UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022March 31, 2023
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-35813
ORAMED PHARMACEUTICALS INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 98-0376008 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
| 1185 Avenue of the Americas, Third Floor, New York, NY | 10036 | |
| (Address of Principal Executive Offices) | (Zip Code) |
844-967-2633
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||
| Common Stock, par value $0.012 | ORMP | The Nasdaq Capital Market, Tel Aviv Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of November 10, 2022,May 11, 2023, there were 39,114,73640,027,396 shares of the issuer’s common stock, $0.012 par value per share, outstanding.
ORAMED PHARMACEUTICALS INC.
FORM 10-Q
TABLE OF CONTENTS
On February 28, 2022, the Board of Directors approved a change of the Company’s fiscal year from the period beginning on September 1 and ending on August 31 to the period beginning on January 1 and ending on December 31. As a result, the Company filed a transition report on Form 10-Q with the Securities and Exchange Commission on March 30, 2022 that included financial information for the transition period from September 1, 2021 through December 31, 2021. Subsequent to that report, the Company’s fiscal year now begins on January 1 and ends on December 31. This Quarterly Report on Form 10-Q is the Company’s third quarterly report in its new fiscal year, and reports financial results for the three and nine month periods ended September 30, 2022.
As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our” and the “Company” mean Oramed Pharmaceuticals Inc. and our wholly-owned subsidiaries, unless otherwise indicated. All dollar amounts refer to U.S. Dollars unless otherwise indicated.
On September 30, 2022,March 31, 2023, the exchange rate between the New Israeli Shekel, or NIS, and the dollar, as quoted by the Bank of Israel, was NIS 3.5433.615 to $1.00. Unless indicated otherwise by the context, statements in this Quarterly Report on Form 10-Q that provide the dollar equivalent of NIS amounts or provide the NIS equivalent of dollar amounts are based on such exchange rate.
i
Cautionary Statement Regarding Forward-Looking Statements
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.laws and the Israeli securities law. Words such as “expects,” “anticipates,” “intends,” “plans,” “planned expenditures,” “believes,” “seeks,” “estimates,” “considers” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements include, among other statements, statements regarding the following:
| ● | our comprehensive analysis of data from our ORA-D-013-1 Phase 3 trial to understand if there is a path forward for our oral insulin candidate; |
| ● | our plan to evaluate potential strategic opportunities; |
| ● | our ability to enhance value for our stockholders; |
| ● | the expected development and potential benefits from our |
| ● | the prospects of entering into additional license agreements, or other partnerships or forms of cooperation with other companies or medical institutions; |
| ● | future milestones, conditions and royalties under |
| ● | expected timing of a clinical |
| ● | our research and development plans, including pre-clinical and clinical trials plans and the timing of enrollment, obtaining results and conclusion of |
| ● | our belief that our technology has the potential to deliver medications and vaccines orally that today can only be delivered via injection; |
| ● | the competitive ability of our technology based on product efficacy, safety, patient convenience, reliability, value and patent position; |
| ● | the potential market demand for our products; |
| ● | our ability to obtain patent protection for our intellectual property; |
| ● | our expectation that |
| ● | our expectations regarding our short- and long-term capital requirements; |
| ● | our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; and |
| ● | information with respect to any other plans and strategies for our |
Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended AugustDecember 31, 2021,2022, or our Annual Report, as filed with the Securities and Exchange Commission, or the SEC, on November 24, 2021,March 6, 2023, as well as those discussed elsewhere in our Annual Report and expressed from time to time in our other filings with the SEC. In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would not suggest different conclusions. Also, historic results referred to in this Quarterly Report on Form 10-Q could be interpreted differently in light of additional research, clinical and preclinical trials results. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report on Form 10-Q which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
ii
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2022MARCH 31, 2023
TABLE OF CONTENTS
| Page | |
| CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: | |
| Balance sheets | 2 |
| Statements of comprehensive loss | 3 |
| Statements of changes in stockholders’ equity | |
| Statements of cash flows | |
| Notes to financial statements | 6 |
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 33,196 | $ | 27,456 | ||||
| Short-term deposits | 121,119 | 111,077 | ||||||
| Marketable securities | 5,234 | 7,747 | ||||||
| Prepaid expenses and other current assets | 623 | 1,657 | ||||||
| Total current assets | 160,172 | 147,937 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term deposits | 2 | 25,094 | ||||||
| Long-term investments | 2,700 | - | ||||||
| Marketable securities | - | 3,875 | ||||||
| Amounts funded in respect of employee rights upon retirement | 23 | 26 | ||||||
| Property and equipment, net | 535 | 388 | ||||||
| Operating lease right-of-use assets | 1,005 | 500 | ||||||
| Total long-term assets | 4,265 | 29,883 | ||||||
| Total assets | $ | 164,437 | $ | 177,820 | ||||
| Liabilities and stockholders’ equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable, accrued expenses and other liabilities | $ | 4,205 | $ | 4,535 | ||||
| Deferred revenues | 2,022 | 2,703 | ||||||
| Payable to related parties | 70 | - | ||||||
| Operating lease liabilities | 228 | 130 | ||||||
| Total current liabilities | 6,525 | 7,368 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term deferred revenues | 4,000 | 3,340 | ||||||
| Employee rights upon retirement | 21 | 22 | ||||||
| Provision for uncertain tax position | 11 | 11 | ||||||
| Operating lease liabilities | 672 | 370 | ||||||
| Other liabilities | 61 | 99 | ||||||
| Total long-term liabilities | 4,765 | 3,842 | ||||||
| COMMITMENTS (note 2) | ||||||||
| Equity | ||||||||
| EQUITY ATTRIBUTABLE TO COMPANY’S STOCKHOLDERS: | ||||||||
| Common stock, $0.012 par value (60,000,000 authorized shares; 39,113,236 and 38,158,792 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively) | 470 | 459 | ||||||
| Additional paid-in capital | 307,876 | 292,514 | ||||||
| Accumulated deficit | (154,538 | ) | (126,520 | ) | ||||
| Total stockholders’ equity | 153,808 | 166,453 | ||||||
| Non-controlling interests | (661 | ) | 157 | |||||
| Total equity | 153,147 | 166,610 | ||||||
| Total liabilities and equity | $ | 164,437 | $ | 177,820 | ||||
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 24,104 | $ | 40,464 | ||||
| Short-term deposits | 127,363 | 111,513 | ||||||
| Marketable securities | 2,267 | 3,743 | ||||||
| Prepaid expenses and other current assets | 1,423 | 1,389 | ||||||
| Total current assets | 155,157 | 157,109 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term deposits | 7 | 7 | ||||||
| Long-term investments | 2,700 | 2,700 | ||||||
| Amounts funded in respect of employee rights upon retirement | 24 | 24 | ||||||
| Property and equipment, net | 977 | 815 | ||||||
| Operating lease right-of-use assets | 915 | 987 | ||||||
| Total long-term assets | 4,623 | 4,533 | ||||||
| Total assets | $ | 159,780 | $ | 161,642 | ||||
| Liabilities and stockholders’ equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 4,055 | $ | 4,158 | ||||
| Deferred revenues | 674 | 1,340 | ||||||
| Payable to related parties | 1 | 1 | ||||||
| Operating lease liabilities | 242 | 247 | ||||||
| Total current liabilities | 4,972 | 5,746 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term deferred revenues | 4,000 | 4,000 | ||||||
| Employee rights upon retirement | 26 | 21 | ||||||
| Provision for uncertain tax position | 11 | 11 | ||||||
| Operating lease liabilities | 564 | 647 | ||||||
| Other liabilities | 59 | 61 | ||||||
| Total long-term liabilities | 4,660 | 4,740 | ||||||
| COMMITMENTS (note 3) | ||||||||
| Equity | ||||||||
| EQUITY ATTRIBUTABLE TO COMPANY’S STOCKHOLDERS: | ||||||||
| Common stock, $0.012 par value (60,000,000 authorized shares; 39,969,979 and 39,563,888 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively) | 481 | 476 | ||||||
| Additional paid-in capital | 316,965 | 314,417 | ||||||
| Accumulated deficit | (166,476 | ) | (163,081 | ) | ||||
| Total stockholders’ equity | 150,970 | 151,812 | ||||||
| Non-controlling interests | (822 | ) | (656 | ) | ||||
| Total equity | 150,148 | 151,156 | ||||||
| Total liabilities and equity | $ | 159,780 | $ | 161,642 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| REVENUES | $ | 2,022 | 2,022 | $ | 682 | 682 | ||||||||||
| RESEARCH AND DEVELOPMENT EXPENSES | 20,362 | 15,452 | 5,347 | 6,086 | ||||||||||||
| SALES AND MARKETING EXPENSES | 1,433 | 172 | 463 | 172 | ||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | 11,085 | 4,937 | 3,061 | 1,909 | ||||||||||||
| OPERATING LOSS | 30,858 | 18,539 | 8,189 | 7,485 | ||||||||||||
| FINANCIAL INCOME (EXPENSE), NET | 1,930 | 1,031 | 1,036 | (51 | ) | |||||||||||
| LOSS BEFORE TAX EXPENSES | 28,928 | 17,508 | 7,153 | 7,536 | ||||||||||||
| TAX EXPENSES | 100 | - | 100 | - | ||||||||||||
| NET LOSS FOR THE PERIOD | $ | 29,028 | 17,508 | $ | 7,253 | 7,536 | ||||||||||
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 1,010 | 764 | 193 | 279 | ||||||||||||
| NET LOSS ATTRIBUTABLE TO STOCKHOLDERS | 28,018 | 16,744 | 7,060 | 7,257 | ||||||||||||
| LOSS PER SHARE | ||||||||||||||||
| BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK | $ | 0.72 | $ | 0.54 | $ | 0.18 | $ | 0.21 | ||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK | 38,856,514 | 31,097,270 | 39,100,231 | 34,539,487 | ||||||||||||
Three months ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| REVENUES | $ | 666 | 666 | |||||
