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What changed in ORAMED PHARMACEUTICALS INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ORAMED PHARMACEUTICALS INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+289 added−242 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-06)

Top changes in ORAMED PHARMACEUTICALS INC.'s 2023 10-K

289 paragraphs added · 242 removed · 182 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

55 edited+49 added−15 removed72 unchanged
Biggest changeClinical testing, known as clinical trials or clinical studies, is either conducted internally by life science, pharmaceutical or biotechnology companies or is conducted on behalf of these companies by CROs. The process of conducting clinical trials is highly regulated by the FDA, as well as by other governmental and professional bodies.
Biggest changeThe FDA requires that pharmaceutical and certain other therapeutic products undergo significant clinical experimentation and clinical testing prior to their marketing or introduction to the general public. Clinical testing, known as clinical trials or clinical studies, is either conducted internally by life science, pharmaceutical or biotechnology companies or is conducted on behalf of these companies by CROs.
He organized the first Congress on Metabesity in London in October 2017, followed by annual conferences. In 2020, Dr. Fleming founded the non-profit Kitalys Institute as a means of producing Metabesity conferences and advancing interventions of any kind that can improve health and healthspan. 8 Professor Avram Hershko, MD, PhD , joined the Oramed Scientific Advisory Board in July 2008.
He organized the first Congress on Metabesity in London in October 2017, followed by annual conferences. In 2020, Dr. Fleming founded the non-profit Kitalys Institute as a means of producing Metabesity conferences and advancing interventions of any kind that can improve health and healthspan. Professor Avram Hershko, MD, PhD , joined the Oramed Scientific Advisory Board in July 2008.
From 1993 to 2015, he was Chairman of the National Institute of Health (NIDDK)-sponsored Diabetes Prevention Trial–- Type 1 (DPT-1) and its successor Type 1 Diabetes Trial Net, a nationwide and global network conducting clinical trials to prevent T1D. 9 Dr. Anne Peters, MD , joined the Oramed Scientific Advisory Board in June 2022. Dr.
From 1993 to 2015, he was Chairman of the National Institute of Health (NIDDK)-sponsored Diabetes Prevention Trial–- Type 1 (DPT-1) and its successor Type 1 Diabetes Trial Net, a nationwide and global network conducting clinical trials to prevent T1D. Dr. Anne Peters, MD , joined the Oramed Scientific Advisory Board in June 2022. Dr.
During the approval process, the sponsor’s manufacturing facilities will be audited in order to assess Good Manufacturing Practice compliance. 6 The drug approval process is time-consuming, involves substantial expenditures of resources, and depends upon a number of factors, including the severity of the illness in question, the availability of alternative treatments, and the risks and benefits demonstrated in the clinical trials.
During the approval process, the sponsor’s manufacturing facilities will be audited in order to assess Good Manufacturing Practice compliance. The drug approval process is time-consuming, involves substantial expenditures of resources, and depends upon a number of factors, including the severity of the illness in question, the availability of alternative treatments, and the risks and benefits demonstrated in the clinical trials.
We will have to compete against other biotechnology and pharmaceutical companies with greater market recognition and greater financial, marketing and other resources. 7 Our competition will be determined in part by the potential indications for which our technology is developed and ultimately approved by regulatory authorities.
We will have to compete against other biotechnology and pharmaceutical companies with greater market recognition and greater financial, marketing and other resources. Our competition will be determined in part by the potential indications for which our technology is developed and ultimately approved by regulatory authorities.
In addition, Dr. Skyler is Deputy Director of Clinical Research and Academic Programs at the Diabetes Research Institute, and an Adjunct Professor of Pediatrics at the Barbara Davis Center for Childhood Diabetes at the University of Colorado in Denver. Dr. Skyler’s research focuses on the clinical aspects of diabetes, specifically the conduct of randomized controlled clinical trials.
Skyler is Deputy Director of Clinical Research and Academic Programs at the Diabetes Research Institute, and an Adjunct Professor of Pediatrics at the Barbara Davis Center for Childhood Diabetes at the University of Colorado in Denver. Dr. Skyler’s research focuses on the clinical aspects of diabetes, specifically the conduct of randomized controlled clinical trials.
Eldor is a recognized expert, with over 50 peer reviewed papers and book chapters, and has been a guest speaker at numerous international forums. Professor Ele Ferrannini , MD , joined the Oramed Scientific Advisory Board in February 2007.
Eldor is a recognized expert, with over 50 peer reviewed papers and book chapters, and has been a guest speaker at numerous international forums. 9 Professor Ele Ferrannini , MD , joined the Oramed Scientific Advisory Board in February 2007.
There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors. 3 Out-Licensed Technology Entera Bio In June 2010, our wholly-owned subsidiary, Oramed Ltd., entered into a joint venture agreement with DNA GROUP (T.R.) Ltd.
There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors. 5 Out-Licensed Technology Entera Bio In June 2010, our wholly-owned subsidiary, Oramed Ltd., entered into a joint venture agreement with DNA GROUP (T.R.) Ltd.
The protocol sets forth, among other things, the following: ● Who must be recruited as qualified participants, ● How often to administer the drug or product, ● What tests to perform on the participants, and ● What dosage of the drug or amount of the product to give to the participants. 5 Institutional Review Board .
The protocol sets forth, among other things, the following: ● Who must be recruited as qualified participants, ● How often to administer the drug or product, ● What tests to perform on the participants, and ● What dosage of the drug or amount of the product to give to the participants. Institutional Review Board .
