Oramed Letter to Shareholders

Rhea-AI Summary

Oramed Pharmaceuticals has issued a Letter to Shareholders, highlighting several key developments. The company announced a $20 million stock repurchase program, reflecting confidence in its value. Oramed is actively engaging with the FDA on a new Phase 3 protocol for its oral insulin program, targeting specific patient subgroups. The company has received $40 million from the $102 million principal of Scilex Holding Company's Senior Secured Note, with the next $20 million installment due in September. Additionally, Oramed is finalizing a joint venture with Hefei Tianhui Biotech Co., (HTIT), which includes significant investments to support clinical and business activities. These initiatives aim to drive shareholder value and advance Oramed's oral drug delivery platforms.

Positive

• Oramed announced a $20 million stock repurchase program, showing confidence in its value.
• Received $40 million from Scilex Holding Company's $102 million Senior Secured Note, with a $20 million installment due in September.
• Finalizing a joint venture with HTIT, including $70 million from HTIT and $25 million from Oramed, to support the Phase 3 trial and other activities.

Negative

• There is uncertainty regarding the closure of the proposed transactions with HTIT, despite identified synergies.

Insights

Financial Analyst

The $20 million stock repurchase program suggests that Oramed's management believes its stock is undervalued. This can signal confidence in the company's future prospects and is often seen as a way to return value to shareholders. Stock repurchases tend to reduce the number of outstanding shares, increasing earnings per share (EPS) assuming profits remain constant, which can be attractive to investors.

However, it's essential to consider the potential opportunity cost of this capital allocation. While buybacks can provide short-term support for share prices, the company might have alternatively invested this money into research and development, marketing, or other growth initiatives. For Oramed, which is in a clinical stage, these investments could be critical to long-term success.

The Scilex Senior Secured Note repayment is another positive sign, enhancing Oramed's cash position. Receiving $40 million thus far, with an additional $20 million expected in September, provides liquidity which could be utilized for further clinical trials or business operations. It also demonstrates Scilex's ability to meet its financial obligations, reducing the risk related to this receivable.

Retail investors should recognize that while these financial maneuvers are beneficial, the long-term value hinges on the successful development and commercialization of Oramed’s clinical programs.

Medical Research Analyst

The Phase 3 Oral Insulin Program is a critical initiative for Oramed, focusing on diabetes management. The adaptive trial design, which targets specific patient subgroups identified from prior phases, shows a thoughtful approach to increasing the chances of success. This focus on significant responders can help address specific unmet needs in diabetes treatment, enhancing patient outcomes if successful.

Phase 3 trials are pivotal as they provide the data needed for regulatory approval. The engagement with the U.S. FDA is crucial, as it demonstrates a proactive regulatory strategy. Success in this trial could lead to substantial value creation, but investors should be aware of the inherent risks and long timelines associated with clinical trials.

From an investor’s perspective, understanding the nuances of clinical trials, including endpoints, trial design and regulatory interactions, is essential. These factors can significantly influence the likelihood of trial success and subsequent market approval.

Market Research Analyst

The Joint Venture with HTIT could be a strategic move to leverage synergies between Oramed’s innovation and HTIT's manufacturing capabilities. The $70 million capital commitment from HTIT and $25 million from Oramed indicate substantial investment geared towards the U.S. market, a key area for pharmaceutical growth.

This JV could expedite the commercialization of Oramed's oral insulin and POD™ pipeline, potentially reducing time-to-market. However, JVs also come with complexities such as integration risks and management of cross-border partnerships.

For retail investors, it's important to monitor the progress of this JV closely, as its success could significantly alter Oramed's market position and revenue potential. The complexity and uncertainty surrounding these partnerships should be considered, as they carry both high rewards and risks.

Given Oramed's strong cash reserves and strategic initiatives, the company appears well-positioned, but sustained progress and execution are pivotal.

• Stock Repurchase Program
• Scilex Senior Secured Note
• Phase 3 Oral Insulin Trial in US
• JV with Chinese Partner, HTIT

NEW YORK, June 26, 2024 /PRNewswire/ -- Oramed Pharmaceuticals Inc. (Nasdaq: ORMP) (TASE: ORMP)  ("Oramed") (www.oramed.com), a clinical-stage pharmaceutical company focused on the development of oral drug delivery platforms, today issued a Letter to Shareholders from its Chief Executive Officer, Nadav Kidron.

Dear Shareholders,

In light of our recent announcement regarding Oramed's $20 million stock repurchase program, we believe this is an opportune moment to provide our shareholders with a comprehensive update on our activities and progress. As this development demonstrates our confidence in Oramed's value and potential, we felt it was important to contextualize this decision within the broader landscape of our ongoing initiatives and future plans. This letter serves to offer you insights into our current position, strategic direction, and the exciting opportunities that lie ahead for Oramed. We remain committed to transparent communication and are pleased to share this overview with you.

Scilex Senior Secured Note

The repayment schedule from Scilex Holding Company for its Senior Secured Note commenced on December 21, 2023, with fixed installments due quarterly. As of today, Oramed has received $40 million out of the total $102 million principal (excluding interest and exit fees). This represents a significant portion of the expected returns from this strategic investment. The next milestone in this repayment plan is a $20 million installment, scheduled for September of this year.