| RESEARCH AND DEVELOPMENT EXPENSES | 4,427 | 5,836 | ||||||
| SALES AND MARKETING EXPENSES | 184 | 590 | ||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | 1,263 | 5,492 | ||||||
| OPERATING LOSS | 5,208 | 11,252 | ||||||
| FINANCIAL INCOME, NET | 1,597 | 544 | ||||||
| NET LOSS | $ | 3,611 | 10,708 | |||||
| NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 216 | 283 | ||||||
| NET LOSS ATTRIBUTABLE TO STOCKHOLDERS | 3,395 | 10,425 | ||||||
| BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK | $ | 0.08 | $ | 0.27 | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK | 40,041,258 | 38,679,622 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
U.S. Dollars in thousands
(UNAUDITED)
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2021 | 38,158 | $ | 459 | $ | 292,514 | $ | (126,520 | ) | $ | 166,453 | $ | 157 | $ | 166,610 | ||||||||||||||
| CHANGES DURING THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2022: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 770 | 9 | 7,336 | - | 7,345 | - | 7,345 | |||||||||||||||||||||
| EXERCISE OF WARRANTS AND OPTIONS | 34 | (* | ) | 42 | - | 42 | - | 42 | ||||||||||||||||||||
| STOCK-BASED COMPENSATION | 151 | 2 | 8,767 | - | 8,769 | - | 8,769 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION OF SUBSIDIARY | 192 | 192 | ||||||||||||||||||||||||||
| TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS | - | - | (783 | ) | - | (783 | ) | - | (783 | ) | ||||||||||||||||||
| NET LOSS | - | - | - | (28,018 | ) | (28,018 | ) | (1,010 | ) | (29,028 | ) | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2022 | 39,113 | $ | 470 | $ | 307,876 | $ | (154,538 | ) | $ | 153,808 | $ | (661 | ) | $ | 153,147 | |||||||||||||
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2022 | 39,564 | $ | 476 | $ | 314,417 | $ | (163,081 | ) | $ | 151,812 | $ | (656 | ) | $ | 151,156 | |||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED MARCH 31, 2023: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 193 | 2 | 2,428 | - | 2,430 | - | 2,430 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION | 213 | 3 | 120 | - | 123 | - | 123 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION OF SUBSIDIARY | 50 | 50 | ||||||||||||||||||||||||||
| NET LOSS | - | - | - | (3,395 | ) | (3,395 | ) | (216 | ) | (3,611 | ) | |||||||||||||||||
| BALANCE AS OF MARCH 31, 2023 | 39,970 | $ | 481 | $ | 316,965 | $ | (166,476 | ) | $ | 150, 970 | $ | (822 | ) | $ | 150,148 | |||||||||||||
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2021 | 38,158 | $ | 459 | $ | 292,514 | $ | (126,520 | ) | $ | 166,453 | $ | 157 | $ | 166,610 | ||||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED MARCH 31, 2022: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 277 | 3 | 2,966 | - | 2,969 | - | 2,969 | |||||||||||||||||||||
| EXERCISE OF WARRANTS AND OPTIONS | 4 | (* | ) | - | - | - | - | - | ||||||||||||||||||||
| STOCK-BASED COMPENSATION | 125 | 1 | 4,028 | - | 4,029 | - | 4,029 | |||||||||||||||||||||
| TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS | - | - | (677 | ) | - | (677 | ) | - | (677 | ) | ||||||||||||||||||
| NET LOSS | - | - | - | (10,425 | ) | (10,425 | ) | (283 | ) | (10,708 | ) | |||||||||||||||||
| BALANCE AS OF MARCH 31, 2022 | 38,564 | $ | 463 | $ | 298,831 | $ | (136,945 | ) | $ | 162,349 | $ | (126 | ) | $ | 162,223 | |||||||||||||
| (*) |
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2020 | 26,660 | $ | 320 | $ | 138,587 | $ | (99,938 | ) | $ | 38,969 | $ | - | $ | 38,969 | ||||||||||||||
| CHANGES DURING THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2021: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 5,860 | 70 | 74,673 | - | 74,743 | - | 74,743 | |||||||||||||||||||||
| EXERCISE OF WARRANTS AND OPTIONS | 3,164 | 38 | 21,458 | - | 21,496 | - | 21,496 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION | - | - | 2,896 | - | 2,896 | - | 2,896 | |||||||||||||||||||||
| ASSET ACQUISITION | - | - | 1,045 | - | 1,045 | 1,495 | 2,540 | |||||||||||||||||||||
| NET LOSS | - | - | - | (16,744 | ) | (16,744 | ) | (764 | ) | (17,508 | ) | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2021 | 35,684 | $ | 428 | $ | 238,659 | $ | (116,682 | ) | $ | 122,405 | $ | 731 | $ | 123,136 | ||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
U.S. Dollars in thousands
(UNAUDITED)
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2022 | 38,564 | $ | 463 | $ | 300,712 | $ | (147,478 | ) | $ | 153,697 | $ | (660 | ) | $ | 153,037 | |||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2022: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 493 | 6 | 4,371 | - | 4,377 | - | 4,377 | |||||||||||||||||||||
| EXERCISE OF WARRANTS AND OPTIONS | 30 | (* | ) | 42 | - | 42 | - | 42 | ||||||||||||||||||||
| STOCK-BASED COMPENSATION | 26 | 1 | 2,857 | - | 2,858 | - | 2,858 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION OF SUBSIDIARY | 192 | 192 | ||||||||||||||||||||||||||
| TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS | - | - | (106 | ) | - | (106 | ) | - | (106 | ) | ||||||||||||||||||
| NET LOSS | - | - | - | (7,060 | ) | (7,060 | ) | (193 | ) | (7,253 | ) | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2022 | 39,113 | $ | 470 | $ | 307,876 | $ | (154,538 | ) | $ | 153,808 | $ | (661 | ) | $ | 153,147 | |||||||||||||
| Common Stock | Additional paid-in | Accumulated | Total stockholders’ | Non- controlling | Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2021 | 32,513 | $ | 390 | $ | 198,730 | $ | (109,425 | ) | $ | 89,695 | $ | 1,010 | $ | 90,705 | ||||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2021: | ||||||||||||||||||||||||||||
| ISSUANCE OF COMMON STOCK, NET | 1,573 | 19 | 27,584 | - | 27,603 | - | 27,603 | |||||||||||||||||||||
| EXERCISE OF WARRANTS AND OPTIONS | 1,598 | 19 | 11,065 | - | 11,084 | - | 11,084 | |||||||||||||||||||||
| STOCK-BASED COMPENSATION | 1,280 | - | 1,280 | - | 1,280 | |||||||||||||||||||||||
| NET LOSS | - | - | - | (7,257 | ) | (7,257 | ) | (279 | ) | (7,536 | ) | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2021 | 35,684 | $ | 428 | $ | 238,659 | $ | (116,682 | ) | $ | 122,405 | $ | 731 | $ | 123,136 | ||||||||||||||
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(UNAUDITED)
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | March 31, | |||||||||||||||
| 2022 | 2021 | 2023 | 2022 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net loss | $ | (29,028 | ) | $ | (17,508 | ) | $ | (3,611 | ) | $ | (10,708 | ) | ||||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
| Depreciation | 41 | 69 | 37 | 11 | ||||||||||||
| Non-cash expense for acquired in-process research and development | - | 1,040 | ||||||||||||||
| Exchange differences and interest on deposits and held to maturity bonds | (933 | ) | 429 | (1,267 | ) | (235 | ) | |||||||||
| Changes in fair value of investments | 494 | (732 | ) | (65 | ) | (110 | ) | |||||||||
| Stock-based compensation | 8,961 | 2,896 | 173 | 4,029 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Prepaid expenses and other current assets | 1,034 | 128 | (34 | ) | (295 | ) | ||||||||||
| Accounts payable, accrued expenses and related parties | (330 | ) | 1,875 | (103 | ) | (1,151 | ) | |||||||||
| Net changes in operating lease | (105 | ) | - | (16 | ) | - | ||||||||||
| Deferred revenues | (21 | ) | (2,022 | ) | (666 | ) | (666 | ) | ||||||||
| Liability for employee rights upon retirement | (1 | ) | - | 5 | - | |||||||||||
| Other liabilities | 32 | (74 | ) | (2 | ) | - | ||||||||||
| Total net cash used in operating activities | (19,856 | ) | (13,899 | ) | (5,549 | ) | (9,125 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
| Purchase of held to maturity securities | - | (8,593 | ) | |||||||||||||
| Purchase of short-term deposits | (111,500 | ) | (6,000 | ) | (19,000 | ) | - | |||||||||
| Investment in long-term deposits | - | (25,000 | ) | |||||||||||||
| Proceeds from short-term deposits | 128,000 | 9,500 | 4,500 | 5,000 | ||||||||||||
| Proceeds from maturity of held to maturity securities | 5,336 | 6,065 | 1,496 | 2,406 | ||||||||||||
| Long-term investments | (2,700 | ) | - | |||||||||||||
| Proceeds from sale of mutual funds | - | 3,029 | ||||||||||||||
| Funds in respect of employee rights upon retirement | 3 | - | ||||||||||||||
| Purchase of property and equipment | (188 | ) | (55 | ) | (199 | ) | (47 | ) | ||||||||
| Total net cash provided by (used in) investing activities | 18,951 | (21,054 | ) | (13,203 | ) | 7,359 | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
| Proceeds from issuance of common stock, net of issuance costs | 7,345 | 74,743 | 2,430 | 2,969 | ||||||||||||
| Proceeds from exercise of warrants and options | 42 | 21,496 | ||||||||||||||
| Transaction with non-controlling interests | - | 1,500 | ||||||||||||||
| Tax withholdings related to stock-based compensation settlements | (783 | ) | - | - | (677 | ) | ||||||||||
| Total net cash provided by financing activities | 6,604 | 97,739 | 2,430 | 2,292 | ||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 41 | (3 | ) | (38 | ) | (15 | ) | |||||||||
| INCREASE IN CASH AND CASH EQUIVALENTS | 5,740 | 62,783 | ||||||||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (16,360 | ) | 511 | |||||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 27,456 | 21,630 | 40,464 | 27,456 | ||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 33,196 | $ | 84,413 | $ | 24,104 | $ | 27,967 | ||||||||
| (A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS - | ||||||||||||||||
| Interest received | $ | 906 | $ | 505 | $ | 308 | $ | 122 | ||||||||
| (B) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS - | ||||||||||||||||
| Recognition of operating lease right of use assets and liabilities | $ | 678 | $ | - | ||||||||||||
| (C) ASSET ACQUISITION TRANSACTION (see note 8) - | ||||||||||||||||
| In-process research and development | - | 1,040 | ||||||||||||||
| Transaction with non-controlling interests | - | 1,500 | ||||||||||||||
| Additional paid in capital | - | (1,045 | ) | |||||||||||||
| Non-controlling interests | $ | - | $ | (1,495 | ) | |||||||||||
| Recognition of operating lease right-of-use assets and liabilities | $ | - | $ | 647 | ||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:GENERAL:
| a. |
| Incorporation and Operations |
Oramed Pharmaceuticals Inc. (collectively with its subsidiaries, the “Company”, unless the context indicates otherwise), a Delaware corporation, was incorporated on April 12, 2002.