We maintain a proactive intellectual property strategy, which includes patent filings in multiple jurisdictions, including the United States and other commercially significant markets. We hold 37 patent applications currently pending, with respect to various compositions, methods of production and oral administration of proteins and exenatide. Expiration dates for pending patents, if granted, will fall between 2026 and 2039.
We maintain a proactive intellectual property strategy, which includes patent filings in multiple jurisdictions, including the United States and other commercially significant markets. We hold 38 patent applications currently pending, with respect to various compositions, methods of production and oral administration of proteins and exenatide. Expiration dates for pending patents, if granted, will fall between 2026 and 2039.
She was a recipient of the ADA Outstanding Physician Clinician Award, the Bernardo Houssay Award from the National Minority Quality Forum and received a 2021 Endocrine Society Laureate Award for Public Service. Employees We believe it is imperative to attract and retain top talent for all positions in the Company.
She was a recipient of the ADA Outstanding Physician Clinician Award, the Bernardo Houssay Award from the National Minority Quality Forum and received an Endocrine Society Laureate Award for Public Service. Employees We believe it is imperative to attract and retain top talent for all positions in the Company.
As of December 31, 2022, Entera had not paid any royalties to Oramed Ltd. On December 11, 2018, Entera announced that it had entered into a research collaboration and license agreement with Amgen, Inc., or Amgen.
As of December 31, 2023, Entera had not paid any royalties to Oramed Ltd. On December 11, 2018, Entera announced that it had entered into a research collaboration and license agreement with Amgen, Inc., or Amgen.
The HTIT License Agreement shall remain in effect until the expiration of the royalty term. The HTIT License Agreement contains customary termination provisions. Through December 31, 2022, we received aggregate milestone payments of $20.5 million out of the aggregate amount of $37.5 million.
The HTIT License Agreement shall remain in effect until the expiration of the royalty term. The HTIT License Agreement contains customary termination provisions. Through December 31, 2023, we received aggregate milestone payments of $20.5 million out of the aggregate amount of $37.5 million.
The following corporate governance documents are also posted on our website: Code of Ethics, Whistleblowing Policy and the charters for each of the Audit Committee, Compensation Committee and Nominating Committee of our Board. 10
The following corporate governance documents are also posted on our website: Code of Ethics, Whistleblowing Policy and the charters for each of the Audit Committee, Compensation Committee and Nominating Committee of our Board. 11
We hold 112 patents, twenty of which were issued during the fiscal year ended December 31, 2022, including patents issued by the United States, Swiss, German, French, U.K., Italian, Netherlands, Swedish, Spanish, Australian, Israeli, Japanese, New Zealand, South African, Russian, Canadian, Hong Kong, Chinese, European and Indian patent offices that cover a part of our technology, which allows for the oral delivery of proteins; patents issued by the Australian, Canadian, European, Austrian, Belgian, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norwegian, Spanish, Swedish, Swiss, U.K., Israeli, New Zealand, South African, Russian, Brazilian and Japanese patent offices that cover part of our technology for the oral delivery of exenatide; and patents issued by the European, Austrian, Belgian, Denmark, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norway, Spanish, Swedish, Swiss, U.K. and Japanese patent offices for treating diabetes.
We hold 117 patents, eight of which were issued during the fiscal year ended December 31, 2023, including patents issued by the United States, Swiss, German, French, U.K., Italian, Netherlands, Swedish, Spanish, Australian, Israeli, Japanese, New Zealand, South African, Russian, Canadian, Hong Kong, Chinese, European and Indian patent offices that cover a part of our technology, which allows for the oral delivery of proteins; patents issued by the Australian, Canadian, European, Austrian, Belgian, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norwegian, Spanish, Swedish, Swiss, U.K., Israeli, New Zealand, South African, Russian, Brazilian and Japanese patent offices that cover part of our technology for the oral delivery of exenatide; and patents issued by the European, Austrian, Belgian, Denmark, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norway, Spanish, Swedish, Swiss, U.K. and Japanese patent offices for treating diabetes.
On January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints.
On January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints.
As of December 31, 2022, we have contracted with seventeen individuals for employment or consulting arrangements, including employees of Oravax. Of our staff, six are senior management, four are engaged in research and development work, and the remaining seven are involved in corporate and administration work. We provide competitive compensation, health and retirement programs for our employees.
As of December 31, 2023, we have contracted with fifteen individuals for employment or consulting arrangements, including employees of Oravax. Of our staff, five are senior management, four are engaged in research and development work, and the remaining six are involved in corporate and administration work. We provide competitive compensation, health and retirement programs for our employees.
In addition, Medicox will pay Oramed up to $15 million in developmental milestones, $2 million of which have already been received by Oramed to date, and up to 15% royalties on gross sales. Medicox will also be responsible for gaining regulatory approval in the Republic of Korea.
In addition, Medicox will pay Oramed up to $15 million in developmental milestones, $2 million of which were received by Oramed in 2022, and up to 15% royalties on gross sales. Medicox will also be responsible for gaining regulatory approval in the Republic of Korea.
HTIT On November 30, 2015, we entered into a Technology License Agreement, or TLA, with Hefei Tianhui Incubator of Technologies Co., Ltd., or 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, or the HTIT License Agreement.
HTIT On November 30, 2015, we entered into a Technology License Agreement, or 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, or the HTIT License Agreement.
Phase 1 trials involve testing a drug or product on a limited number of healthy or patient participants, typically 24 to 100 people at a time. Phase 1 trials determine a product’s basic safety and how the product is absorbed by, and eliminated from, the body. This phase lasts an average of six months to a year. Phase 2 .
