

“We may be a passive foreign investment company  . . .,” page 16

15. Disclose in this risk factor, as you have done on page  94 of the registration statement, that
“[b]ased  on [your] estimated gross income, the average value of [your] gross assets, and
the nature of [your] business, [you] believe that [you] may be classified as a PFIC in the
current taxable year and in future years.”  This statement of belief conveys a great er risk
than your statement that “there can be no assurance that we will not be considered a PFIC
for 2012 or for any future taxable year.”

“As a foreign private issuer, we are permitted to follow certain . . .,” page 18

16. Clarify that you may follow hom e country practice in Israel with regard to composition of
the board of directors, which does not require that a majority of a company’s board be
independent.

“We currently do not anticipate paying cash dividends, . . .,” page 19

17. Please a dd a risk factor  that discloses that the deposit agreement governs the rights of
ADR holders to receive dividends or other distributions, and discusses whether under the
deposit agreement, ADR holders may not have the same rights to, and in some
circumstances, may not rec eive dividends or other distributions issued by you to ordinary
shareholders.

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 4

 “Your rights and responsibilities as a shareholder will be governed . . .,” page 22

18. Please revise the risk factor heading to reference obligations rather than rights, and to
indicate that Israeli la w may impose obligations and liabilities on a shareholder of an
Israeli corporation that U.S. states do not impose upon shareholders of corporations
incorporated in their respective states .

Item 4.  Information on the Company
B. Business Overview, page 22
Our Therapeutic Candidates, page 23

19. If you have submitted an Investigational New Drug application to the FDA other than the
one described on page 30, please disclose this fact and state when you filed this
application.

RHB -104, page 28

20. You state on page 29 that you have entered into an agreement with Quest Diagnostics
Ltd. to develop a commercial diagnostic test for detecting the presence of MAP bacteria
in the blood.  Please expand your disclosure of this agreement to describe  all material
terms, including each part y’s obligations, any financial provisions, the term, and any
termination provisions.  In addition, please file this agreement as an exhibit to your
registration statement, or provide us with a legal analysis as to w hy this agreement need
not be filed pursuant to Instruction 4(a) to Exhibits of Form 20 -F.

RHB -106, page 32

21. Please identify the manufacturer of the drug PrepoPik.

Acquisition and License Agreements, page 34

22. Please expand your descriptions of the lice nse agreements governing RHB -101, RHB -
102, RHB -103, and RHB -104 that RedHill is entitled to terminate the agreement at any
time.

23. You discuss an obligation under your  joint development and commercialization
agreement with IntelGenx Corp to finance  RHB -103 development “in the amount of
approximately $849,000 subject to deviations of 10%.”  However, on page 50, you
indicate that clinical trials for RHB -103 were successfully completed as of June 30, 2012.
We a re unable to determine to what extent these  development costs have been recognized
through this date .  Please quantify these development costs for each period, quantify your
obligation for this financing obligation at June  30, 2012 and refer us to the technical
guidance that served as a basis for your accounting treatment .

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 5

 License Agreement for RHB -103, page 35
Acquisition of RHB -104, RHB -105, and RHB -106, page 36
License Agreement for MAP diagnostic test related to RHB -104, page 37
Manufacturing Agreement Related to RHB -105, page 38
Manufacturing Agre ement Related to RHB -106, page 38
Clinical Services Agreement Related to RHB -104, page 38

24. Please expand your description of the material terms of the above agreements to disclose
the term and termination provisions.

25. Please revise your description of th e Clinical Services Agreement related to RHB -104 to
disclose the aggregate amount of milestones payable under the agreement.

Manufacturing Agreements, page 37

26. Please explain the purpose and key terms governing the installment payment obligations
under your manufacturing agreements.

Intellectual Property, page 39

27. Please expand your description of the “Monopithic tablet for controlled drug release”
patent fami ly to identify the jurisdictions in which the three issued patents were granted.

D.  Property, Plant and Equipment , page 45

28. Please file the lease agreement dated February 23, 2011 as an exhibit to your registration
statement, or provide a legal analysis as to why the lease agreement need not be filed
pursuant to Instruction 4(b)(iv) to Exhibits of Form 20 -F.

Item 5.  Operating and Financial Review and Prospects
F. Tabular Disclosure of Contractual Obligations, page 56

29. Please disclose the installment pa yment obligations under your manufacturing
agreements.

Item 6.  Directors, Senior Management and Employees
B.  Compensation, page 60
Employment Agreements, page 60

30. Please file all executed employment agreements with your executive officers, pursuant to
Instruction 4(c) to Exhibits of Form 20 -F.

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 6

 C.  Board Practices, page 64

31. Please add a risk factor addressing the risks to your company from the provisions in
Israeli Companies Law regarding indemnification of office holders, as described on page
72.