On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd. to acquire the provisional patent related to an orally ingestible insulin capsule to be used for the treatment of individuals with diabetes.
On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd. (the “Subsidiary”), which is engaged in research and development.
On July 30, 2019, the Subsidiary incorporated a wholly-owned subsidiary in Hong Kong, Oramed HK Limited (the “Hong Kong Subsidiary”). As of September 30, 2022,March 31, 2023, the Hong Kong Subsidiary has no operations.
On March 18, 2021, the Company entered into a license agreement (the “Oravax License Agreement”) with Oravax Medical Inc. (“Oravax”) and into a stockholders agreement (the “Stockholders Agreement”) with Akers Biosciences Inc. (“Akers”), Premas Biotech Pvt. Ltd. (“Premas”), Cutter Mill Capital LLC (“Cutter Mill”) and Run Ridge LLC (“Run Ridge”). According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63% of the issued and outstanding share capital of Oravax, on a fully diluted basis, as of the date of issuance. Consequently, Oramed consolidates Oravax in its consolidated financial statements since that time.
On November 23, 2021, Oravax incorporated a wholly-owned subsidiary in Israel, Oravax Medical Ltd., which is engaged in research and development. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to Oravax Medical Ltd.
On February 28, 2022,January 11, 2023, the Board of Directors approved a change ofCompany announced that the Company’s fiscal year from the period beginning on September 1ORA-D-013-1 Phase 3 trial did not meet its primary and ending on August 31 to the period beginning on January 1 and ending on December 31.secondary endpoints. As a result, the Company filedterminated this trial and a transition report on Form 10-Qparallel Phase 3, ORA-D-013-2 clinical trial. The Company has also initiated a comprehensive analysis of the data to understand if there is a path forward for its oral insulin candidate. Concurrently, the Company is examining its existing pipeline and has commenced an evaluation process of potential strategic opportunities, with the Securities and Exchange Commission on March 30, 2022 that included financial informationgoal of enhancing value for the transition period from September 1, 2021 through December 31, 2021. Subsequent toCompany’s stockholders. As these results are considered a triggering event, the Company evaluated all of its long lived assets which include fixed assets and operating lease right-of-use assets in the first quarter of 2023 and concluded that report, the Company’s fiscal year now begins on January 1 and ends on December 31.no impairment is required.
| Development and Liquidity Risks |
The Company is engaged in research and development in the biotechnology field for innovative pharmaceutical solutions, including an orally ingestible insulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules for delivery of other polypeptides, and has not generated significant revenues from its operations. Based on the Company’s current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that the Company will not need additional funds prior to such time. If there are unexpected increases in its operating expenses, the Company may need to seek additional financing during the next 12 months. Successful completion of the Company’s development programs and its transition to normal operations is dependent upon obtaining necessary regulatory approvals from the U.S. Food and Drug Administration prior to selling its products within the United States, obtaining foreign regulatory approvals to sell its products internationally, or entering into licensing agreements with third parties. There can be no assurance that the Company will receive regulatory approval of any of its product candidates, and a substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if at all. The Company also expects to incur substantial expenditures in connection with the regulatory approval process for each of its product candidates during their respective developmental periods. Obtaining marketing approval will be directly dependent on the Company’s ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and in other countries. The Company may also need additional funds to realize the decisions made as part of its strategic review process. The Company cannot predict the outcome of these activities.
In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its development timeline and its liquidity due to COVID-19. However, the Company has experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally. The Company may experience further delays if the pandemic worsens and continues for an extended period of time and it is continuing to assess the effect on its operations by monitoring the status of COVID-19.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 12 - SIGNIFICANT ACCOUNTING POLICIES POLICIES:(continued):
| Condensed consolidated financial statements preparation |
The condensed consolidated financial statements included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and, on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended AugustDecember 31, 20212022 (the “2021“2022 Form 10-K”). These condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results of the periods presented. Certain information and disclosures normally included in annual consolidated financial statements have been omitted in this interim period report pursuant to the rules and regulations of the Securities and Exchange Commission. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by U.S. GAAP for annual financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the 20212022 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results.
| Loss per common share |
Basic and diluted net loss per share of common stock are computed by dividing the net loss attributable to stockholders for the period by the weighted average number of shares of common stock outstanding for each period, including vested restricted stock units (“RSUs”). Outstanding stock options, warrants and unvested RSUs have been excluded from the calculation of the diluted loss per share because all such securities are anti-dilutive for all periods presented. The weighted average number of common stock options, warrants and RSUs excluded from the calculation of diluted net loss was 3,557,2003,357,911 and 4,736,797 for the nine month periods ended September 30, 2022 and September 30, 2021, respectively, and 3,715,540 and 3,644,4283,463,525 for the three month periods ended September 30,March 31, 2023 and March 31, 2022, and September 30, 2021, respectively.
| Revenue recognition |
HTIT
On November 30, 2015, the Company entered into a Technology License Agreement (the “TLA”), with Hefei Tianhui Incubator of Technologies Co. Ltd. (“HTIT”) and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016 (the “HTIT License Agreement”). The HTIT License Agreement and a stock purchase agreement,Stock Purchase Agreement, dated November 30, 2015, between the Company and HTIT (the “SPA”) were considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $49,500 between the HTIT License Agreement and the SPA according to their fair value, as follows: $10,617 was allocated to the issuance of common stock (less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of the SPA on December 28, 2015, and $38,883 was allocated to the HTIT License Agreement.
Under Accounting Standard Codification, (“ASC”) 606, the Company identified a single performance obligation in the agreement and determined that the license and services are not distinct as the license and services are highly dependent on each other. In other words, HTIT cannot benefit from the license without the related services, and vice versa.
Since the customer benefits from the services as the entity performs, revenue is recognized over time through the expected product submission date in June 2023, using the input method. The Company used the input method to measure the process for the purpose of recognizing revenue, which approximates the straight line attribution. The Company used significant judgment when it determined the product submission date.
Under ASC 606, the consideration that the Company would be entitled to upon the achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration. When assessing the portion, if any, of such milestones-related consideration to be included in the transaction price, the Company first assesses the most likely outcome for each milestone and excludes the consideration related to milestones of which the occurrence is not considered the most likely outcome.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 12 - SIGNIFICANT ACCOUNTING POLICIES (continued):
The Company then evaluates if any of the variable consideration determined in the first step is constrained by including in the transaction price variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company used significant judgment when it determined the first step of variable consideration.
The potential future royalty consideration is also considered a form of variable consideration under ASC 606 as it is based on a percentage of potential future sales of the Company’s products. However, the Company applies the sales-based royalty exception and accordingly will recognize the sales-based royalty amounts when the related sale has occurred. To date, the Company has not recognized any royalty-related revenue.
As of September 30, 2022,March 31, 2023, an aggregate amount of $22,382 was allocated to the HTIT License Agreement, all of which were received through the balance sheet date. Through September 30, 2022,March 31, 2023, the Company has recognized revenue associated with this agreement in the aggregate amount of $18,361,$19,708, of which $682$666 was recognized in the quarter ended September 30, 2022,March 31, 2023, and deferred the remaining amount of $4,022,$2,674, which is presented as deferred revenuesa contract liability on the condensed consolidated balance sheet.