Phase 1 trials involve testing a drug or product on a limited number of healthy or patient participants, typically 24 to 100 people at a time. Phase 1 trials determine a product’s basic safety and how the product is absorbed by, and eliminated from, the body.
These results 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. Cohort B completed dosing on January 5, 2023 and data is expected in the first half of 2023.
These results included significant antibody response (2-6 fold over baseline) as measured by multiple markers of immune response to virus like particle vaccine antigens observed in the majority of the patients dosed, and no safety issues were observed, including mild symptoms. Cohort B completed dosing in January 2023.
In addition, we agreed to buy and Oravax agreed to issue to us 1,890,000 shares of common stock of Oravax, representing 63% of the common stock of Oravax for the aggregate amount of $1.5 million. Akers contributed $1.5 million in cash to Oravax and a license agreement to the Oravax product.
In addition, we agreed to buy and Oravax agreed to issue to us 1,890,000 shares of common stock of Oravax, representing 63% of the common stock of Oravax for the aggregate amount of $1.5 million.
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.
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.
In addition to being an investigator for more than 40 research studies, Dr. Peters has published over 200 articles, has written four books, and has given more than 500 lectures locally, nationally, and internationally. She has been on multiple guideline writing committees for the treatment of both type 1 and type 2 diabetes.
Peters has published over 200 articles, has written four books, and has given more than 500 lectures locally, nationally, and internationally. She has been on multiple guideline writing committees for the treatment of both type 1 and type 2 diabetes.
Although alternative sources of supply for these materials are generally available, we could incur significant costs and disruptions if we need to change suppliers.
We generally depend upon a limited number of suppliers for the raw materials. Although alternative sources of supply for these materials are generally available, we could incur significant costs and disruptions if we need to change suppliers.
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.
NASH : On September 13, 2022, we reported positive top line results from a double blind, placebo controlled clinical trial of ORMD-0801 for the treatment of non-alcoholic steatohepatitis, or NASH, in T2D, 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.
She previously directed the clinical diabetes programs at Cedars-Sinai Medical Center and UCLA in California. Her research has focused on testing new approaches for diagnosing and treating diabetes and developing systems of care to improve outcomes in diabetic populations. Dr. Peters is the chair of the Endocrine Society Committee on Diabetes Devices and is on the EASD/ADA Technology Safety Committee.
She previously directed the clinical diabetes programs at Cedars-Sinai Medical Center and UCLA in California. Her research has focused on testing new approaches for diagnosing and treating diabetes and developing systems of care to improve outcomes in diabetic under-resourced populations. Dr.
Jay Skyler, MD, MCAP, FRCP , joined the Oramed Scientific Advisory Board in January 2020. Dr. Skyler is Professor of Medicine, Pediatrics and Psychology in the Division of Endocrinology, Diabetes and Metabolism, Department of Medicine, University of Miami Leonard M. Miller School of Medicine. He previously held the position of Director of the Division of Endocrinology, Diabetes and Metabolism.
Skyler is Professor of Medicine, Pediatrics and Psychology in the Division of Endocrinology, Diabetes and Metabolism, Department of Medicine, University of Miami Leonard M. Miller School of Medicine. He previously held the position of Director of the Division of Endocrinology, Diabetes and Metabolism. In addition, Dr.
According to the agreement, Sanofi-Aventis supplies Oramed Ltd. with specified quantities of recombinant human insulin to be used for clinical trials. We have purchased, pursuant to separate agreements with third parties, the raw materials required for the manufacturing of our oral capsule. We generally depend upon a limited number of suppliers for the raw materials.
In July 2010, Oramed Ltd. entered into the Manufacturing and Supply Agreement with Sanofi-Aventis Deutschland GMBH, or Sanofi-Aventis. According to the agreement, Sanofi-Aventis supplies Oramed Ltd. with specified quantities of recombinant human insulin to be used for clinical trials. We have purchased, pursuant to separate agreements with third parties, the raw materials required for the manufacturing of our oral capsule.
We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. Our policy is to require our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, our Board, technical review board and other advisors, to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.
Our policy is to require our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, Board of Directors, or our Board, technical review board and other advisors, to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.
Rosenstock has been the author or co-author of 360 peer-reviewed manuscripts ( H-index 119 ) and several hundreds of scientific abstracts. He has also contributed to 13 book chapters on various topics in the field of diabetes and is considered a key opinion leader in Type 2 Diabetes. Dr.
Rosenstock has been the author or co-author of 386 peer-reviewed manuscripts ( H-index 124 ) and several hundreds of scientific abstracts and he is considered a key opinion leader in Type 2 Diabetes.
According to the American Diabetes Association, or ADA, in the United States there were approximately 37.3 million people with diabetes, or 11.3% of the United States population in 2019. Diabetes is a leading cause of blindness, kidney failure, heart attack, stroke and amputation.
According to the American Diabetes Association, or ADA, in the United States there were approximately 37.3 million people with diabetes, or 11.3% of the United States population in 2019.
Phase 2 trials involve testing of no more than 300 participants at a time who may suffer from the targeted disease or condition. Phase 2 testing typically lasts an average of one to two years. In Phase 2, the drug is tested to determine its safety and effectiveness for treating a specific illness or condition.
This phase lasts an average of six months to a year. 7 Phase 2 . Phase 2 trials involve testing of no more than 300 participants at a time who may suffer from the targeted disease or condition. Phase 2 testing typically lasts an average of one to two years.
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.
On August 21, 2020, we received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA. We wholly disputed said claims and are planning to resolve any such claims as part of our discussions with HTIT.
ITEM 1. BUSINESS. Description of Business We are currently a pharmaceutical company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the oral delivery of therapeutic proteins.
