ORAMED PHARMACEUTICALS INC
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
ORMP$3.86-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001213900-24-068992
ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001213900-24-095397
ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 95 current paragraphs.
32 unchanged; 26 reworded; 36 added; 7 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
2023 Scilex Transaction
Current report
On September 21, 2023, we entered into and consummated the transactions, or, collectively, the 2023 Scilex Transaction, contemplated by a securities purchase agreement, or the Scilex-Oramed SPA, with Scilex Holding Company, or Scilex, pursuant to which Scilex issued to us:
Current report
On August 30, 2024, Scilex agreed that 4,500,000 Closing Penny Warrants and 937,500 Subsequent Penny Warrants became exercisable as of such date.
Current report
On September 20, 2024, we and Scilex entered into an extension agreement, or the Extension Agreement, to extend the due date of the September 21, 2024 payment under the Tranche A Note. Pursuant to the Extension Agreement, Scilex paid us $2,000,000 on September 23, 2024, which payment is to be applied as follows: (i) $1,700,000 to the payment due under the Tranche A Note on March 21, 2025 and (ii) $300,000 to purchase the Transferred Warrants. In addition, 1,062,500 Subsequent Penny Warrants were accelerated from December 15, 2024 and became exercisable into shares of Scilex common stock at any time after September 20, 2024.
Current report
Scilex Refinancing
Current report
On October 7, 2024, we entered into a securities purchase agreement, or the Convertible Notes SPA, with certain institutional investors, or the Investors, and together with us, the Buyers, and Scilex, pursuant to which the Buyers purchased in a registered offering (i) a new tranche B of senior secured convertible notes of Scilex in the aggregate principal amount of $50,000,000, or the Tranche B Notes, which Tranche B Notes are convertible into shares of Scilex common stock and (ii) warrants, or the Tranche B Warrants, to purchase up to 7,500,000 shares of Scilex common stock. In the transaction, Scilex refinanced a portion of the Tranche A Note issued to us and paid off certain other indebtedness of Scilex. The transactions contemplated by the Convertible Notes SPA were consummated on October 8, 2024.
Current report
Senior Convertible Notes
Current report
The aggregate purchase price for the Tranche B Note issued to us and the related Tranche B Warrants was $22,500,000. The Tranche B Note issued to us bears an initial principal balance of $25,000,000 and an original issue discount of 10.0%. As consideration for the Tranche B Note and Tranche B Warrants, we exchanged a portion of the Tranche A Note resulting in a reduction of the principal outstanding balance under the Tranche A Note of $22,500,000. Additionally, Scilex used $12,500,000 of the net proceeds from the offering for the repayment and satisfaction of the outstanding balance under the Tranche A Note.
Current report
The Tranche B Notes bear interest at a rate of 5.5% per annum, payable in arrears on the first trading day of each calendar quarter, beginning January 2, 2025, payable, at Scilex’s option, either in cash or in shares of Scilex common stock, subject to certain conditions. Unless earlier converted or redeemed, the Tranche B Note will mature on the two-year anniversary of the issuance date, subject to extension at the option of us in certain circumstances as provided in the Tranche B Note. The Tranche B Notes will be Scilex’s senior secured obligation (alongside and under certain circumstances subordinate to, the Tranche A Note) and will rank senior to the right to payment of the holders of Scilex’s subordinated debt and will be pari passu with all other indebtedness of Scilex.
Current report
At any time after issuance, all amounts due under the Tranche B Notes are convertible, in whole or in part, and subject to certain beneficial ownership limitations, at our option, into Scilex common stock at the initial fixed conversion price of $1.09 per share, which is subject to adjustments provided that the conversion price cannot be lower than $1.04 unless Scilex shareholder approval is obtained. The Tranche B Notes may not be converted to the extent such conversion would result in our beneficially owning in excess of 4.99%, or the Maximum Percentage, of shares of the Scilex common stock outstanding immediately after giving effect to such conversion. At our option, the Maximum Percentage may be raised up to 9.99%, except that any increase will only be effective upon 61 days’ prior notice to Scilex.