Medicox
On September 1,November 13, 2022, the Company entered into a non-binding memorandum ofdistribution license agreement (“MOA”Medicox License Agreement”) with Medicox Co., Ltd. (“Medicox”) setting out basic commercial understandings between the parties that would form the basis of a definitive distribution license agreement that would grant. The Medicox theLicense Agreement grants Medicox an exclusive right and license to apply for regulatory approval for and distribute ORMD-0801 in the Republic of Korea. For further details, see note 3c.
Under ASC 606, the Company identified Medicox as a customer and the Medicox License Agreement as a contract with a customer.
The Company identified a performance obligation in the Medicox License Agreement to stand-ready and provide Medicox with support in its commercialization efforts in the Republic of Korea. This performance obligation includes a non-distinct distribution license for ORMD-0801, which the Company views a predominant item in the combined performance obligation. The Company concluded that the license is not distinct, as no party other than the Company is capable of providing related services to Medicox, and both the license and related services are necessary for the customer to obtain a regulatory approval in the Republic of Korea. In addition, the agreement covers the terms of future manufacturing services, that are contingent on the completion and success of the commercialization efforts.
The Medicox License Agreement contains a fixed consideration of $2,000, which was received by the Company in fiscal year 2022 and is presented under long-term deferred revenues as of March 31, 2023. It also contains variable consideration of contractual milestone payments and sales-based royalties.
The Company’s proprietary ORMD-0801 product, currently in development,obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period the Company expects to provide support to Medicox. As of March 31, 2023, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.
If Medicox proceeds with the regulatory approval process in the Republic of Korea, for a period of ten years, subject to complying with agreed distribution targets. The definitive agreement would include a transfer price per capsule, as well as milestone and royalty payments upon achievement of certain targets and events. The MOA includes an undertaking by the Company expects most of the revenue to be recognized in 2024, going forward. The Company notes that it willits Phase 3 trial did not engage in negotiations with or enter into anymeet its primary and secondary endpoints. If Medicox chooses to terminate the agreement withas a third party forresult of the grantoutcome of distribution and license rights to the Company’s proprietary ORMD-0801 product in the Republic of Korea until December 15, 2022. In consideration for this undertaking, Medicox has made a non-refundable payment of $2,000 toapplicable Phase 3 trials, the Company which was deferred as a contract liability (deferred revenue) as of September 30, 2022 until the potential execution of a definitive agreement. Aside from the foregoing undertakingexpects to accelerate revenue recognition and confidentiality obligations, the MOA is otherwise a non-binding document prepared for discussion purposes only and the execution of a definitive agreement is conditioned upon the mutual acceptance by the parties.recognize it at such time.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| Recently |
Financial instruments – credit losses
In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance will bebecame effective for the fiscal year beginning after December 15, 2022, including interim periods within that year. The adoptionCompany adopted the provisions of this guidance is not expected to have a significantupdate as of January 1, 2023, with no material impact on the Company’sits consolidated financial statements.
NOTE 2 - COMMITMENTS:
| Fair value |
The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:
| Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
| Level 2: | Observable prices that are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. |
| Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
As part of this agreement,March 31, 2023, the Subsidiary entered intoassets measured at fair value are comprised of equity securities (Level 1). The fair value of held to maturity bonds as presented in note 4 was based on a patent transfer agreement (the “Patent Transfer Agreement”), according to whichLevel 2 measurement.
As of March 31, 2023, the Subsidiary assigned to Entera allcarrying amounts of its rights to a patent application relatedcash equivalents, short-term deposits and accounts payable approximate their fair values due to the oral administrationshort-term maturities of proteins that it has licensed to Entera since August 2010, in return for royalties of 3% of Entera’s net revenues and a license back of that patent application for usethese instruments.
The amounts funded in respect of diabetes and influenza. As of September 30, 2022, Entera had not paid any royalties to the Subsidiary. On December 11, 2018, Entera announced that it had entered into a research collaboration and license agreement with Amgen, Inc. (“Amgen”). To the extent that the license granted to Amgen results in net revenues as defined in the Patent Transfer Agreement, the Subsidiary will be entitled to the aforementioned royalties. As part of a consulting agreement with a third party dated February 15, 2011, the Subsidiary is obliged to pay this third party royalties of 8% of the net royalties received in respect of the patent that was sold to Entera in March 2011.
employee rights are stated at cash surrender value which approximates its fair value.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 23 - COMMITMENTS(continued):
|
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - COMMITMENTS (continued):
| a. | On September 2, 2020 (effective as of January 15, 2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a clinical research organization (“CRO”) for the Subsidiary’s phase 3 clinical trial for its oral insulin. The CRO Services Agreement was amended effective May 26, 2022 and as consideration for its services, the Subsidiary will pay the CRO a total amended amount On January 11, 2023, the Company announced that the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints. As a result, the Company terminated this trial. |
| On September 16, 2020 (effective as of January 15, 2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiary’s phase 3 clinical trial for its oral insulin. The CRO Services Agreement was amended effective May 26, 2022 and as consideration for its services, the Subsidiary will pay the CRO a total amended amount On January 11, 2023, the Company announced that the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints. As a result, the Company terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. |
| c. | On The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea. The Medicox License Agreement is for ten years, but the parties have the right to terminate it upon 180 days’ notice. Medicox will comply with agreed distribution targets and will purchase ORMD-0801 at an agreed upon transfer price per capsule. In addition, Medicox will pay the Company up to $15,000 in developmental milestones, $2,000 of which have already been received by the Company, and up to 15% royalties on gross sales. Medicox will also be responsible for obtaining a The Company is currently evaluating with Medicox a path forward to For |
| Grants from the Israel Innovation Authority (“IIA”) |
Under the terms of the Company’s funding from the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on LIBOR.
At the time the grants were received, successful development of the related projects was not assured. The total amount received through September 30, 2022March 31, 2023 was $2,208 ($2,5302,542 including interest).
As of September 30, 2022,March 31, 2023, the liability to the IIA was $133. $96.
FollowingThe royalty expenses which are related to the Company’s 2019 annual meetingfunded project were recognized in cost of stockholders, a complaint was filedrevenues in the Court of Chancery of the State of Delaware against the Company and the members of the Board of Directors. On April 27, 2022, the Court of Chancery of the State of Delaware approved the terms of a settlement between the Company and the plaintiff in the complaint, awarding the plaintiff an amount of $850 in attorneys’ fees, which was paid on April 28, 2022 and included in general and administrative expenses in the first quarter of 2022. All other details of the settlement were previously agreed by the parties and acted upon at the Company’s 2021 annual meeting of stockholders.
On August 26, 2022, the Company entered into a stock purchase agreement with Diasome Pharmaceuticals, Inc. (“Diasome”) pursuant to which the Company purchased shares of Series B preferred stock of Diasome for an aggregate purchase price of approximately $2,700. Following the purchase, the Company holds less than 5% of the issued and outstanding stock of Diasome on a diluted basis. The stock purchase agreement provides the Company with the option to purchase additional preferred shares of stock on a pro rata basis at similar terms to the terms and conditions of the current round contingent upon Diasome achieving certain milestones.
The Company will account for the investment under the measurement alternative in ASC 321, whereby the equity investment is recorded at cost, less impairment. The carrying amount will be subsequently remeasured to its fair value in accordance with the provisions of ASC 820 when observable price changes occur as of the date the transaction occurred, or it is impaired. Any adjustments to the carrying amount are recorded in net income.
Diasome is the developer of Hepatocyte Directed Vesicles (HDV™), a liver targeting system in development for drugs used to treat diabetes. When combined with insulin, HDV™ enables preferential insulin delivery to liver hepatocytes in order to reduce the risk of hypoglycemia in patients.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 3 - FAIR VALUE:
The Company measures fair value and discloses fair value measurements for financial assets. Fair value is based on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:
As of September 30, 2022, the assets measured at fair value are comprised of equity securities (Level 1). The fair value of held to maturity bonds as presented in note 4 was based on a Level 2 measurement.
As of September 30, 2022, the carrying amounts of cash equivalents, short-term deposits and accounts payable approximate their fair values due to the short-term maturities of these instruments.
The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value.
NOTE 4 - MARKETABLE SECURITIES:
The Company’s marketable securities include investments in equity securities of DNA andGROUP (T.R.) Ltd. (formerly D.N.A Biomedical Solutions Ltd.) (“DNA”), Entera Bio Ltd. (“Entera”) and in held to maturity securities.
| a. | Composition: |
| September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Short-term: | ||||||||||||||||
| DNA (see b below) | $ | 584 | $ | 863 | $ | 366 | $ | 352 | ||||||||
| Entera (see c below) | 122 | 337 | 136 | 85 | ||||||||||||
| Held to maturity securities (see d below) | 4,528 | 6,547 | 1,765 | 3,306 | ||||||||||||
| $ | 5,234 | $ | 7,747 | $ | 2,267 | $ | 3,743 | |||||||||
| Long-term: | ||||||||||||||||
| Held to maturity securities (see d below) | $ | - | $ | 3,875 | ||||||||||||
| $ | 5,234 | $ | 11,622 | |||||||||||||
| b. | DNA |
The DNA ordinary shares are traded on the Tel Aviv Stock Exchange. The fair value of those securities is measured at the quoted prices of the securities on the measurement date.
During the three month period ended March 31, 2023, the Company did not sell any of DNA’s ordinary shares. As of September 30, 2022,March 31, 2023, the Company owns approximately 1.4% of DNA’s outstanding ordinary shares.