ITEM 1. BUSINESS. Description of Business We are a pharmaceutical company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the oral delivery of therapeutic proteins. We have developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other proteins.
Phase 2b trials are conducted with patients defined to evaluate definite dose range and evaluate efficacy. If Phase 2 trials show that a new drug has an acceptable range of safety risks and probable effectiveness, a company will generally continue to review the substance in Phase 3 trials. Phase 3 .
If Phase 2 trials show that a new drug has an acceptable range of safety risks and probable effectiveness, a company will generally continue to review the substance in Phase 3 trials. Phase 3 . Phase 3 trials involve testing large numbers of participants, typically several hundred to several thousand persons.
See note 12 to our audited consolidated financial statements. 4 Medicox License On November 13, 2022, we entered into a distribution license agreement with Medicox Co., Ltd., or Medicox. an emerging biotech company with a consortium of proven partnerships in the Republic of Korea.
Akers Biosciences Inc. contributed $1.5 million in cash to Oravax and a license agreement to the Oravax product. 6 Medicox License On November 13, 2022, we entered into a distribution license agreement with Medicox Co., Ltd., or Medicox, an emerging biotech company with a consortium of proven partnerships in the Republic of Korea.
In order to obtain approval to market our drug portfolio, we need to go through a different regulatory process in each country in which we apply for such approval. In some cases, information gathered during the approval process in one country can be used as supporting information for the approval process in another country.
Government Regulation The Drug Development Process Regulatory requirements for the approval of new drugs vary from one country to another. In order to obtain approval to market our drug portfolio, we need to go through a different regulatory process in each country in which we apply for such approval.
To the extent that the license granted to Amgen results in net revenues as defined in the Patent Transfer Agreement, Oramed Ltd. will be entitled to the aforementioned royalties.
To the extent that the license granted to Amgen results in net revenues as defined in the Patent Transfer Agreement, Oramed Ltd. will be entitled to the aforementioned royalties. During the years ended December 31, 2023 and 2022, we did not sell any of DNA’s ordinary shares.
Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize products on their own or through joint ventures.
In addition, many biotechnology companies have formed collaborations with large, established companies to support research, development and commercialization of products that may be competitive with ours. Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize products on their own or through joint ventures.
The compliance with these and other laws, regulations and recommendations can be time-consuming and involve substantial costs. In addition, the extent of governmental regulation which might result from future legislation or administrative action cannot be accurately predicted and may have a material adverse effect on our business, financial condition, results of operations and prospects.
In addition, the extent of governmental regulation which might result from future legislation or administrative action cannot be accurately predicted and may have a material adverse effect on our business, financial condition, results of operations and prospects. 8 Competition Competition in the area of biomedical and pharmaceutical research and development is intense and significantly depends on scientific and technological factors.
Phase 3 trials involve testing large numbers of participants, typically several hundred to several thousand persons. The purpose is to verify effectiveness and long-term safety on a large scale. These trials generally last two to three years. Phase 3 trials are conducted at multiple locations or sites.
The purpose is to verify effectiveness and long-term safety on a large scale. These trials generally last two to three years. Phase 3 trials are conducted at multiple locations or sites. Like the other phases, Phase 3 requires the site to keep detailed records of data collected and procedures performed. Biological License Application .
Like the other phases, Phase 3 requires the site to keep detailed records of data collected and procedures performed. Biological License Application . The results of the clinical trials for a biological product are submitted to the FDA as part of a Biological License Application, or BLA.
The results of the clinical trials for a biological product are submitted to the FDA as part of a Biological License Application, or BLA.
Phase 2 testing also involves determining acceptable dosage levels of the drug. Phase 2 trials may be split into Phase 2a and Phase 2b sub-trials. Phase 2a trials may be conducted with patient volunteers and are exploratory (non-pivotal) trials, typically designed to evaluate clinical efficacy or biological activity.
Phase 2a trials may be conducted with patient volunteers and are exploratory (non-pivotal) trials, typically designed to evaluate clinical efficacy or biological activity. Phase 2b trials are conducted with patients defined to evaluate definite dose range and evaluate efficacy.
Oral Vaccine On March 18, 2021, we entered into 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.
We are currently evaluating our path forward for ORMD-0801 for NASH. 3 Oral Vaccine On March 18, 2021, we entered into a license agreement, or the Oravax License Agreement, with Oravax, a 63% owned joint venture to commercialize oral vaccines for COVID-19 and other novel coronaviruses based on Premas Biotech Pvt.
During the years ended December 31, 2022, 2021 and four month period ended December 2021, we did not sell any of DNA’s ordinary shares. As of December 31, 2022, we held approximately 1.4% of DNA’s outstanding ordinary shares and approximately 0.4% of Entera’s outstanding ordinary shares.
As of December 31, 2023, we held approximately 1.4% of DNA’s outstanding ordinary shares and approximately 0.4% of Entera’s outstanding ordinary shares.
The application contains, among other documents, what is known in the industry as a protocol. A protocol is the blueprint for each drug study.
Before commencing human clinical trials, the sponsor of a new drug or therapeutic product must submit an IND application to the FDA. The application contains, among other documents, what is known in the industry as a protocol. A protocol is the blueprint for each drug study.
On 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.
Ltd.’s proprietary vaccine technology involving a triple antigen virus like particle, or the Oravax product. In October 2022, Oravax reported positive preliminary Phase 1 data for Cohort A of a Phase 1 clinical trial, meeting primary or secondary endpoints of safety and immunogenicity.