Current report
Scilex has the right (assuming no failure of certain specific conditions relating to Scilex’s equity) to redeem in cash all, but not less than all, of the amount then outstanding under the Tranche B Notes at a 35% redemption premium to the greater of (i) the amount then outstanding under the Tranche B Notes to be redeemed and (ii) the equity value of the Scilex common stock underlying such Tranche B Notes. Scilex has a mandatory obligation to redeem the Tranche B Notes upon an event of default relating to bankruptcy. The Tranche B Notes are subject to redemption at the election of each holder in certain circumstances, including, a change of control of Scilex, a subsequent placement of certain securities of Scilex, and asset sales by Scilex. The Tranche B Notes contain affirmative and negative covenants binding on Scilex and its subsidiaries and prohibit Scilex from entering into specified fundamental transactions unless the successor entity assumes all of Scilex’s obligations under the Tranche B Notes.
Current report
The Tranche B Notes contain certain customary events of default, including, without limitation, a cross-default to other specified indebtedness or any other indebtedness involving an obligation of $5,000,000 or more. The interest rate of the Tranche B Notes will automatically increase to 15.0% per annum upon the occurrence and during the continuance of an event of default. Scilex is also required to pay a late charge of 15.0% on any amount of principal or other amounts that are not paid when due (solely to the extent such amounts are not then accruing interest at the default rate of 15.0% per annum).
Current report
In connection with any amortization, certain redemptions or other repayment of the Tranche B Notes, Scilex will also pay an amount equal to the amount of additional interest that would accrue under such Tranche B Notes at the interest rate then in effect assuming that the amount so converted, redeemed, amortized or otherwise repaid on such date of determination instead remained outstanding through and including the maturity date of such Tranche B Notes.
Current report
Scilex’s obligations under the Tranche A Note and Tranche B Notes are secured by a security interest in all or substantially all of the property of Scilex and each of its subsidiaries, respectively, pursuant to an amended and restated security agreement, or the Amended and Restated Security Agreement, with Scilex and its subsidiaries.
Current report
Tranche B Warrants
Current report
The Tranche B Warrants are exercisable for a period of five years from the date of issuance. The Tranche B Warrants issued to us at Closing will initially be exercisable for 3,750,000 shares of Scilex common stock, subject to the Maximum Percentage limitation.
Current report
The Tranche B Warrants will initially be exercisable for cash at an exercise price equal to $1.09 per share of Scilex common stock, subject to adjustments upon the occurrence of any stock split, stock dividend, stock combination, recapitalization, similar transactions and/or full-ratchet adjustment in connection with a subsequent offering at a per share price less than the fixed conversion price then in effect subject to a floor price of $1.04 unless shareholder approval is obtained. If at the time of exercise, there is no effective registration statement registering the shares of Scilex common stock underlying the Tranche B Warrants, such warrants may be exercised on a cashless basis pursuant to their terms.
Current report
Amendment to Scilex-Oramed SPA
Current report
In connection with the execution of the Convertible Notes SPA, on October 8, 2024, we, Scilex and the Agent amended the Scilex-Oramed SPA to account for the issuance of the Tranche B Notes and the execution of certain related documents, including the Subordination Agreement (as defined herein) and an agreement, or the Agreement Among Holders, pursuant to which we and the Investors agreed that, subject to certain conditions and exceptions, the payment of the obligations in respect of the Tranche B Notes will be subject to the prior payment in full of all obligations in respect of the Tranche A Note up to the Maximum First Out Amount (as defined in the Agreement Among Holders).
Current report
Royalty Transaction
Current report
On October 8, 2024, we and certain institutional investors, or, collectively, the RPA Purchasers, entered into a Purchase and Sale Agreement, or the Royalty Purchase Agreement, with Scilex and Scilex Pharmaceuticals Inc., or Scilex Pharma. Pursuant to the Royalty Purchase Agreement, the RPA Purchasers acquired the right to receive, in the aggregate, 8.0% of net sales worldwide for 10 years, or the Purchased Receivables, with respect to ZTlido (lidocaine topical system) 1.8%, SP-103 (lidocaine topical system) 5.4%, and any related, improved, successor, replacement or varying dosage forms of the foregoing, or the Covered Products. We have acquired the right to receive 50% of the Purchased Receivables, as more fully described in the Royalty Purchase Agreement.