Phase 3 Oral Insulin Program

Oramed has proactively engaged in constructive dialogue with the U.S. Food and Drug Administration regarding a new Phase 3 protocol. This refined approach is strategically focused on specific patient subgroups identified as significant responders through comprehensive analysis of both Phase 2 and Phase 3 data. By leveraging these insights, we aim to optimize the potential for success in our potential upcoming trial. This adaptive strategy underscores our commitment to advancing oral insulin therapy and potentially addressing a critical unmet need in diabetes management.

Oramed-HTIT Joint Venture Update

Oramed and its long-term partner, Hefei Tianhui Biotech Co., Ltd. (HTIT), are finalizing the formation of a joint venture (JV) centered around Oramed's cutting-edge oral drug delivery technology. The U.S.-based JV will focus on developing, marketing, and commercializing innovative products from Oramed's oral insulin and POD™ (Protein Oral Delivery) pipeline, leveraging HTIT's advanced manufacturing capabilities.

The JV will receive a significant capital infusion, with HTIT committing $70 million in cash and Oramed investing $25 million in cash and stock. These funds are strategically allocated to support the successful completion of the Phase 3 trial in the U.S., along with other crucial clinical and business activities. Furthermore, we are exploring strategies with HTIT to capitalize on their production capabilities and the expected launch of oral insulin sales.

While synergies exist, the proposed transactions are complex, and there is no certainty that we will be able to close on any or all of them. We will keep you informed as progress is made.

In summary, Oramed maintains a strong cash position, bolstered by solid progress on the Scilex note transaction. We are making strides towards initiating a new Phase 3 trial for our oral insulin program while actively pursuing the joint venture opportunity with HTIT. These strategic initiatives position us to drive significant shareholder value. Thank you for your continued support as we work diligently to achieve major milestones. We look forward to providing updates on our progress.

Sincerely,

Nadav Kidron
Chief Executive Officer

About Oramed Pharmaceuticals

Oramed Pharmaceuticals (Nasdaq/TASE: ORMP) is a platform technology pioneer in the field of oral delivery solutions for drugs currently delivered via injection. The Company's novel Protein Oral Delivery (POD™) technology is designed to protect drug integrity and increase absorption. Oramed has offices in the United States and Israel. For more information, please visit www.oramed.com.

Forward-looking statements: This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements. For example, we are using forward-looking statements when we discuss Oramed's opportunities and ability to increase shareholder value, our potential repurchase of our shares, the benefits of the Scilex note and related transactions, the value of Scilex, its growth trajectory, commercial portfolio and infrastructure and clinical stage pipeline, the anticipated regulatory approval of HTIT's clinical trial data and the timing of such approval, the expected timing and achievement of milestones, the potential development, benefits, safety, efficacy and timing of our oral insulin program, our intention to begin a Phase 3 oral insulin trial in the U.S. and the timing of such trial, the potential benefits, capabilities and overall success of our JV with HTIT, the closing of the transactions contemplated by the JV including receipt of expected capital contributions, the completion of clinical trials related to the JV and the expected launch of oral insulin sales in China, and the ability of our balance sheet to allow us to continue to the development of our oral insulin program and take advantage of strategic opportunities. In addition, historic results of scientific research and clinical trials do not guarantee that the conclusions of future research or trials will suggest identical or even similar conclusions. These forward-looking statements are based on the current expectations of the management of Oramed only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the risks and uncertainties related to the progress, timing, cost, and results of clinical trials and product development programs; difficulties or delays in obtaining regulatory approval or patent protection for our product candidates; competition from other pharmaceutical or biotechnology companies; and our ability to obtain additional funding required to conduct our research, development and commercialization activities. In addition, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; delays or obstacles in launching our clinical trials; changes in legislation; inability to close the transactions contemplated by our JV with HTIT in a timely manner or at all; inability of Scilex to repay the Note or our inability to realize the value of the Scilex warrants issued or transferred to us; inability to timely develop and introduce new technologies, products and applications; lack of validation of our technology as we progress further and lack of acceptance of our methods by the scientific community; inability to retain or attract key employees whose knowledge is essential to the development of our products; unforeseen scientific difficulties that may develop with our process; greater cost of final product than anticipated; loss of market share and pressure on pricing resulting from competition; laboratory results that do not translate to equally good results in real settings; our patents may not be sufficient; and finally that products may harm recipients, all of which could cause the actual results or performance of Oramed to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Oramed undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risks and uncertainties affecting Oramed, reference is made to Oramed's reports filed from time to time with the Securities and Exchange Commission.

Company Contact:

+1-844-9-ORAMED
ir@oramed.com

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SOURCE Oramed Pharmaceuticals Inc.

FAQ

What is Oramed's (ORMP) recent stock repurchase program announcement?

Oramed announced a $20 million stock repurchase program, reflecting their confidence in the company's value and potential.

How much has Oramed received from Scilex's Senior Secured Note?

Oramed has received $40 million out of the $102 million principal from Scilex's Senior Secured Note.

When is the next installment due from Scilex's Senior Secured Note?

The next $20 million installment from Scilex's Senior Secured Note is scheduled for September.

What is the focus of Oramed's new Phase 3 protocol for oral insulin?

Oramed's new Phase 3 protocol for oral insulin focuses on specific patient subgroups identified as significant responders.

What investments are involved in Oramed's joint venture with HTIT?

The joint venture involves $70 million from HTIT and $25 million from Oramed to support clinical and business activities.

What is the status of Oramed's joint venture with HTIT?

Oramed and HTIT are finalizing the joint venture, but there is no certainty on the closure of the proposed transactions.