We continue to assess the effect on our operations by monitoring the status of COVID-19. 2 Intellectual Property and Patents We own a portfolio of patents and patent applications covering our technologies, and we are aggressively protecting these technology developments on a worldwide basis.
Diabetes is a leading cause of blindness, kidney failure, heart attack, stroke and amputation. 4 Intellectual Property and Patents We own a portfolio of patents and patent applications covering our technologies, and we are aggressively protecting these technology developments on a worldwide basis.
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.
Based on this analysis, we are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA. We are additionally examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.
Competition Competition in the area of biomedical and pharmaceutical research and development is intense and significantly depends on scientific and technological factors. These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain regulatory approval for testing, manufacturing and marketing.
These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain regulatory approval for testing, manufacturing and marketing. Our competitors include major pharmaceutical, medical products, chemical and specialized biotechnology companies, many of which have financial, technical and marketing resources significantly greater than ours.
Below we describe the principal framework in which clinical trials are conducted, as well as describe a number of the parties involved in these trials. Protocols . Before commencing human clinical trials, the sponsor of a new drug or therapeutic product must submit an IND application to the FDA.
The process of conducting clinical trials is highly regulated by the FDA, as well as by other governmental and professional bodies. Below we describe the principal framework in which clinical trials are conducted, as well as describe a number of the parties involved in these trials. Protocols .
We plan to continue to conduct clinical trials to show the effectiveness of our technology. On January 11, 2023, we announced that our Phase 3 trial, or the ORA-D-013-1 Phase 3 trial, did not meet its primary and secondary endpoints. As a result, we terminated both ORA-D-013-1 and ORA-D-013-2 Phase 3 clinical trials.
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.
Raw Materials Our oral insulin capsule is currently manufactured by Fidelio Healthcare, a diversified European Contract Development and Manufacturing Organization (CDMO) in the pharmaceutical and healthcare industries. In July 2010, Oramed Ltd. entered into the Manufacturing and Supply Agreement with Sanofi-Aventis Deutschland GMBH, or Sanofi-Aventis.
Risk Factors,” under “We are affected by the political, economic and military risks of having operations in Israel.” Raw Materials Our oral insulin capsule for clinical trials was manufactured by Fidelio Healthcare, a diversified European Contract Development and Manufacturing Organization (CDMO) in the pharmaceutical and healthcare industries.
Additionally, she is a member of the JDRF Panel on Management of Exercise in type 1 Diabetes and a member of the ABIM Endocrinology Subspecialty Board. Dr. Peters has consulted for many entities, including the FDA, Optum Rx and CVS/Caremark to help guide the development and use of treatments for diabetes.
Peters has consulted for many entities, including the FDA, the Centers for Disease Control and Prevention and the National Institutes of Health to help guide the development and use of treatments for diabetes. In addition to being an investigator for more than 40 research studies, Dr.
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Through our research and development efforts, we have developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other 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.
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As a result, we terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. In 2023, we completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters, such as body mass index, or BMI, baseline HbA1c and age, responded well to oral insulin.
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NASH : In December 2020, we initiated a double blind, placebo controlled clinical trial of ORMD-0801 for the treatment of non-alcoholic steatohepatitis, or NASH, in T2D.
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Scilex Transaction On August 7, 2023, we entered into a Stock Purchase Agreement, as subsequently amended on August 9, 2023 and August 21, 2023, or the Sorrento SPA, with Sorrento Therapeutics, Inc., or Sorrento, to acquire certain equity securities of Scilex owned by Sorrento, or the Purchased Securities, for a purchase price of $105 million.
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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. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to its wholly-owned subsidiary, Oravax Medical Ltd.
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Sorrento and its affiliated debtor, Scintilla Pharmaceuticals, Inc., or Scintilla and together with Sorrento, the Debtors, are in Chapter 11 bankruptcy proceedings.
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For further details regarding the Oravax License Agreement, see note 12 to our audited consolidated financial statements. 1 In October 2021, Oravax’s oral virus-like particle, or VLP, COVID-19 vaccine received clearance from the South African Health Products Regulatory Authority (SAPHRA) to initiate a Phase 1 trial.
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On August 9, 2023, we entered into a Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement, or the Senior DIP Loan Agreement, with the Debtors in the principal amount of $100 million, which included a non-refundable closing fee of $450,000 paid in full out of the proceeds.
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On December 14, 2021, Oravax screened and enrolled the first participant in this Phase 1 clinical trial. The trial protocol was divided into two cohorts each comprised of 12 participants, with a 42-day safety waiting period between cohorts.
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This amount was subsequently drawn in full by the Debtors and was intended to be used by us as a credit for the consideration for the Purchased Securities, with an additional $5,000,000 in cash to be paid by us at closing. Thereafter, we and Sorrento continued discussions and negotiations relating to the sale contemplated under the Sorrento SPA.
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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.
Added
Securities Purchase Agreement On September 21, 2023, or the Closing Date, we entered into and consummated the transactions, or, collectively, the Transaction, contemplated by a Securities Purchase Agreement, or the Scilex SPA, with Scilex and Acquiom Agency Services LLC.
Removed
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.