The cost of the securities as of both September 30, 2022March 31, 2023 and December 31, 20212022 was $595.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - MARKETABLE SECURITIES (continued):
| c. | Entera |
Entera ordinary shares have been traded on The Nasdaq Capital Market since June 28, 2018. The Company measures the investment at fair value from such date, since it has a readily determinable fair value (prior to such date the investment was accounted for as a cost method investment (amounting to $1)).
| d. | Held to maturity securities |
The amortized cost and estimated fair value of held to maturity securities as of September 30, 2022,March 31, 2023, were as follows:
| September 30, 2022 | March 31, 2023 | |||||||||||||||||||||||||||||||
| Amortized cost | Gross unrealized gains (losses) | Estimated fair value | Average yield to maturity rate | Amortized cost | Gross unrealized gains (losses) | Estimated fair value | Average yield to maturity rate | |||||||||||||||||||||||||
| Short-term: | ||||||||||||||||||||||||||||||||
| Commercial bonds | $ | 4,485 | $ | (129 | ) | $ | 4,356 | 1.05 | % | $ | 1,738 | $ | (40 | ) | $ | 1,698 | 0.84 | % | ||||||||||||||
| Accrued interest | 43 | - | 43 | 27 | - | 27 | ||||||||||||||||||||||||||
| $ | 4,528 | $ | (129 | ) | $ | 4,399 | $ | 1,765 | $ | (40 | ) | $ | 1,725 | |||||||||||||||||||
The amortized cost and estimated fair value of held to maturity securities as of December 31, 2021,2022, were as follows:
| December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||||||
| Amortized cost | Gross unrealized gains (losses) | Estimated fair value | Average yield to | Amortized cost | Gross unrealized gains (losses) | Estimated fair value | Average yield to | |||||||||||||||||||||||||
| Short-term: | ||||||||||||||||||||||||||||||||
| Commercial bonds | $ | 6,432 | $ | (115 | ) | $ | 6,317 | 1.37 | % | $ | 3,258 | $ | (82 | ) | $ | 3,176 | 1.07 | % | ||||||||||||||
| Accrued interest | 115 | - | 115 | 48 | - | 48 | ||||||||||||||||||||||||||
| $ | 3,306 | $ | (82 | ) | $ | 3,224 | ||||||||||||||||||||||||||
| Long-term | 3,875 | (29 | ) | 3,846 | 1.20 | % | ||||||||||||||||||||||||||
| $ | 10,422 | $ | (144 | ) | $ | 10,278 | ||||||||||||||||||||||||||
Held to maturity securities which will mature during the 12 months from the balance sheet date are included in short-term marketable securities. Held to maturity securities with maturity dates of more than one year are considered long-term marketable securities.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 5 - STOCKHOLDERS’ EQUITY:
On September 1, 2021, the Company entered into a controlled equity offering agreement (the “Cantor Equity Distribution Agreement”) with Cantor Fitzgerald & Co., as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021. The Company paid the sales agent a cash commission of 3.0% of the gross proceeds of the sale of any shares sold through the sales agent under the Cantor Equity Distribution Agreement. As of March 31, 2023 and May 11, 2023, 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $26,253.
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 5 - STOCKHOLDERS’ EQUITY (continued):
|
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 6 - LEASESLEASES:
The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company’s incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located.
The Company has various operating leases for office space and vehicles that expire through 2027. Below is a summary of ourthe Company’s operating right-of-use assets and operating lease liabilities as of September 30, 2022March 31, 2023 and December 31, 2021:2022:
| September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| Operating right-of-use assets | $ | 1,005 | $ | 500 | $ | 915 | $ | 987 | ||||||||
| Operating lease liabilities, current | 228 | 130 | 242 | 247 | ||||||||||||
| Operating lease liabilities long-term | 672 | 370 | 564 | 647 | ||||||||||||
| Total operating lease liabilities | $ | 900 | $ | 500 | $ | 806 | $ | 894 | ||||||||
Lease payments for the Company’s right-of-use assets over the remaining lease periods as of September 30, 2022March 31, 2023 and December 31, 20212022 are as follows:
| September 30, 2022 | December 31, 2021 | March 31, 2023 | December 31, 2022 | |||||||||||||
| 2022 | $ | 68 | $ | 155 | ||||||||||||
| 2023 | 270 | 140 | 212 | 291 | ||||||||||||
| 2024 | 270 | 140 | 283 | 291 | ||||||||||||
| 2025 | 210 | 93 | 222 | 228 | ||||||||||||
| 2026 | 123 | - | 120 | 124 | ||||||||||||
| 2027 | 10 | - | 10 | 10 | ||||||||||||
| Total undiscounted lease payments | 951 | 528 | 847 | 944 | ||||||||||||
| Less: Interest* | (51 | ) | (28 | ) | (41 | ) | (50 | ) | ||||||||
| Present value of lease liabilities | $ | 900 | $ | 500 | $ | 806 | $ | 894 | ||||||||
| * | Future lease payments were discounted by 3%-5.75% interest rate. |
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 7 - RELATED PARTY TRANSACTIONS:
On July 1, 2008, the Subsidiary entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the Chief Scientific Officer, whereby the President and Chief Executive Officer and the Chief Scientific Officer, through KNRY, provide services to the Company (the “Consulting Agreements”). The Consulting Agreements are both terminable by either party upon 140 days prior written notice. The Consulting Agreements, as amended, provide that KNRY will be reimbursed for reasonable expenses incurred in connection with the performance of the Consulting Agreements and that the monthly consulting fee paid to the President and Chief Executive Officer and the Chief Scientific Officer is NIS 146,705 ($41) and NIS 106,400 ($30)29), respectively.
In addition to the Consulting Agreements, based on a relocation cost analysis, the Company payspaid for certain direct costs, related taxes and expenses incurred in connection with the relocation of the President and Chief Executive Officer to the U.S. During the ninethree months ended September 30, 2022,March 31, 2023, there were no such relocation expenses, were $201, compared to $198$143 for the ninethree months ended September 30, 2021.
NOTE 8 - ASSET ACQUISITION TRANSACTIONMarch 31, 2022.
On March 18, 2021,Following the Company entered into the Oravax License Agreement and into the Stockholders Agreement with Oravax. On that date, Oravax’s assets were (1) in process research and development of COVID-19 vaccine technology; and (2) $1,500 to be received in cash. According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63%relocation of the issued and outstanding share capital of Oravax, on a fully diluted basis, as of the date of issuance, for which we paid $1,500. Consequently, the Company consolidates Oravax in its consolidated financial statements since that time. In addition, under the terms of the Oravax License Agreement, the Company has licensed out to Oravax certain patent rights, know-how and information related to the Company’s oral drug delivery technology with respect to the combination with the COVID-19 vaccine technology.
In consideration for the grant of the License, the Oravax License Agreement provides that the Company will receive (i) royalties equal to 7.5% on net sales, as defined in the Oravax License Agreement, of each product commercialized by Oravax, its affiliates and permitted sublicensees related to the License during the term specified in the Oravax License Agreement, (ii) sublicensing fees equal to 15% of any non-sales-based consideration received by Oravax from a permitted sublicensee and (iii) other payments ranging between $25,000 to $100,000, based on certain sales milestones being achieved by Oravax. The parties further agreed to establish a development and steering committee, which will consist of three members, of which two members will be appointed by the Company, that will oversee the ongoing research, development, clinical and regulatory activity with respect to the Oravax product. Akers contributed $1,500 in cash to Oravax and a license agreement to the Oravax product which includes a maximum of 2.5% royalties of all net sales. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to its wholly-owned subsidiary, Oravax Medical Ltd.
Concurrently with the execution and delivery of the Oravax License Agreement, the Company entered into the Stockholders Agreement with Akers, Premas, Cutter Mill, and Run Ridge, entities controlled by Michael Vasinikovich and Craig Schwabe, former members of Cystron Biotech LLC (“Cystron,” and collectively with Akers, Premas, Cutter Mill and Run Ridge, the “Stockholders Parties”). Pursuant to the Stockholders Agreement, among other things, the Company has the right to appoint two out of the three members to the board of directors of Oravax (the “Oravax Board”), one of which is the Company’s Chief Executive Officer who will serve as the chairman of the Oravax Board, conditioned upon the Company maintaining certain ownership thresholds. Akers has the right, until the third anniversary of the Stockholders Agreement effective date, to appoint one member to the Oravax Board. Oravax’s common stock held by the Stockholders Parties is subject to certain transfer restrictions. In addition, the Stockholders Parties have certain rights of participation in future financings as well as rights of first refusal and co-sale related to future potential transactions. Nadav Kidron, the Company’s President and Chief Executive Officer was oneto the State of Israel, the Company entered into two agreements with the President and Chief Executive Officer, replacing his above-mentioned consulting agreement through KNRY, substantially on the same terms, in order to allocate his time and services between the Company and the Subsidiary.
Effective November 1, 2022, the Company entered into a consulting agreement with Shnida Ltd., whereby the President and Chief Executive Officer, through Shnida Ltd., provides services as President and Chief Executive Officer of the former membersCompany. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that Shnida Ltd. will be reimbursed for reasonable expenses incurred in connection with performance of Cystron.the agreement and that the President and Chief Executive Officer will receive a monthly consulting fee of NIS 88,023 ($24), plus value added tax. Pursuant to the agreement, Shnida Ltd. and the President and Chief Executive Officer each agree that during the term of the agreement and for a 12-month period thereafter, none of them will compete with the Company nor solicit employees of the Company.
