Oramed Pharmaceuticals Inc . (NASDAQ:ORMP), a biotech firm based in New York, has entered into a significant agreement with clinical research organization InClin, Inc. to advance its upcoming Phase 3 clinical trial. This was disclosed in an SEC filing on Thursday.
The subsidiary of Oramed, Oramed Ltd., committed to a Master Services Agreement with InClin on Monday, September 23, 2024. Under this agreement, InClin will provide a range of services essential for the execution of a Phase 3 clinical trial. These services include strategic planning, statistical analysis, data management, and regulatory support, among others.
The trial, which is subject to an Investigational New Drug application with the U.S. Food and Drug Administration, aims to evaluate the safety and effectiveness of ORMD-0801, Oramed's investigational oral insulin capsule, in around 300 type 2 diabetes patients.
Oramed Ltd. retains the right to terminate the agreement with a 30-day notice. Similarly, InClin can end the contract if Oramed Ltd. breaches terms and fails to remedy the situation within 30 days of notice. The financial commitment from Oramed Ltd. to InClin totals up to approximately $11.5 million, with payments spread over the course of the engagement based on the monthly services rendered by InClin.
This partnership marks a critical step for Oramed as it moves forward with its clinical development program for ORMD-0801. The company's focus is on the potential to offer a non-invasive treatment option for diabetes patients, which could significantly impact the pharmaceutical landscape for diabetes management.
The SEC filing also contains forward-looking statements cautioning that the company's plans and the success of the clinical trial are subject to various risks and uncertainties. These include potential delays, the need for additional funding, and the inherent challenges of developing new pharmaceutical products.
In other recent news, Oramed Pharmaceuticals Inc. has made a strategic financial 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 deal also modifies terms of the CS-5 Warrant, enabling Oramed to exercise it for Scilex Common Stock shares after September 2024. In addition, the due date for a $20 million amortization payment has been extended to September 2024.
Simultaneously, Oramed remains under the Neutral rating from H.C. Wainwright as the review process by China's National Medical Products Administration (NMPA) for Oramed's oral insulin candidate, ORMD-0801, continues. Oramed's Chinese partner, Hefei Tianhui Biotech Co., Ltd., has submitted Phase 3 trial data for this candidate, with another U.S. Phase 3 trial planned for later this year.
Lastly, Oramed has launched a stock buyback program authorizing the repurchase of up to $20 million of its common stock. The company has also made significant progress on a $101.87 million promissory note, receiving a substantial payment from Scilex Holding Company, marking the third principal payment installment of the note, 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) embarks on its pivotal Phase 3 clinical trial, investors and stakeholders can gain additional insight into the company's financial health and market performance through key metrics. The company's market capitalization stands at a modest $97.85 million, reflecting its status as a smaller player in the biotech industry. Despite facing challenges such as weak gross profit margins, Oramed holds an intriguing P/E ratio of 4.68, suggesting that its earnings relative to its share price are attractive to some investors.
Moreover, according to InvestingPro data, Oramed has managed to maintain a positive return on assets over the last twelve months as of Q2 2024, at 12.19%. This indicates efficiency in utilizing its assets to generate earnings. However, the company's stock price has experienced volatility, with a 1-month and 3-month total price return of -3.24% and -7.0%, respectively. This volatility is also reflected in the InvestingPro Tip highlighting the stock's price movements.
InvestingPro Tips further reveal that Oramed does not pay a dividend, which could be a consideration for income-focused investors. On a more positive note, the company's liquid assets exceed its short-term obligations, and analysts predict that Oramed will be profitable this year. For those considering a deeper dive into ORMP's financials and future prospects, InvestingPro offers additional tips and metrics to aid in making informed decisions. Visit InvestingPro for more tips on Oramed Pharmaceuticals Inc. and other investment opportunities.
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