Added
Pursuant to the Scilex SPA, in exchange for Scilex assuming Sorrento’s outstanding obligations under the Senior DIP Loan Agreement, or the DIP Assumption, and for the ability to credit the amounts assumed under the DIP Assumption in exchange for certain equity securities of Scilex owned by Sorrento, Scilex (i) issued to us (A) a Senior Secured Promissory Note due 18 months from the date of issuance in the principal amount of $101,875,000, or the Note, which includes accrued and unpaid interest of $875,000 under the Senior DIP Loan Agreement and $1,000,000 of fees added to the principal amount of the Note, (B) a warrant to purchase up to an aggregate of 4,500,000 shares of common stock of Scilex, par value $0.0001 per share, or the Scilex Common Stock, and containing certain restrictions on exercisability, or the Closing Penny Warrant, and (C) warrants to purchase up to an aggregate of 8,500,000 shares of Scilex Common Stock, or the Subsequent Penny Warrants, and, together with the Closing Penny Warrant, the Penny Warrants, each with an exercise price of $0.01 per share and each with certain restrictions on exercisability, and (ii) caused certain outstanding warrants to purchase up to an aggregate of 4,000,000 shares of Scilex Common Stock with an exercise price of $11.50 per share to be transferred to us, or the Transferred Warrants and together with the Penny Warrants, the Warrants.
Removed
Impact of COVID-19 We do not expect any material impact on our development timeline and our liquidity due to COVID-19. However, we experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally.
Added
In addition, on the Closing Date, Scilex reimbursed $1,910,000 of the Company’s Transaction expenses pursuant to the Scilex SPA. Pursuant to the terms of the Scilex SPA, Scilex agreed to certain restrictions on additional issuances of equity securities.
Removed
On the other hand, Oravax continues to develop its oral vaccine, the demand for which may be reduced if COVID-19 continues to abate.
Added
In connection with the Transaction, we and Sorrento mutually agreed to terminate the Sorrento SPA and to release all claims we and Sorrento may have against one another, and Scilex completed the acquisition of the Purchased Securities. 1 Senior Secured Promissory Note The Note matures on March 21, 2025 or upon an uncured event of default, subject to certain mandatory prepayments, and bears interest at a rate per annum equal to Term SOFR (as defined in the Note) plus 8.5% (subject to a Term SOFR floor of 4.0%), to be paid in-kind, by being capitalized and added to the principal amount of the Note on a monthly basis.
Removed
As part of a consulting agreement with a third party dated February 15, 2011, Oramed Ltd. 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.
Added
The Scilex SPA provides for principal payments of (i) $5 million on December 21, 2023, (ii) $15 million on March 21, 2024, and (iii) $20 million on each of June 21, 2024, September 21, 2024, and December 21, 2024, and for the entire remaining principal balance of the Note to be paid on March 21, 2025.
Removed
We are currently evaluating with HTIT a path forward to continue our collaboration, following the results of our ORA-D-013-1 Phase 3 trial.
Added
If the Note is not repaid in full on or prior to March 21, 2024, an exit fee equal to $3,056,250 shall be payable upon repayment of the Note in full.
Removed
Nadav Kidron, the Company’s President and Chief Executive Officer, was one of the former members of Cystron.
Added
The Note constitutes senior secured indebtedness of Scilex and is guaranteed by all existing or future formed, direct and indirect, domestic subsidiaries of Scilex and is secured by a first priority security interest in and liens on all of the assets of Scilex, subject to customary and mutually agreed permitted liens and except for certain specified exemptions.
Removed
We are currently evaluating with Medicox a path forward to continue our collaboration, following the results of our ORA-D-013-1 Phase 3 trial. Government Regulation The Drug Development Process Regulatory requirements for the approval of new drugs vary from one country to another.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe currently hold several pending patent applications in the United States, Canada, Brazil, Europe, India, Hong Kong, Japan and China for our technologies covering oral administration of insulin and other proteins and oral administration of exenatide and proteins and 112 patents issued by the United States, Swiss, German, French, U.K., Italian, Netherlands, Swedish, Spanish, Australian, Israeli, Japanese, New Zealand, South African, Russian, Canadian, Hong Kong, Chinese, European and Indian patent offices that cover a part of our technology, which allows for the oral delivery of proteins; patents issued by the Australian, Canadian, European, Austrian, Belgian, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norwegian, Spanish, Swedish, Swiss, U.K., Israeli, New Zealand, South African, Russian, Brazilian and Japanese patent offices that cover part of our technology for the oral delivery of exenatide; and patents issued by the European, Austrian, Belgian, Denmark, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norway, Spanish, Swedish, Swiss, U.K. and Japanese patent offices for treating diabetes.
Biggest changeWe currently hold several pending patent applications in the United States, Canada, Brazil, Europe, India, Hong Kong, Japan and China for our technologies covering oral administration of insulin and other proteins and oral administration of exenatide and proteins and 117 patents issued by the United States and various other countries’ patent offices that cover a part of our technology, which allows for the oral delivery of proteins; patents issued by various patent offices that cover part of our technology for the oral delivery of exenatide; and patents issued by patent offices for treating diabetes.
If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months. 12 We will need substantial additional capital in order to satisfy our business objectives.
If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months. We will need substantial additional capital in order to satisfy our business objectives.
For example, the rate of enrollment for our Phase 1 clinical trial for our oral COVID-19 vaccine in South Africa was slower than anticipated 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, and as a result we had to add an additional clinical site.
For example, the rate of enrollment for our Phase 1 clinical trial for our oral COVID-19 vaccine in South Africa was slower than anticipated 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, and as a result we had to add an additional clinical site.
We can provide no assurance that such requirements will not have a material adverse effect on our business, prospects, financial condition and results of operations in the future, particularly if emergency circumstances occur. Because we received grants from the Israel Innovation Authority of the Israeli Ministry of Economy & Industry we are subject to ongoing restrictions.
We can provide no assurance that such requirements will not have a material adverse effect on our business, prospects, financial condition and results of operations in the future, particularly if emergency circumstances occur. Because we received grants from the Israel Innovation Authority of the Israeli Ministry of Economy and Industry we are subject to ongoing restrictions.