Current report
In full consideration for the sale, transfer, conveyance and granting of the Purchased Receivables, and subject to the terms and conditions set forth in the Royalty Purchase Agreement, the aggregate purchase price paid by the RPA Purchasers for the Purchased Receivables was $5,000,000 (net of expenses of the RPA Purchasers). In consideration for our interest in the Purchased Receivables, we exchanged and reduced $2,500,000 of the principal balance under the Tranche A Note.
Current report
The Royalty Purchase Agreement terminates six months following receipt by the RPA Purchasers of all payments of the Purchased Receivables to which each RPA Purchaser is entitled thereunder during the period commencing on the date of closing and expiring on the tenth anniversary of such closing date.
Current report
Pursuant to the terms of the Royalty Purchase Agreement, Scilex Pharma entered into a security agreement with the collateral agent (as identified therein) for the benefit of the RPA Purchasers, dated as of October 8, 2024, or the Royalty Security Agreement. Under the Royalty Security Agreement, Scilex’s and Scilex Pharma’s due performance and payment under the Royalty Purchase Agreement is secured by certain collateral, including a collection account and certain material contracts, intellectual property rights and the regulatory approvals, in each case related to the Covered Products. Scilex Pharma, the collateral agent and the Agent also entered into a subordination agreement, or the Subordination Agreement, whereby the parties agreed that all obligations, liabilities and indebtedness under the Royalty Purchase Agreement will be secured by first priority liens on the collateral under the Royalty Security Agreement, or the Royalty Collateral, and all obligations under the Amended and Restated Security Agreement, including in respect of the Tranche A Note and the Tranche B Notes, will be secured by second priority liens on the Royalty Collateral and first priority liens on all other collateral granted under the Amended and Restated Security Agreement.
Current report
Binding Term Sheet Regarding Rest of World License Agreement
Current report
On October 8, 2024, we, certain other institutional investors and Scilex entered into a binding term sheet, or the ROW License Term Sheet, regarding a license and development agreement, or the Lido License Agreement, with respect to services, compositions, products, dosages and formulations comprising lidocaine, including without limitation, the product and any future product defined as a “Product” under Scilex Pharma’s existing (i) Product Development Agreement, dated as of May 11, 2011, with Oishi Koseido Co., Ltd., or Oishi, and Itochu Chemical Frontier Corporation, or Itochu, as amended, and (ii) the associated Commercial Supply Agreement, dated February 16, 2017, between Scilex, Oishi and Itochu, as amended. Subject to determination of a final structure for the transactions contemplated by the ROW License Term Sheet, it is anticipated that we and such institutional investors will hold the Lido License Agreement through a joint venture, Lido Dev Co.
Current report
In consideration for the rights to be provided under the proposed Lido License Agreement, as more fully described in the ROW License Term Sheet, (a) Lido Dev Co. will invest (whether through cash consideration or in-kind payment through the provision of services) $200,000 per year toward expanding the Product, (b) Scilex will grant Lido Dev Co. a worldwide, exclusive right, license and interest to all products rights for the development, out-licensing, commercialization of any Product outside of the United States and other territories, other than certain excluded designated territories, or the ROW Territory, and (c) each of Lido Dev Co. and Scilex will receive fifty percent of the net revenue (less expenses) generated from any Product in the ROW Territory.
Current report
Scilex is required to use its commercially reasonable efforts to obtain the consent of Oishi and Itochu to the Lido License Agreement. If that consent is not obtained within 30 days of execution of the ROW License Term Sheet, Lido Dev Co. has the right to designate an agent to continue negotiations directly with Oishi and Itochu. Definitive documents for the Lido License Agreement and related matters are subject to ongoing negotiation among the parties thereto.
Current report
Comparison of nine and three month periods ended September 30, 2024 and September 30, 2023
Current report
Research and development expenses for the three month period ended September 30, 2024 increased by 134% to $2,242,000, compared to $957,000 for the three month period ended September 30, 2023. The increase was due to costs related to the new Phase 3 clinical trial preparations.
Current report
We did not recognize any sales and marketing expenses for the nine month period ended September 30, 2024, compared to an income of $287,000 for the nine period ended September 30, 2023. The income primarily resulted from the reversal of previously recognized expenses related to forfeited employee stock options, following the termination of an executive officer in fiscal year 2023.