In addition, the Company, through the Subsidiary, has entered into an employment agreement with the President and Chief Executive Officer, effective as of November 1, 2022, pursuant to which the President and Chief Executive Officer receives gross monthly salary of NIS 46,901 ($13) in consideration for his services as President and Chief Executive Officer of the Subsidiary. In addition, the President and Chief Executive Officer is provided with a cellular phone and a company car pursuant to the terms of his agreement.
NOTE 8 - SUBSEQUENT EVENTS:
| 1. | On April 17, 2023, the Company granted an aggregate of 868,500 RSUs representing a right to receive shares of the Company’s common stock to executive officers and board members of the Company. The RSUs will vest in twelve equal quarterly installments starting May 1, 2023. The total fair value of these RSUs on the date of grant was $1,980, using the quoted closing market share price of $2.28 on the Nasdaq Capital Market on the date of grant. | |
| 2. | On April 17, 2023, the Company granted an aggregate of 245,500 performance based RSUs (“PSUs”) representing a right to receive shares of the Company’s common stock to executive officers of the Company. The PSUs will vest upon the Company’s common stock achieving and maintaining a specified price per share. The total fair value of these PSUs on the date of grant was $550, using the Monte-Carlo model. | |
| 3. | On May 1, 2023, the Company granted an aggregate of 20,000 RSUs representing a right to receive shares of the Company’s common stock to a board member. The RSUs will vest in twelve quarterly installments starting May 1, 2023. The total fair value of these RSUs on the date of grant was $49, using the quoted closing market share price of $2.45 on the Nasdaq Capital Market on the date of grant. |
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes included elsewhere herein and in our consolidated financial statements, accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report and our Transition Report on Form 10-Q for the transition period from September 1, 2021 to December 31, 2021.Report.
Overview of Operations
We are currently a pharmaceutical company currently engaged in the research and development of innovative pharmaceutical solutions with a technology platform that delivers protein orally instead of by injection. Our first drug candidate is an oral insulin capsule to be usedallows for the treatmentoral delivery of type 2 diabetes. We utilize clinical research organizations, or CROs, to conduct our clinical trials.therapeutic proteins.
Through our research and development efforts, weWe have successfully developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other proteins, such as Glucagon-like peptide-1, or GLP-1, leptin, and others.proteins. The excipients in the formulation are not intended to modify the proteins chemically or biologically, and the dosage form is designed to be safe to ingest.
On January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints. As a result, we terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. We plan to continue to conduct clinicalhave also initiated a comprehensive analysis of the data of both of these trials, to showunderstand if there is a path forward for our oral insulin candidate. Concurrently, we are examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the effectivenessgoal of enhancing value for our technology.stockholders.
Oral Insulin
Our proprietary flagship product, an orally ingestible insulin capsule, or ORMD-0801, allows insulin to travel from the gastrointestinal tract via the portal vein to the liver, revolutionizing the manner in which insulin is delivered. This novel mode of delivery closely mimics the human body’s delivery of endogenous insulin.
Phase 2b Trial: In February 2020, we announced positive topline data from the second and final cohort of our Phase 2b trial. Treatment with ORMD-0801 at all doses demonstrated an excellent safety profile, with no serious drug-related adverse events and with no increased frequency of hypoglycemic episodes or weight gain compared to placebo.
Phase 3 TrialType 2 Diabetes: We are currently conducting two concurrentconducted the ORA-D-013-1 Phase 3 trials intrial on patients with type 2 diabetes, or T2D. These trials involve about 1,125 patients and are aimed at providing evidence of ORMD-0801’s safety and efficacy in T2D, patients over a treatment period of 6 and 12 months, respectively. A geographically diverse patient population is being recruited from multiple sites throughout the United States, Europe, United Kingdom and Israel. Our Phase 3 trial is composed of two protocols:
ORA-D-013-1: This trial is currently being conducted on T2D patients with inadequate glycaemic control who are currentlywere on two or three oral glucose-lowering agents. This trial recruited 710 patients from over 90 clinical sites located throughout the U.S. Patients were randomized 2:2:1:1 (ORMD-0801 8mg once daily for 12 months; ORMD-0801 8mg twice daily for 12 months; Placebo for 6 months / ORMD-0801 8mg once daily for 6 months; Placebo for 6 months / ORMD-0801 8mg twice daily for 6 months) in this double-dummy trial. Capsules were taken 45 minutes before breakfast and prior to bedtime. The primary endpoint of the trial iswas to evaluate the efficacy of our oral insulin capsule, ORMD-0801, compared to placebo in improving glycaemic control as assessed by HbA1c, with a secondary efficacy endpoint of assessing the change from baseline in fasting plasma glucose at 26 weeks. We initiated thisOn January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial in December 2020. We completed enrollment in May 2022.
ORA-D-013-2: Thisdid not meet its primary and secondary endpoints. Following the results of the ORA-D-013-1 Phase 3 trial, includeswe also terminated the ORA-D-013-2 Phase 3 trial, a second Phase 3 trial that included T2D patients with inadequate glycaemic control who arewere attempting to manage their condition with either diet alone or with diet and metformin. A total of 450 patients are being recruited through 70 sites in the United States and between 12 and 16 sites in Western Europe and Israel. Patients are being randomized 1:1 into two cohorts dosed with: 8 mg ORMD-0801 at night; and placebo at night. The primary endpoint is to evaluate the efficacy of ORMD-0801 compared to placebo in improving glycaemic control as assessed by HbA1c over a 26-week treatment period, with a secondary efficacy endpoint of assessing the change from baseline in fasting plasma glucose at 26 weeks. We initiated this trial in the United States in March 2021. As of July 2022, 50% of the 450 patients planned for this trial were enrolled and randomized.
We expect to receive the efficacy data from the trials after patients have completed the first 6 months of treatment. Safety will be further monitored as patients will be exposed to the drug over an additional 6 months (total 12 months). Topline efficacy data for the ORA-D-013-1 trial is expected in January 2023 and we anticipate filing a BLA with the U.S. Food and Drug Administration, or FDA, in 2024 or 2025. A BLA would grant us at least 12 years of marketing exclusivity from the date of approval in the United States.
HTIT License. On November 30, 2015, we entered into a Technology License Agreement, or the TLA, with HTIT, and on December 21, 2015, these parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016.
On August 21, 2020, we received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA. We wholly dispute said claims and we are in discussions with HTIT in an attempt to reach a mutually agreeable solution. For further information, see note 2.b. to our interim condensed consolidated financial statements.
NASH trial: : In December 2020, we initiated a double blind, placebo controlled clinical trial of our oral insulin capsule, ORMD-0801 for the treatment of non-alcoholic steatohepatitis, or NASH, in type 2 diabetes. This 30 patient multi-center trial is comprised of five clinical sites: three in the United States and two in Israel. The trial was designed to measure change and percent change in MRI-PDFF from baseline to week 12. In March 2022, we completed patient enrollment.T2D. On September 13, 2022, we reported positive top line results from this trial, demonstrating that ORMD-0801 was safe and well tolerated at 8 mg twice daily dosing, meeting the primary endpoint of no difference in adverse events for ORMD-0801 compared to placebo. The trial also evaluated the effectiveness of ORMD-0801 in reducing liver fat content over the 12-week treatment period by observing several independent measures. All the measurements showed a consistent clinically meaningful trend in favor of ORMD-0801. We are currently evaluating our path forward for ORMD-0801 for NASH.
Oral Glucagon-Like Peptide-1
Oral GLP-1, is an incretin hormone, which stimulates the secretion of insulin from the pancreas. In addition to our flagship product, the ORMD-0801 insulin capsule, we use our technology for an orally ingestible GLP-1 capsule, or ORMD-0901.
In June 2021, we initiated a trial in T2D patients in the United States under an Investigational New Drug application filed with the FDA. Data from this trial is expected in the fourth quarter of 2022.
Oral Vaccine
On March 18, 2021, we entered intoformed Oravax, a license agreement, or the Oravax License Agreement, with Oravax, our 63% owned joint venture pursuant to which we granted to Oravax an exclusive, worldwide license of our rights in certain patents and related intellectual property relating to our proprietary oral delivery technology to further develop, manufacture and commercialize oral vaccines for COVID-19 and other novel coronaviruses based on Premas Biotech Pvt. Ltd.’s or Premas’s, proprietary vaccine technology involving a triple antigen virus like particle, or the Oravax product, which was previously owned by Cystron Biotech LLC, and later acquired by Akers Biosciences Inc., or Akers.particle. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to its wholly-owned subsidiary, Oravax Medical Ltd. For further details, regarding the Oravax License Agreement, see note 812 to our interim condensedthe audited consolidated financial statements.statements included in our Annual Report.
In October 2021, Oravax’s oral COVID-19 vaccine received clearance from the South African Health Products Regulatory Authority to initiate a Phase 1 trial and subsequently to commence patient enrollment in a first in human, Phase 1 clinical trial, for its oral COVID-19 vaccine and on December 14, 2021, Oravax screened and enrolled the first participant incommenced a Phase 1 clinical trial, of its oral virus-like particle (VLP) COVID-19 vaccine in Johannesburg, South Africa. The trial protocol calls forwhich was divided into two cohorts each comprised of 12 participants. The South African Health Products Regulatory Authority (SAPHRA) requires a 42-day safety waiting period once the last patient in Cohort A completes enrollment and dosing, after which Cohort B may commence enrollment and dosing. Due to several factors, including the fact that many volunteers did not qualify during screening due to prior asymptomatic COVID-19 infection and other conditions, the rate of enrollment was slower than anticipated and as a result, we added an additional clinical site. OnIn October 11, 2022, Oravax reported positive preliminary Phase 1 data for Cohort A of this trial, meeting primary and secondary endpoints of safety and immunogenicity. TheThese results from Cohort A included significant antibody response (2-6 fold over baseline) as measured by multiple markers of immune response to VLP vaccine antigens observed in the majority of the patients dosed, and no safety issues were observed, including mild symptoms. We expect Cohort B to completecompleted dosing in the fourth quarter of 2022 as well, withon January 5, 2023 and data is expected in the first half of 2023.