Principally, these risks include the following: ● Future clinical trial results may show the same results as the ORA-D-013-1 Phase 3 trial; 14 ● Future clinical trial results may be inconsistent with previous preliminary testing results and data from our earlier trials may be inconsistent with clinical data; ● Even if our oral insulin capsule is shown to be safe and effective for its intended purposes in future clinical trials, we may face significant or unforeseen difficulties in obtaining or manufacturing sufficient quantities or at reasonable prices; ● Our ability to complete the development and commercialization of the oral insulin capsule for our intended use is significantly dependent upon our ability to obtain and maintain experienced and committed partners to assist us with obtaining clinical and regulatory approvals for, and the manufacturing, marketing and distribution of, the oral insulin capsule on a worldwide basis; ● Even if our oral insulin capsule is successfully developed, commercially produced and receives all necessary regulatory approvals, there is no guarantee that there will be market acceptance of our product; and ● Our competitors may develop therapeutics or other treatments which are superior or less costly than our own with the result that our products, even if they are successfully developed, manufactured and approved, may not generate significant revenues.
Principally, these risks include the following: ● Future clinical trial results may show the same results as the ORA-D-013-1 Phase 3 trial; ● Future clinical trial results may be inconsistent with previous preliminary testing results and data from our earlier trials may be inconsistent with clinical data; ● Even if our oral insulin capsule is shown to be safe and effective for its intended purposes in future clinical trials, we may face significant or unforeseen difficulties in obtaining or manufacturing sufficient quantities or at reasonable prices; ● Our ability to complete the development and commercialization of the oral insulin capsule for our intended use is significantly dependent upon our ability to obtain and maintain experienced and committed partners to assist us with obtaining clinical and regulatory approvals for, and the manufacturing, marketing and distribution of, the oral insulin capsule on a worldwide basis; ● Even if our oral insulin capsule is successfully developed, commercially produced and receives all necessary regulatory approvals, there is no guarantee that there will be market acceptance of our product; and ● Our competitors may develop therapeutics or other treatments which are superior or less costly than our own with the result that our products, even if they are successfully developed, manufactured and approved, may not generate significant revenues.
Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter, including a judgment based upon the civil liability provisions of the U.S. securities laws, as well as a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met: ● subject to limited exceptions, the judgment is final and non-appealable; ● the judgment was given by a court competent under the laws of the state in which the court is located and is otherwise enforceable in such state; ● the judgment was rendered by a court competent under the rules of private international law applicable in Israel; ● the laws of the state in which the judgment was given provides for the enforcement of judgments of Israeli courts; ● adequate service of process has been effected and the defendant has had a reasonable opportunity to present its arguments and evidence; ● the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel; 24 ● the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and ● an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.
Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter, including a judgment based upon the civil liability provisions of the U.S. securities laws, as well as a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met: ● subject to limited exceptions, the judgment is final and non-appealable; ● the judgment was given by a court competent under the laws of the state in which the court is located and is otherwise enforceable in such state; ● the judgment was rendered by a court competent under the rules of private international law applicable in Israel; ● the laws of the state in which the judgment was given provides for the enforcement of judgments of Israeli courts; ● adequate service of process has been effected and the defendant has had a reasonable opportunity to present its arguments and evidence; ● the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel; ● the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and ● an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.
The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including: ● increased near-term and long-term expenditures; ● exposure to unknown liabilities; ● higher than expected acquisition or integration costs; ● incurrence of substantial debt or dilutive issuances of equity securities to fund future operations; ● write-downs of assets or goodwill or incurrence of non-recurring, impairment or other charges; 11 ● increased amortization expenses; ● impairment of relationships with key suppliers of any acquired business due to changes in management and ownership; ● inability to retain our key employees ; and ● possibility of future litigation.
The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including: increased near-term and long-term expenditures; exposure to unknown liabilities; higher than expected acquisition or integration costs; incurrence of substantial debt or dilutive issuances of equity securities to fund future operations; write-downs of assets or goodwill or incurrence of non-recurring, impairment or other charges; increased amortization expenses; impairment of relationships with key suppliers of any acquired business due to changes in management and ownership; inability to retain our key employees; and possibility of future litigation.
If any of these conditions are not met, Israeli courts will likely not enforce the applicable U.S. judgment. General Risk Factors Changes to tax laws could have a negative effect on us or our stockholders. At any time, the U.S. federal or state income tax laws, or the administrative interpretations of those laws, may be amended.
If any of these conditions are not met, Israeli courts will likely not enforce the applicable U.S. judgment. 25 General Risk Factors Changes to tax laws could have a negative effect on us or our stockholders. At any time, the U.S. federal or state income tax laws, or the administrative interpretations of those laws, may be amended.
If we do not resolve our dispute with HTIT favorably, we may need to reverse deferred revenue of up to $2 million and may not receive an additional $4 million in royalties. On August 21, 2020, we received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA.
If we do not resolve our dispute with HTIT favorably, we may need to reverse deferred revenue of up to $2 million and will not receive an additional $4 million in royalties. On August 21, 2020, we received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA.
These factors include: ● market acceptance of our new strategy, once determined and announced; 22 ● clinical trial results and the timing of the release of such results; ● the amount of cash resources and our ability to obtain additional funding; ● announcements of research activities, business developments, technological innovations or new products by us or our competitors; ● entering into or terminating strategic relationships; ● changes in government regulation; ● departure of key personnel; ● disputes concerning patents or proprietary rights; ● changes in expense level; ● future sales of our equity or equity-related securities; ● public concern regarding the safety, efficacy or other aspects of the products or methodologies being developed; ● activities of various interest groups or organizations; ● media coverage; and ● status of the investment markets.