Current report
We did not recognize any stock-based compensation expenses for the nine month period ended September 30, 2024, compared to an income of $440,000 for the nine month period ended September 30, 2023. The income primarily resulted from the reversal of previously recognized expenses related to forfeited employee stock options, following the termination of an executive officer in fiscal year 2023.
Current report
General and administrative expenses for the nine month period ended September 30, 2024 decreased by 32% to $4,323,000 compared to $6,314,000 for the nine month period ended September 30, 2023. This decrease was mainly due to the reversal of previously recognized expenses following the resignation of certain executive officers.
Current report
Financial Income (Loss), Net
Current report
Net financial income decreased by 14% to $3,902,000 for the nine month period ended September 30, 2024, compared to $4,510,000 for the nine month period ended September 30, 2023. The decrease was mainly due to the lower interest income on deposits.
Current report
On September 4, 2024, we entered into a loan agreement, or the Profit Sharing Loan Agreement, with Rabi Binyamin 4 Tama 38 Ltd., or the Borrower, to finance a real estate project, or the Project. According to the terms of the Profit Sharing Loan Agreement, we agreed to loan NIS 5.5 million ($1,523), or the Loan Principal, to the Borrower. NIS 4.7 million ($1,307) was loaned upon signing the Profit Sharing Loan Agreement and the remaining NIS 0.8 million ($216) will be loaned upon certain milestones which are expected to occur in the first half of 2025. Upon completion of the Project, the we are entitled to receive the Loan Principal and the greater of: (i) 20% annual interest of the Loan Principal and (ii) 40% of the Project profits.
Removed paragraphs (7)
Previous report
Scilex Transaction
Previous report
On September 21, 2023, we completed a transaction, or the Transaction, with Scilex Holding Company, or Scilex, in exchange for certain equity securities of Scilex as follows:
Previous report
Comparison of six and three month periods ended June 30, 2024 and June 30, 2023
Previous report
We did not recognize any sales and marketing expenses for the six month period ended June 30, 2024 compared to expenses of $376,000 for the six period ended June 30, 2023. This was primarily due to the termination of the employment of an executive officer in fiscal year 2023. We did not recognize any stock-based compensation expenses for the six month period ended June 30, 2024, compared to expenses of $223,000 for the six month period ended June 30, 2023. This was primarily due to the termination of the employment of an executive officer.
Previous report
General and administrative expenses for the six month period ended June 30, 2024 decreased by 6% to $3,476,000 compared to $3,715,000 for the six month period ended June 30, 2023.
Previous report
Financial Income, Net
Previous report
Net financial income increased by 474% to $19,322,000 for the six month period ended June 30, 2024, compared to $4,075,000 for the six month period ended June 30, 2023. The increase was mainly due to the revaluation of the investments in Scilex.
Reworded paragraphs (26)
Previous wording
Joint Venture Agreement: On January 22, 2024, Oramed and its wholly-owned subsidiary, Oramed Ltd., entered into a joint venture agreement, or the JV Agreement, with HTIT Biotech and Technowl Limited, a wholly-owned indirect subsidiary of HTIT Biotech, or HTIT Sub, and together with HTIT Biotech, HTIT, pursuant to which, subject to the terms and conditions set forth in the JV Agreement, the parties will establish a joint venture, or the JV, based on Oramed’s oral drug delivery technology.
Current wording
Joint Venture Agreement: On January 22, 2024, Oramed and its wholly-owned subsidiary, Oramed Ltd., entered into a joint venture agreement, or the JV Agreement, with HTIT Biotech and Technowl Limited, a wholly-owned indirect subsidiary of HTIT Biotech and together with HTIT Biotech, HTIT, pursuant to which, subject to the terms and conditions set forth in the JV Agreement, the parties will establish a joint venture, or the JV, based on Oramed’s oral drug delivery technology.
Previous wording
The JV will focus on the development and worldwide commercialization of innovative products based on Oramed’s oral insulin and POD™ (Protein Oral Delivery) pipeline and HTIT’s manufacturing capabilities and technologies. The parties intend for the JV to use the protocol we recently submitted to the FDA to initiate a Phase 3 oral insulin trial in the United States.