On December 29, 2021, Oravax signed a cooperation and purchase agreement for an initial pre-purchase of 10 million doses of oral COVID-19 vaccines with Tan Thanh Holdings to commercialize the vaccine in Southeast Asia.
COVID-19 Impact
We do not expect any material impact on our development timeline and our liquidity due to COVID-19. However, we have experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally. We may experience further delays if the pandemic worsens and continues for an extended period of time and we are continuing to assess the effect on our operations by monitoring the status of COVID-19.
Results of Operations
Comparison of nine and three month periodsperiod ended September 30,March 31, 2023 and March 31, 2022 and September 30, 2021
The following table summarizes certain statements of operations data of the Company for the nine and three month periods ended September 30,March 31, 2023 and March 31, 2022 and September 30, 2021 (in thousands of dollars except share and per share data):
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2022 | September 30, 2021 | September 30, 2022 | September 30, 2021 | |||||||||||||
| Revenues | $ | 2,022 | $ | 2,022 | $ | 682 | $ | 682 | ||||||||
| Cost of revenues | - | - | - | - | ||||||||||||
| Research and development expenses | 20,362 | 15,452 | 5,347 | 6,086 | ||||||||||||
| Sales and marketing expenses | 1,433 | 172 | 463 | 172 | ||||||||||||
| General and administrative expenses | 11,085 | 4,937 | 3,061 | 1,909 | ||||||||||||
| Financial income (expense), net | 1,930 | 1,031 | 1,036 | (51 | ) | |||||||||||
| Taxes on income | 100 | - | 100 | - | ||||||||||||
| Net loss for the period | $ | 29,028 | $ | 17,508 | $ | 7,253 | $ | 7,536 | ||||||||
| Basic and diluted loss per share of common stock | $ | 0.72 | $ | 0.54 | $ | 0.18 | $ | 0.21 | ||||||||
| Weighted average shares of common stock outstanding used in computing basic and diluted loss per share of common stock | 38,856,514 | 31,097,270 | 39,100,231 | 34,539,487 | ||||||||||||
| Three months ended | ||||||||
| March 31, 2023 | March 31, 2022 | |||||||
| Revenues | $ | 666 | $ | 666 | ||||
| Cost of revenues | - | - | ||||||
| Research and development expenses | 4,427 | 5,836 | ||||||
| Sales and marketing expenses | 184 | 590 | ||||||
| General and administrative expenses | 1,263 | 5,492 | ||||||
| Financial income, net | 1,597 | 544 | ||||||
| Net loss for the period | $ | 3,611 | $ | 10,708 | ||||
| Basic and diluted loss per share of common stock | $ | 0.08 | $ | 0.27 | ||||
| Weighted average shares of common stock outstanding used in computing basic and diluted loss per share of common stock | 40,041,258 | 38,679,622 | ||||||
Revenues
Revenues consist of proceeds related to the HTIT License Agreement that are recognized on a cumulative basis when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, through the expected product submission date by HTIT of June 2023, using the input method.
Revenues were $2,022,000$666,000 for the nine month periods ended September 30, 2022 and September 30, 2021.
Revenues were $682,000 foreach of the three month periods ended September 30, 2022March 31, 2023 and September 30, 2021.March 31, 2022.
Cost of Revenues
Cost of revenues consists of royalties related to the HTIT License Agreement that will be paid over the term of the HTIT License Agreement in accordance with revenue recognition accounting and the Israeli Law for the Encouragement of Industrial Research, Development and Technological Innovation, 1984, as amended, including any regulations or investment tracks promulgated thereunder.
There was no cost of revenues for the three and nine month periods ended September 30, 2022March 31, 2023 and September 30, 2021.March 31, 2022.
Research and Development Expenses
Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, employee benefits, costs of materials, supplies, the cost of services provided by outside contractors, including services related to our clinical trials, clinical trial expenses, the full cost of manufacturing drugs for use in research and preclinical development. All costs associated with research and development are expensed as incurred.
Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party service providers to assist us with the execution of our clinical trials.
Clinical activities, which relate principally to clinical sites and other administrative functions to manage our clinical trials, are performed primarily by CROs. CROs typically perform most of the start-up activities for our trials, including document preparation, site identification, screening and preparation, pre-trial visits, training and program management.
Clinical trial and pre-clinical trial expenses include regulatory and scientific consultants’ compensation and fees, research expenses, purchase of materials, cost of capsule manufacturing of the oral insulin and exenatide capsules, payments for patient recruitment and treatment, as well as salaries and related expenses of research and development staff.
Research and development expenses for the nine month period ended September 30, 2022 increased by 32% to $20,362,000, compared to $15,452,000 for the nine month period ended September 30, 2021. The increase was mainly due to higher expenses related to our Phase 3 clinical trials. Stock-based compensation expenses for the nine month period ended September 30, 2022 were $1,907,000, compared to $1,169,000 during the nine month period ended September 30, 2021. This increase was mainly due to equity awards granted to employees in 2022, and equity awards granted by Oravax to employees and board members of Oravax and to other service providers in September 2022.
Research and development expenses for the three month period ended September 30, 2022March 31, 2023 decreased by 12%24% to $5,347,000,$4,427,000, compared to $6,086,000$5,836,000 for the three month period ended September 30, 2021.March 31, 2022. The decrease was mainly due to lower research and development expenses in Oravax inrelated to the third quarter of 2022.Phase 3 trials that were terminated. Stock-based compensation expenses for the three month period ended September 30, 2022March 31, 2023 were $771,000,$17,000, compared to $495,000$562,000 during the three month period ended September 30, 2021.March 31, 2022. This increasedecrease was mainly due to performance equity awards granted to employees in 2022, and equity awards granted by Oravax to employees and board members of Oravax and to other service providers in September 2022.that did not meet their performance conditions during the period ended March 31, 2023.
Following the results of the ORA-D-013-1 Phase 3 trial, which did not meet its primary and secondary endpoints, we terminated both ORA-D-013-1 and ORA-D-013-2 Phase 3 clinical trials. In parallel, we have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate. We are examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.
Government grants
In the ninethree month periods ended September 30,March 31, 2023 and March 31, 2022, and September 30, 2021, we did not recognize any research and development grants. As of September 30, 2022,March 31, 2023, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $133,000.$96,000.
Sales and Marketing Expenses
Sales and marketing expenses include the salaries and related expenses of our commercial functions, consulting costs and other general costs. We anticipate that our commercial activities will increase in the future towards and following potential approval of our planned BLA submission for ORMD-0801.
Sales and marketing expenses for the nine month period ended September 30, 2022 increased by 733% to $1,433,000, compared to $172,000 for the nine month period ended September 30, 2021. The increase was mainly due to stock-based compensation expenses, salary related expenses and consulting expenses, mainly resulting from hiring our Chief Commercial Officer. Stock-based compensation costs for the nine month period ended September 30, 2022 were $887,000, compared to $142,000 during the nine month period ended September 30, 2021. This increase was mainly due to equity awards granted to an employee during fiscal years 2021 and 2022.
Sales and marketing expenses for the three month period ended September 30, 2022 increasedMarch 31, 2023 decreased by 169%69% to $463,000,$184,000, compared to $172,000$590,000 for the three month period ended September 30, 2021.March 31, 2022. The increasedecrease was primarily due to lower stock-based compensation expenses and consulting expenses. Stock-based compensation costs for the three month period ended September 30, 2022March 31, 2023 were $303,000,$88,000, compared to $142,000$364,000 for the three month period ended September 30, 2021.March 31, 2022. This increasedecrease was mainly due to performance equity awards granted to an employeethat did not meet their performance conditions during fiscal years 2021 and 2022.the period ended March 31, 2023.
General and Administrative Expenses
General and administrative expenses include the salaries and related expenses of our management, consulting costs, legal and professional fees, travel expenses, business development costs, insurance expenses and other general costs.
General and administrative expenses for the nine month period ended September 30, 2022 increased by 125% to $11,085,000, compared to $4,937,000 for the nine month period ended September 30, 2021. The increase was mainly due to higher stock-based compensation expenses, legal expenses and salary expenses. Stock-based compensation costs for the nine month period ended September 30, 2022 were $6,167,000, compared to $1,588,000 for the nine month period ended September 30, 2021. This increase was mainly due to equity awards granted to directors, officers and employees in 2022, and equity awards granted by Oravax to employees and board members of Oravax and to other service providers in September 2022.
General and administrative expenses for the three month period ended September 30, 2022 increasedMarch 31, 2023 decreased by 60%77% to $3,061,000$1,263,000 compared to $1,909,000$5,492,000 for the three month period ended September 30, 2021.March 31, 2022. The increasedecrease was mainly due to higherlower stock-based compensation expenses and salarylegal expenses. Stock-based compensation costs for the three month period ended September 30, 2022March 31, 2023 were $1,977,000,$67,000, compared to $644,000$3,103,000 for the three month period ended September 30, 2021.March 31, 2022. This increasedecrease was mainly due to equity awards that were granted to directors, officers and other employeesvested in the first quarter of 2022 and to performance equity awards granted by Oravax to employees and board members of Oravax and to other service providers in September 2022.that did not meet their performance conditions during the period ended March 31, 2023.
