Oramed Pharmaceuticals Inc . (NASDAQ:ORMP), a $95 million market cap pharmaceutical company currently trading at $2.35, has received a significant payment from Scilex Holding Company, marking progress in their financial agreements. On Sunday, December 13, 2024, Oramed confirmed the receipt of approximately $13.2 million from Scilex.
This payment was applied towards a $15 million principal payment installment due to Oramed by Scilex on December 21, 2024. With this latest transaction, the total repaid or refinanced amount of the original principal under the Tranche A Note has reached $94.2 million.
The remaining principal amounts owed by Scilex to Oramed now stand at $7.675 million under the Tranche A Note and $25 million under the Tranche B Notes. According to InvestingPro data, Oramed maintains a strong financial position with more cash than debt on its balance sheet and an impressive current ratio of 27.08, indicating robust liquidity.
The initial agreement, which took place on September 21, 2023, involved Scilex assuming certain obligations of Sorrento Therapeutics (OTC:SRNE), Inc., in return for a Senior Secured Promissory Note due 18 months from the date of issuance, and warrants to purchase shares of Scilex common stock.
Subsequently, on October 7, 2024, Oramed and institutional investors entered into a Securities Purchase Agreement with Scilex to refinance a portion of the Tranche A Note and settle other debts of Scilex. In this arrangement, Scilex issued new Tranche B Notes and warrants to Oramed and the investors.
As part of the deal, Oramed exchanged and reduced the principal outstanding balance under the Tranche A Note by $22.5 million. An Agreement Among Holders was also established, prioritizing the payment of obligations under the Tranche A Note before addressing those of the Tranche B Notes.
Furthermore, Oramed exchanged and reduced an additional $2.5 million of the principal balance under the Tranche A Note in exchange for certain rights under a royalty purchase agreement with Scilex. This strategic financial management reflects Oramed's ongoing efforts to secure and optimize its investments.
The details of these financial transactions are based on a press release statement and can be referenced in Oramed's SEC filings.
InvestingPro analysis suggests the stock is currently undervalued, with additional insights available through their comprehensive financial health assessment, which rates Oramed as "GREAT" with a score of 3.03. Discover more exclusive insights and 8 additional ProTips by visiting InvestingPro.
In other recent news, Oramed Pharmaceuticals Inc. has made significant strides in its financial and clinical operations. The company received an additional $1 million payment related to a Senior Secured Promissory Note, known as the Tranche A Note, reducing the outstanding balance to $80,200,000. This payment is part of an ongoing agreement with Scilex Holding Company, which also issued the Tranche A Note to Oramed.
Oramed also entered into a significant $11.5 million agreement with clinical research organization InClin, Inc. for the provision of services essential to a Phase 3 clinical trial. The trial aims to evaluate the safety and effectiveness of ORMD-0801, Oramed's investigational oral insulin capsule.
The company has also made a strategic $2 million payment to Scilex Holding Company, divided between an amortization payment due in 2025 and the purchase of warrants from Scilex. This payment is in line with the terms of an agreement between the two companies.
H.C. Wainwright maintains a Neutral rating for Oramed as the review process by China's National Medical (TASE:PMCN) Products Administration for Oramed's oral insulin candidate continues. Furthermore, Oramed has launched a stock buyback program, authorizing the repurchase of up to $20 million of its common stock. These are the recent developments surrounding Oramed Pharmaceuticals Inc.
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