Oramed Announces Additional $1M Payment on Tranche A Note

Oramed Pharmaceuticals Inc . (NASDAQ:ORMP), a biotech firm specializing in the development of oral drug delivery systems, has received an additional payment of approximately $1 million on October 24, 2024, as part of an ongoing repayment schedule. This payment is related to a Senior Secured Promissory Note, known as the Tranche A Note, which was originally issued to the company in the principal amount of $101,875,000.

The payment stems from the company's agreement with Scilex Holding Company, which was first disclosed on September 21, 2023. Under the terms of the agreement, Scilex assumed certain obligations of Sorrento Therapeutics (OTC:SRNE), Inc. and issued the Tranche A Note to Oramed, along with warrants to purchase shares of Scilex common stock.

Furthermore, on October 7, 2024, Oramed entered into a Securities Purchase Agreement to refinance a portion of the Tranche A Note and settle some of Scilex's other debts. As a result, the principal outstanding balance under the Tranche A Note was reduced by $22,500,000 in exchange for the issuance of a new series of notes, the Tranche B Notes, and related warrants.

The recent $1 million payment is part of mandatory prepayments required by the Tranche A Note, which dictates that 70% of the net cash proceeds from any debt or equity financings received by Scilex are to be used for such prepayments, subject to certain conditions. After this latest transaction, the remaining principal amount under the Tranche A Note stands at $80,200,000.

Oramed's business address is at 1185 Avenue of the Americas, 3rd Floor, New York, NY, and the company is incorporated in Delaware. This financial activity is part of Oramed's broader strategy to manage its investment and financing activities. The company's common stock is traded on The Nasdaq Capital Market and the Tel Aviv Stock Exchange under the ticker symbol ORMP.

In other recent news, Oramed Pharmaceuticals Inc. reported significant developments, including an $11.5 million agreement with InClin, Inc. for clinical trial services. This partnership is critical for Oramed's Phase 3 clinical trial, which will evaluate the safety and effectiveness of ORMD-0801, their investigational oral insulin capsule.

In financial developments, Oramed made a strategic adjustment with Scilex Holding Company, involving a $2 million payment. This payment will be divided between an amortization payment due in 2025 and the purchase of warrants from Scilex.

The company's stock rating remains Neutral, according to H.C. Wainwright, as the review process by China's National Medical Products Administration for Oramed's oral insulin candidate continues. The company's Chinese partner, Hefei Tianhui Biotech Co., Ltd., has submitted Phase 3 trial data for this candidate.

Oramed has also launched a stock buyback program authorizing the repurchase of up to $20 million of its common stock. Additionally, the company has made significant progress on a $101.87 million promissory note, receiving a substantial payment from Scilex Holding Company, raising the total amount paid to $40 million. These are the recent developments surrounding Oramed Pharmaceuticals Inc.

InvestingPro Insights

As Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) continues to manage its financial position through the repayment of the Tranche A Note, InvestingPro data provides additional context to the company's financial health. With a market capitalization of $93.77 million, Oramed's stock is currently trading at $2.32, which is 62.4% of its 52-week high. This pricing suggests there may be room for growth, especially considering that InvestingPro Tips indicate analysts predict the company will be profitable this year.

Notably, Oramed holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. These factors align with the company's ability to receive substantial payments and manage its financial agreements, as detailed in the article. However, investors should be aware that the stock price movements are quite volatile, which could present both opportunities and risks.

For those seeking a deeper understanding of Oramed's financial position, InvestingPro offers 7 additional tips that could provide valuable insights for investment decisions.

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