Financial Income, (Expense), Netnet
Net financial income was $1,930,000increased by 194% to $1,597,000 for the ninethree month period ended September 30, 2022,March 31, 2023, compared to $1,031,000$544,000 for the ninethree month period ended September 30, 2021.March 31, 2022. The increase was mainly due to interest from short and long-term bank deposits, partially offset by loss from revaluation of the shares we hold in Entera and DNA.
Net financial income was $1,036,000 for the three month period ended September 30, 2022, compared to a net expense of $51,000 for the three month period ended September 30, 2021. The increase was mainly due to interest from short and long-termshort-term bank deposits.
Basic and Diluted Loss Per Share of Common Stock
Basic and diluted loss per share of common stock for the nine month period ended September 30, 2022 increased by 33% to $0.72, compared to $0.54 for the nine month period ended September 30, 2021. The increase in loss was mainly due to the higher net loss together with a higher number of weighted average shares of common stock in the nine month period ended September 30, 2022 compared to the nine month period ended September 30, 2021.
Basic and diluted loss per share of common stock for the three month period ended September 30, 2022March 31, 2023 decreased by 14%70% to $0.18,$0.08, compared to $0.21$0.27 for the three month period ended September 30, 2021.March 31, 2022. The decrease in loss per share was mainly due to a higher number of weighted average shares of common stocklower net loss resulting from the changes set forth above in the three month period ended September 30, 2022March 31, 2023 compared to the three month period ended September 30, 2021.March 31, 2022.
Weighted Average Shares of Common Stock Outstanding
Weighted average shares of common stock outstanding for the ninethree month period ended September 30, 2022March 31, 2023 were 38,856,514,40,041,258, compared to 31,097,27038,679,622 for the ninethree month period ended September 30, 2021.March 31, 2022. The increase was mainly due to shares issued in connection with our controlled equity offering and registered direct offering.
Weighted average shares of common stock outstanding for the three month period ended September 30, 2022 were 39,100,231, compared to 34,539,487 for the three month period ended September 30, 2021. The increase was mainly due to shares issued in connection with our controlled equity offering and registered direct offering.
Liquidity and Capital Resources
From inception through September 30, 2022,March 31, 2023, we have incurred losses in an aggregate amount of $154,538,000.$166,476,000. During that period and through September 30, 2022,March 31, 2023, we have financed our operations through several private placements of our common stock, as well as public offerings of our common stock, raising a total of $248,769,000,$255,376,000, net of transaction costs. During that period, we also received cash consideration of $27,981,000$28,001,000 from the exercise of warrants and options. We expect to seek to obtain additional financing through similar sources in the future, as needed. As of September 30, 2022,March 31, 2023, we had $33,196,000$24,104,000 of available cash, $121,119,000$127,363,000 of short-term bank deposits and $5,234,000$2,267,000 of marketable securities.
From inception through September 30, 2022,March 31, 2023, we have not generated significant revenues from our operations. Management continues to evaluate various financing alternatives for funding new strategic activities, future research and development activities and general and administrative expenses through fundraising in the public or private equity markets. Although there is no assurance that we will be successful with those initiatives, management believes that it will be able to secure the necessary financing as a result of future third party investments. Based on our current cash resources and commitments, we believe we will be able to maintain our current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that we will not need additional funds prior to such time.
If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months. Successful completion of our development programs and our transition to normal operations is dependent upon obtaining necessary regulatory approvals from the FDA prior to selling our products within the United States, obtaining foreign regulatory approvals to sell our products internationally, or entering into licensing agreements with third parties. There can be no assurance that we will receive regulatory approval of any of our product candidates, and a substantial amount of time may pass before we achieve a level of revenues adequate to support our operations, if at all. We also expect to incur substantial expenditures in connection with the regulatory approval process for each of our product candidates during their respective developmental periods. Obtaining marketing approval will be directly dependent on our ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and in other countries. We may also need additional funds to realize the decisions made as part of our strategic review process. We cannot predict the outcome of these activities.
As of September 30,March 31, 2023, our total current assets were $155,157,000 and our total current liabilities were $4,972,000. On March 31, 2023, we had a working capital surplus of $150,185,000 and an accumulated loss of $166,476,000. As of December 31, 2022, our total current assets were $160,172,000$157,109,000 and our total current liabilities were $6,525,000.$5,746,000. On September 30,December 31, 2022, we had a working capital surplus of $153,647,000$151,363,000 and an accumulated loss of $154,538,000. As of$163,081,000. The decrease in working capital from December 31, 2021, our total current assets were $147,937,0002022 to March 31, 2023 was mainly due to a decrease in marketable securities, partially offset by a decrease in accounts payable and our total current liabilities were $7,368,000. On December 31, 2021, we had a working capital surplus of $140,569,000 and an accumulated loss of $126,520,000.accrued expenses.
During the ninethree month period ended September 30, 2022,March 31, 2023, cash and cash equivalents were $33,196,000, compareddecreased to $27,456,000$24,104,000, from $40,464,000 as of December 31, 2021.2022. The increasedecrease was mainly due to the reasons described below.
Operating activities used cash of $19,856,000$5,549,000 in the ninethree month period ended September 30, 2022,March 31, 2023, compared to $13,899,000$9,125,000 used in the ninethree month period ended September 30, 2021.March 31, 2022. Cash used in operating activities primarily consisted of research and development, sales and marketing and general and administrative expenses and changes in stock-based compensation expenses, interest on deposits, prepaid expenses and prepaidaccount payables and accrued expenses.
Investing activities providedused cash of $18,951,000$13,203,000 in the ninethree month period ended September 30, 2022,March 31, 2023, compared to cash used inprovided by investing activities of $21,054,000$7,359,000 in the ninethree month period ended September 30, 2021.March 31, 2022. Cash used by investing activities in the three month period ended March 31, 2023 consisted primarily of the purchase of short-term deposits partially offset by proceeds from held to maturity securities. Cash provided by investing activities in the ninethree month period ended September 30,March 31, 2022 consisted primarily of the proceeds fromof short-term deposits and from held to maturity securities, partially offset by the purchase of short-term deposits. Cash used in investing activities in the nine month period ended September 30, 2021 consisted primarily of the investing in long and short-term deposits and the purchase of held to maturity securities, partially offset by the proceeds from bonds held to maturity and from redemption of short-term deposits.securities.
Financing activities provided cash of $6,604,000$2,430,000 in the ninethree month period ended September 30, 2022,March 31, 2023, compared to $97,739,000$2,292,000 provided in the ninethree month period ended September 30, 2021.March 31, 2022. Cash provided by financing activities consisted primarily of proceeds from the issuance of our common stock and from the exercise of warrants and options.stock.
On September 1, 2021, we entered into a controlled equity offering agreement, or the Cantor Equity Distribution Agreement, with Cantor Fitzgerald & Co., as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to our effective shelf registration statement on Form S-3 including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021. We paid the sales agent a cash commission of 3.0% of the gross proceeds of the sale of any shares sold through the sales agent under the Cantor Equity Sales Agreement. As of November 10, 2022, 1,334,695March 31, 2023, 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $19,664,000.$26,253,000.
On November 3, 2021, we entered into a securities purchase agreement with several institutional and accredited investors, or the Purchasers, pursuant to which we agreed to sell, in a registered direct offering, or the Offering, an aggregate of 2,000,000 shares of our common stock to the Purchasers for an offering price of $25.00 per share. The closing of the sale of the shares occurred on November 5, 2021. The net proceeds to us from the Offering, after deducting the placement agent’s fees and expenses and the Company’s Offering expenses, were approximately $46,375,000.
On August 26, 2022, we entered into a stock purchase agreement with Diasome Pharmaceuticals, Inc., or Diasome, pursuant to which we purchased shares of Series B preferred stock of Diasome for an aggregate purchase price of approximately $2,700,000. Following the purchase, we hold less than 5% of the issued and outstanding stock of Diasome on a diluted basis. The stock purchase agreement provides us with the option to purchase additional preferred shares of stock on a pro rata basis at similar terms to the terms and conditions of the current round contingent upon Diasome achieving certain milestones.
Diasome is the developer of Hepatocyte Directed Vesicles (HDV™), a liver targeting system in development for drugs used to treat diabetes. When combined with insulin, HDV™ enables preferential insulin delivery to liver hepatocytes in order to reduce the risk of hypoglycemia in patients.
Critical accounting policies and estimates
Our critical accounting policies are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report.
Planned Expenditures
We invest heavily in research and development, and we expect that in the upcoming years our research and development expenses will continue to be our major operating expense.
Following the results of the Phase 3 trials for our oral insulin capsule candidate, ORMD-0801 and the current strategic review initiated by the Company, our obligations may change significantly.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no significant change in our exposure to market risk during the quarter ended September 30, 2022.March 31, 2023. For a discussion of our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report.
ITEM 4 - CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022.March 31, 2023. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2022March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 6 – EXHIBITS
| Number | Exhibit | |
| 31.1* | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 31.2* | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 32.1** | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350. | |
| 32.2** | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350. | |
| 101.1* | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended | |
| 104.1* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith |
| ** | Furnished herewith |
SIGNATURES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ORAMED PHARMACEUTICALS INC. | ||
| Date: | By: | /s/ Nadav Kidron |
| Nadav Kidron | ||
| President and Chief Executive Officer | ||
| Date: | By: | /s/ David Silberman |
| David Silberman | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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