Current wording
The JV will focus on the development and worldwide commercialization of innovative products based on Oramed’s oral insulin and POD™ (Protein Oral Delivery) pipeline and HTIT’s manufacturing capabilities and technologies. The JV expects to conduct a Phase 3 oral insulin clinical trial in the United States.
Previous wording
Oramed and HTIT will initially hold equal shares in the JV, with each owning 50% of the equity. The board of directors will initially consist of equal representation from HTIT and Oramed. HTIT will contribute to the JV $70 million in cash, while Oramed will contribute $20 million (comprised of $10 million in cash and $10 million in shares of Oramed common stock that will be subject to certain registration rights) and will transfer intellectual property related to its oral insulin and POD™ technology, as well as other assets in the Oramed pipeline. HTIT will have an option to invest additional funds into the JV up to an aggregate amount of $20 million, thereby increasing its equity holdings and board representation.
Current wording
Oramed and HTIT will initially hold equal shares in the JV, with each owning 50% of the equity. The board of directors will initially consist of equal representation from HTIT and Oramed. HTIT will contribute to the JV cash and credit to purchase materials, while Oramed will contribute cash and shares of Oramed common stock (that will be subject to certain registration rights) and will transfer intellectual property related to its oral insulin and POD™ technology, as well as other assets in the Oramed pipeline.
Previous wording
On October 7, 2023, the State of Israel was attacked by and subsequently declared war on Hamas. Israel has been in an ongoing state of war with Hamas since that time. Following the attack by Hamas, Hezbollah has also launched attacks against Israel and Israel has been responding to these attacks with targeted air strikes. It is possible that other terrorist organizations, including Palestinian military organizations in the West Bank, as well as other hostile countries, such as Iran, will join the hostilities. As of August 14, 2024, we believe that there is no immediate risk to our business operations related to these events. For further information, see “Item 1A. Risk Factors,” under “We are affected by the political, economic and military risks of having operations in Israel” in our Annual Report.
Current wording
On October 7, 2023, the State of Israel was attacked by and subsequently declared war on Hamas. Israel has been in an ongoing state of war with Hamas since that time. Following the attack by Hamas, Hezbollah has also launched attacks against Israel and Israel has been responding to these attacks with targeted air strikes. It is possible that other terrorist organizations, including Palestinian military organizations in the West Bank, as well as other hostile countries, will join the hostilities. As of November 7, 2024, we believe that there is no immediate risk to our business operations related to these events. For further information, see “Item 1A. Risk Factors,” under “We are affected by the political, economic and military risks of having operations in Israel” in our Annual Report.
Previous wording
The following table summarizes certain statements of operations data of the Company for the six and three month periods ended June 30, 2024 and June 30, 2023 (in thousands of dollars except share and per share data):
Current wording
The following table summarizes certain statements of operations data of the Company for the nine and three month periods ended September 30, 2024 and September 30, 2023 (in thousands of dollars except share and per share data):
Previous wording
Revenues consist of proceeds related to the Amended and Restated Technology License Agreement, dated December 21, 2015, between the Company and HTIT, or as further amended by the parties on June 3, 2016 and July 24, 2016, 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.
Current wording
Revenues consist of proceeds related to the Amended and Restated Technology License Agreement, dated December 21, 2015, between us and HTIT, or as further amended by the parties on June 3, 2016 and July 24, 2016, 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.
Previous wording
There were no revenues for the six month period ended June 30, 2024 while revenues were $1,340,000 for the six month period ended June 30, 2023. The decrease was due to recognition of revenues until the product submission date by HTIT of June 2023.
Current wording
There were no revenues for the nine month period ended September 30, 2024 while revenues were $1,340,000 for the nine month period ended September 30, 2023. The decrease was due to recognition of revenues until the product submission date by HTIT of June 2023.
Previous wording
Research and development expenses for the six month period ended June 30, 2024 decreased by 58% to $2,621,000, compared to $6,248,000 for the six month period ended June 30, 2023. The decrease was mainly due to lower expenses related to the Phase 3 trials that were terminated and was partially offset by higher stock-based compensation expenses.
