OraMed Enters Global Licensing Deal for Lidocaine Product

OraMed Pharmaceuticals Inc. (NASDAQ:ORMP), a pharmaceutical company specializing in the development of oral drug delivery systems with a market capitalization of $85 million and strong financial health metrics according to InvestingPro, has entered into a global licensing agreement with Scilex Pharmaceuticals Inc., as per the 8-K filing with the U.S. Securities and Exchange Commission.

On February 22, 2025, Scilex Pharmaceuticals granted OraMed’s subsidiary, RoyaltyVest Ltd., an exclusive license to develop, manufacture, and commercialize lidocaine-based products outside the United States and certain other territories. The agreement encompasses ZTlido, a lidocaine topical system, and SP-103, which are products developed by Scilex. The deal comes as OraMed maintains a robust balance sheet with minimal debt and a remarkable current ratio of 27.08.

OraMed has committed to use commercially reasonable efforts to obtain regulatory approval for the licensed lidocaine product in at least one major market country within 18 months from the effective date of the agreement. Additionally, the company is obligated to invest a minimum of $200,000 annually towards these efforts until regulatory approval is secured in the licensed territories.

The financial terms of the deal include a 50/50 split of net revenue generated from the sales of the product, with quarterly payments to Scilex Pharmaceuticals. Furthermore, Scilex is required to facilitate introductions and negotiations with current manufacturing and supply partners for the continuation of product manufacturing or supply in finished dosage form.

The license term will continue until the expiration of the last to expire licensed patents, unless terminated earlier. Also included in the filing is a Parent Guarantee by Scilex Holding Company, ensuring the performance of Scilex Pharma’s obligations under the licensing agreement.

This strategic move by OraMed aims to expand its product portfolio and market reach, leveraging Scilex’s developed lidocaine products. According to InvestingPro analysis, the company appears undervalued at its current trading price of $2.1, which is near its 52-week low. For investors seeking detailed insights, InvestingPro offers comprehensive analysis with additional ProTips and financial metrics to evaluate investment opportunities in undervalued pharmaceutical stocks.

In other recent news, Oramed Pharmaceuticals Inc . has announced the formation of a joint venture, OraTech Pharmaceuticals Inc., in collaboration with Hefei Tianhui Biotech Co., Ltd. Oramed will contribute its oral insulin and Protein Oral Delivery technology to OraTech, supported by a significant investment of $75 million, with $60 million from HTIT and $15 million from Oramed. Additionally, Oramed has extended the maturity date of a Senior Secured Promissory Note with Scilex Holding Company to December 31, 2025, as part of an amendment disclosed in an SEC filing. This amendment includes Oramed receiving 3,250,000 shares of Scilex common stock and introduces a covenant to prevent compensation increases for Scilex’s senior management while the note is outstanding. Oramed has also deferred a mandatory $6.25 million payment from Scilex to January 31, 2025, securing 5 million shares of Scilex common stock as collateral. Furthermore, Oramed confirmed the receipt of approximately $13.2 million from Scilex, applied towards a $15 million principal payment installment due in December 2024. These developments reflect Oramed’s strategic financial management and ongoing collaboration with Scilex.

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