Nasdaq Stock Market Listing Rules and Home Country Practices, page 68

32. Please clarify how the shareholder approval requirements under the Israeli Companies
Law are different than the shareholder approval requirements  under the Nasdaq
Marketplace Rules.

E.  Share Ownership, page 74

33. You provide information regarding the number of people you employ as of August 31,
2012.  Please amend the disclosure in this section to reflect the most recent practicable
date.

Item 7.  Major Shareholders and Related Part y Transactions
A.  Major Shareholders, page 77

34. The disclosure in this section reflects ownership as of August 31, 2012.  Please amend
the information to reflect the most recent practicable date.  Please refer to Item 7 of Form
20-F for guidance.

35. We note your disclosure that the “All of the information with respect to beneficial
ownership of the ordinary shares is given to the best of our knowledge.”  Please tell us
why you need to qualify your disclosure “to the best of [your] knowledge.”  Please
explain or delete the qualifying language.

36. Please expand your filing to provide the disclosure required by Item 7.A.2 of Form 20 -F.

Item 10.  Additional Information
C.  Material Contracts, page 88

37. On page 90, you refer to the Manufacturing Agreements describe d on pages 37 -39 as
“material agreements.”  However, not all manufacturing agreements have been filed as
exhibits to your registration statement pursuant to Instruction 4(a) as to Exhibits of Form
20-F.  Specifically, the manufacturing agreements related t o RHB -102, RHB -105, and
RHB -106 with Pharmaceutics International, Inc. and Corealis Pharma Inc. have not been
filed.  Please file these material agreements as exhibits, or provide us with a legal
analysis as to why these agreements need not be filed pursua nt to Instruction 4(a) to
Exhibits of Form 20 -F.

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 7

 E.  Taxation, page 90
Israeli Tax Considerations, page 90

38. This section should address the material tax consequences under Israeli law concerning
the purchase, ownership and disposition of your shares by U.S. holders and not just be “a
summary of the current tax regime of the State of Israel. . .”  Please r evise a ccordingly.

39. Delete your disclaimer that the Israeli tax discussion “is not intended and should not be
construed as legal or professional tax advice” since it inappropriately implies that an
investor is not entitled to rely on the tax information disclosed  in the registration
statement.

Item 12.  Description of Securities Other Than Equity Securities

40. Please disclose that, in connection with this Form 20 -F registration statement, a Form F -6
has been filed to register the ADSs under the Securities Act.  Ple ase further inform
investors that attached to the Form F -6 is a copy of the deposit agreement to which they
may refer.

41. Please expand your discussion under this section to explain:

 How ADSs are issued;
 How ADS holders may withdraw the deposited sec urities;
 How ADS holders may interchange between certificated and uncertificated ADSs;
 Whether the failure to give timely instructions to the depositary regarding the
exercise of voting rights will result in granting a discretionary proxy to the
depositary ;
 Whether the exercise of voting rights is conditioned under certain circumstances
on the timely withdrawal of the underlying securities;
 The fee structure under the deposit agreement;
 The effect of reclassifications, recapitalizations  and mergers on the A DSs; and
 Whether the deposit agreement permits the pre -release of ADSs and, if so,
whether the conditions governing such pre -release include the pre -release’s full
collateralization with cash or other collateral that the depositary considers
appropriate.

Item 18.  Financial Statements
Note 2  - Summary of Significant Accounting Policies , page F -14
General

42. Please disclose your  accounting treatment for the installment payment obligations to your
manufacturers, which aggregate $11.7 million.

Mr. Ori Shilo
RedHill Biopharma Ltd.
October 10, 2012
Page 8

 43. Disclose your accounting policy for costs incurred for clinical trials but have not yet been
billed to you.

Note 12  - Mandatory Convertible Loans and Royalty Obligation to Investors, page F -32

44. In August 2010, your initial royalty obligation represented the difference between
consideration received and the fair value of the mandatory convertible loans, which in
subsequent periods will accrete at a 27.98% effective interest rate. Prior to your February
2011 initial public offering, these loans converted into 19,818,314 o rdinary shares. Please
explain to us the method and key assumptions used to estimate the ultimate value of this
royalty obligation, the period over which you expect it to be paid and your basis for using
the 27.98% accretion rate. Refer us to the technical  guidance upon which you based your
accounting treatment for this obligation.

45. Please explain the relationship between the 5 -year royalty payment term “since beginning
of commercial sales for one of the therapeutic candidates” and the royalty payment
timeframe disclosed on page F -26.

46. Please explain the 5% royalty provision of the mandatory convertible loans that states
“income of the Company from advances or milestones as part of licensing transaction
will be paid over 5 years starting on August 11, 2010. ”

Note 21 -Loss Per Ordinary Share, page F -45

47. Ple