Current wording
Research and development expenses for the nine month period ended September 30, 2024 decreased by 33% to $4,863,000, compared to $7,205,000 for the nine month period ended September 30, 2023. The decrease was mainly due to lower expenses related to the Phase 3 trials that were terminated and was partially offset by higher stock-based compensation expenses.
Previous wording
In the six month periods ended June 30, 2024 and June 30, 2023, we did not recognize any research and development grants. As of June 30, 2024, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $59,000.
Current wording
In the nine month periods ended September 30, 2024 and September 30, 2023, we did not receive any research and development grants. As of September 30, 2024, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $59,000.
Previous wording
We did not recognize any sales and marketing expenses for the three month period ended June 30, 2024 compared to $192,000 for the three month period ended June 30, 2023. This was primarily due to the termination of the employment of an executive officer in fiscal year 2023. We did not recognize any stock-based compensation expenses for the three month period ended June 30, 2024, compared to expenses of $136,000 for the three month period ended June 30, 2023. This was primarily due to the termination of the employment of an executive officer.
Current wording
We did not recognize any sales and marketing expenses for the three month periods ended September 30, 2024, compared to an income of $663,000 for the three month period ended September 30, 2023. The income primarily resulted from the reversal of previously recognized expenses related to forfeited employee stock options, following the termination of an executive officer in fiscal year 2023.
Previous wording
General and administrative expenses for the three month period ended June 30, 2024 decreased by 31% to $1,693,000 compared to $2,452,000 for the three month period ended June 30, 2023. This decrease was mainly due to decreases in stock-based compensation.
Current wording
General and administrative expenses for the three month period ended September 30, 2024 decreased by 67% to $847,000 compared to $2,599,000 for the three month period ended September 30, 2023. This decrease was mainly due to the reversal of previously recognized expenses following the resignation of an executive officer.
Previous wording
Interest expenses were $853,000 for the six month period ended June 30, 2024, while there were no interest expenses for the six month period ended June 30, 2023. The increase was mainly due to interest on the Short-Term Borrowings (as defined below).
Current wording
Interest expenses were $853,000 for the nine month period ended September 30, 2024, compared to $826,000 for the nine month period ended September 30, 2023. The increase was mainly due to interest on the Short-Term Borrowings (as defined below).
Previous wording
Interest expenses were $261,000 for the three month period ended June 30, 2024, while there were no interest expenses for the three month period ended June 30, 2023. The increase was mainly due to interest on the Short-Term Borrowings (as defined below).
Current wording
There were no interest expenses for the three month period ended September 30, 2024, compared to interest expenses of $826,000 for the three month period ended September 30, 2023, since the Short-Term Borrowings (as defined below) received from Discount Bank Ltd. were terminated during the second quarter of 2024 (see below).
Previous wording
Net financial income increased by 574% to $14,234 for the three month period ended June 30, 2024, compared to $2,478,000 for the three month period ended June 30, 2023. The increase was mainly due to the revaluation of the investments in Scilex.
Current wording
Net financial loss was $15,420,000 for the three month period ended September 30, 2024, compared to $435,000 net financial income for the three month period ended September 30, 2023. The change was mainly due to the revaluation of the investments in Scilex.
Previous wording
During the six and three month period ended June 30, 2024, we recognized tax expenses totaling $1,634,000. The tax expenses are primarily attributable to the Transaction. The provision for income taxes in the interim period is determined using an estimated annual effective tax rate (taking into account utilization of carryforward tax losses of Oramed Pharmaceuticals Inc).
Current wording
During the nine and three month periods ended September 30, 2024, we recognized tax expenses totaling $2,767,000 and $1,133,000, respectively. The tax expenses are primarily attributable to the 2023 Scilex Transaction. The provision for income taxes in the interim period is determined using an estimated annual effective tax rate (taking into account utilization of our carryforward tax losses).
Previous wording
During the six month period ended June 30, 2023, we did not recognize any tax expenses.
Current wording
During the three and nine month periods ended September 30, 2023, we did not recognize any tax expenses.
Previous wording
From inception through June 30, 2024, we have incurred losses in an aggregate amount of $146,808,000. During that period and through June 30, 2024, 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 $255,384,000, net of transaction costs. During that period, we also received cash consideration of $28,001,000 from the exercise of warrants and options. We expect to seek additional financing through similar sources in the future, as needed. As of June 30, 2024, we had $84,753,000 of available cash and $1,778,000 of short-term bank deposits.
Current wording
From inception through September 30, 2024, we have incurred losses in an aggregate amount of $166,427,000. During that period and through September 30, 2024, 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 $255,384,000, net of transaction costs. During that period, we also received cash consideration of $28,001,000 from the exercise of warrants and options. We expect to seek additional financing through similar sources in the future, as needed. As of September 30, 2024, we had $42,104,000 of available cash and $42,741,000 of short-term bank deposits.
Previous wording
From inception through June 30, 2024, we have not generated significant revenues from our operations. Following the termination of the ORA-D-013-1 and ORA-D-013-2 Phase 3 trials, the Company’s research and development activities have been significantly reduced while it conducts a strategic review process. As a result, the Company is currently incurring lower research and development and sales and marketing expenses.
Current wording
From inception through September 30, 2024, we have not generated significant revenues from our operations. Following the termination of the ORA-D-013-1 and ORA-D-013-2 Phase 3 trials, our research and development activities have been significantly reduced while it conducts a strategic review process. However, in the three month period ended September 30, 2024 we increased the research and development activities that related to the new Phase 3 clinical trial.
Previous wording
On August 8, 2023, we borrowed an aggregate of $99,550,000 pursuant to loan agreements from Israel Discount Bank Ltd., or the Short-Term Borrowings. The Short-Term Borrowings mature on dates ranging from August 11, 2023 to May 24, 2024, bear interest ranging from 6.66% to 7.38%, are secured by certificates of deposits issued by Israel Discount Bank Ltd. having an aggregate face amount of $99,550,000. The net proceeds of the Short-Term Borrowings were used to fund the Note. The Short-Term Borrowings are paid in one payment of principal and interest at each respective maturity. As of June 30, 2024, we repaid the entire Short-Term Borrowings amount.
Current wording
On August 8, 2023, we borrowed an aggregate of $99,550,000 pursuant to Loan agreements from Israel Discount Bank Ltd., or the Short-Term Borrowings. The Short-Term Borrowings matured on dates ranging from August 11, 2023 to May 24, 2024, bore interest ranging from 6.66% to 7.38%, were secured by certificates of deposits issued by Israel Discount Bank Ltd. having an aggregate face amount of $99,550,000. The net proceeds of the Short-Term Borrowings were used to fund the Tranche A Note. The Short-Term Borrowings were paid in one payment of principal and interest at each respective maturity. As of September 30, 2024, we repaid the entire Short-Term Borrowings amount.
Previous wording
As of June 30, 2024, our total current assets were $153,270,000 and our total current liabilities were $3,733,000. On June 30, 2024, we had a working capital surplus of $149,537,000 and an accumulated loss of $146,808,000. As of December 31, 2023, our total current assets were $162,584,000 and our total current liabilities were $53,214,000. On December 31, 2023, we had a working capital surplus of $109,370,000 and an accumulated loss of $157,556,000. The increase in working capital from December 31, 2023 to June 30, 2024 was mainly due to an increase in cash and cash equivalents and in investments at fair value, together with a decrease in Short-term borrowings partially offset by a decrease in short-term deposits.
Current wording
As of September 30, 2024, our total current assets were $142,774,000 and our total current liabilities were $5,274,000. On September 30, 2024, we had a working capital surplus of $137,500,000 and an accumulated loss of $166,427,000. As of December 31, 2023, our total current assets were $162,584,000 and our total current liabilities were $53,214,000. On December 31, 2023, we had a working capital surplus of $109,370,000 and an accumulated loss of $157,556,000. The increase in working capital from December 31, 2023 to September 30, 2024 was mainly due to an increase in cash and cash equivalents and in investments at fair value, together with a decrease in short-term borrowings partially offset by a decrease in short-term deposits.
Previous wording
During the six month period ended June 30, 2024, cash and cash equivalents increased to $84,753,000, from $9,055,000 as of December 31, 2023. The increase was mainly due to the reasons described below.
Current wording
During the nine month period ended September 30, 2024, cash and cash equivalents increased to $42,104,000, from $9,055,000 as of December 31, 2023. The increase was mainly due to the reasons described below.
Previous wording
Operating activities provided cash of $600,000 in the six month period ended June 30, 2024, compared to $8,183,000 used in the six month period ended June 30, 2023. Cash provided in operating activities primarily consisted of interest received from short-term deposits and an increase in accounts payable, accrued expenses and related parties, offset by research and development, general and administrative expenses.
Current wording
Operating activities used cash of $6,500,000 in the nine month period ended September 30, 2024, compared to $8,877,000 used in the nine month period ended September 30, 2023. Cash used in operating activities primarily consisted research and development, general and administrative expenses, partially offset by interest received from short-term deposits, an increase in accounts payable and accrued expenses and stock based compensation.
Previous wording
Investing activities provided cash of $124,653,000 in the six month period ended June 30, 2024, compared to used cash of $27,913,000 in the six month period ended June 30, 2023. Cash provided by investing activities in the six month period ended June 30, 2024 consisted primarily of proceeds from short-term deposits and proceeds from long-term investments. Cash used by investing activities in the six month period ended June 30, 2023 consisted primarily of the purchase of short-term deposits, partially offset by proceeds from short term investing activities.
Current wording
Investing activities provided cash of $90,393,000 in the nine month period ended September 30, 2024, compared to used cash of $103,035,000 in the nine month period ended September 30, 2023. Cash provided by investing activities in the nine month period ended September 30, 2024 consisted primarily of proceeds from short-term deposits and proceeds from long-term investments. Cash used by investing activities in the nine month period ended September 30, 2023 consisted primarily of the purchase of short-term deposits, partially offset by proceeds from short-term investing activities.
Previous wording
Financing activities used cash of $49,550,000 in the six month period ended June 30, 2024, compared to cash of $2,430,000 provided in the six month period ended June 30, 2023. Cash used by financing activities in the six month period ended June 30, 2024, consisted primarily of repayments of the Short-Term Borrowings. Cash provided by financing activities in the six month period ended June 30, 2023, consisted primarily of proceeds from the issuance of our common stock.
Current wording
Financing activities used cash of $50,842,000 in the nine month period ended September 30, 2024, compared to cash of $76,978,000 provided in the nine month period ended September 30, 2023. Cash used by financing activities in the nine month period ended September 30, 2024, consisted primarily of repayments of the Short-Term Borrowings and repurchases of our shares. Cash provided by financing activities in the nine month period ended September 30, 2023, consisted primarily of proceeds from the issuance of our common stock.
Previous wording
On March 18, 2024, the Company entered into an at the market offering agreement, or the ATM Agreement, with Rodman & Renshaw LLC and StockBlock Securities LLC, as agents, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $75,000,000 through a sales agent, subject to certain terms and conditions. The ATM is not currently active since we do not have an effective shelf registration statement covering the shares of common stock issuable thereunder. As of June 30, 2024 and through August 14, 2024, no shares were issued under the ATM Agreement.
Current wording
On March 18, 2024, we entered into an at the market offering agreement, or the ATM Agreement, with Rodman & Renshaw LLC and StockBlock Securities LLC, as agents, pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $75,000,000 through a sales agent, subject to certain terms and conditions. The ATM is not currently active since we do not have an effective shelf registration statement covering the shares of common stock issuable thereunder. As of September 30, 2024 and through November 7, 2024, no shares were issued under the ATM Agreement.
Previous wording
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.
Current wording
Following the results of the Phase 3 trials, and the new Phase 3 clinical trial for our oral insulin capsule candidate, ORMD-0801 and the current strategic review initiated by us, our obligations may change.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
There were no revenues for the three month periods ended September 30, 2024 and 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
There were no revenues for the three month period ended June 30, 2024 while revenues were $674,000 for the three month period ended June 30, 2023. The decrease was due to recognition of revenues until the product submission date by HTIT of June 2023.
Previous report — wording carried elsewhere
Research and development expenses for the three month period ended June 30, 2024 decreased by 21% to $1,442,000, compared to $1,821,000 for the three month period ended June 30, 2023. The decrease was mainly due to lower expenses related to the Phase 3 trials that were terminated.