These factors include: ● market acceptance of our new strategy, once determined and announced; ● clinical trial results and the timing of the release of such results; ● the amount of cash resources and our ability to obtain additional funding; ● announcements of research activities, business developments, technological innovations or new products by us or our competitors; ● entering into or terminating strategic relationships; 23 ● changes in government regulation; ● departure of key personnel; ● disputes concerning patents or proprietary rights; ● changes in expense level; ● future sales of our equity or equity-related securities; ● public concern regarding the safety, efficacy or other aspects of the products or methodologies being developed; ● activities of various interest groups or organizations; ● media coverage; and ● status of the investment markets.
If such clinical trials conducted by third parties fail, it could have a material adverse effect on our business, prospects, financial condition and results of operations. We can provide no assurance that our products will obtain regulatory approval or that the results of clinical trials will be favorable.
If such clinical trials conducted by third parties fail, it could have a material adverse effect on our business, prospects, financial condition and results of operations. 16 We can provide no assurance that our products will obtain regulatory approval or that the results of clinical trials will be favorable.
Further, we intend to rely on a combination of trade secrets and non-disclosure and other contractual agreements and technical measures to protect our rights in our technology. We intend to depend upon confidentiality agreements with our officers, directors, employees, consultants, and subcontractors, as well as collaborative partners, to maintain the proprietary nature of our technology.
Further, we rely on a combination of trade secrets and non-disclosure and other contractual agreements and technical measures to protect our rights in our technology. We depend upon confidentiality agreements with our officers, directors, employees, consultants, and subcontractors, as well as collaborative partners, to maintain the proprietary nature of our technology.
Further, we may need to indemnify companies to which we licensed our technology in the event that such technology is found to infringe upon the rights of others. Our commercial success will also depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
Further, we may need to indemnify companies to which we licensed our technology in the event that such technology is found to infringe upon the rights of others. 14 Our commercial success will also depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
Further, any products resulting from our research and development efforts might not be able to compete successfully with others’ existing and future products. See “Item 1. Business—Description of Business—Competition.” 18 Our financial position or results could be negatively affected by product liability claims.
Further, any products resulting from our research and development efforts might not be able to compete successfully with others’ existing and future products. See “Item 1. Business—Description of Business—Competition.” Our financial position or results could be negatively affected by product liability claims.
We may be restricted or prevented from manufacturing and selling our products in the event of an adverse determination in a judicial or administrative proceeding or if we fail to obtain necessary licenses. 13 We may be unable to protect our intellectual property rights and we may be liable for infringing the intellectual property rights of others.
We may be restricted or prevented from manufacturing and selling our products in the event of an adverse determination in a judicial or administrative proceeding or if we fail to obtain necessary licenses. We may be unable to protect our intellectual property rights and we may be liable for infringing the intellectual property rights of others.
These limitations could in turn reduce the amount of revenues that we will be able to generate in the future from sales of our products and licenses of our technology. In 2010, the federal government enacted healthcare reform legislation that has significantly impacted the pharmaceutical industry.
These limitations could in turn reduce the amount of revenues that we will be able to generate in the future from sales of our products and licenses of our technology. 20 In 2010, the federal government enacted healthcare reform legislation that has significantly impacted the pharmaceutical industry.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Item 1. Business—Description of Business—Employees.” We depend upon our senior management and skilled personnel and their loss or unavailability could put us at a competitive disadvantage.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Item 1. Business—Description of Business—Employees.” 19 We depend upon our senior management and skilled personnel and their loss or unavailability could put us at a competitive disadvantage.
In addition to the dilutive effect of a large number of shares of common stock and a low exercise price for the warrants and options, there is a potential that a large number of underlying shares of common stock may be sold in the open market at any given time, which could place downward pressure on the trading of our common stock. 21 Because we will not pay cash dividends in the foreseeable future, investors may have to sell shares of our common stock in order to realize their investment.
In addition to the dilutive effect of a large number of shares of common stock and a low exercise price for the warrants and options, there is a potential that a large number of underlying shares of common stock may be sold in the open market at any given time, which could place downward pressure on the trading of our common stock. 22 Because we will not pay cash dividends in the foreseeable future, investors may have to sell shares of our common stock in order to realize their investment.
Business—Description of Business—Government Regulation.” 16 We are dependent upon third party suppliers of our raw materials and for other services.
Business—Description of Business—Government Regulation.” We are dependent upon third party suppliers of our raw materials and for other services.
Any future revenues from HTIT are also dependent upon the ability of third parties to scale-up one of our oral capsule ingredients and to scale-up the manufacturing process of our capsules. Our future revenues from royalties from HTIT are further dependent upon the granting of regulatory approvals in the Territory.
Any future revenues from HTIT under the TLA are also dependent upon the ability of third parties to scale-up one of our oral capsule ingredients and to scale-up the manufacturing process of our capsules. Our future revenues from royalties from HTIT are further dependent upon the granting of regulatory approvals in the Territory.
In addition, we may not receive an additional $4 million in Royalties if HTIT is entitled to the full disputed amount of $6 million. 17 We may not realize a return on the ordinary shares of DNA and Entera that we own.
In addition, we will not receive an additional $4 million in Royalties if HTIT is entitled to the full disputed amount of $6 million. We may not realize a return on the ordinary shares of DNA and Entera that we own.
We have entered into agreements with Integrium LLC and other consultants to assist us in designing, conducting and managing our various clinical trials in the United States, Europe and Israel.
In the past, we entered into agreements with Integrium LLC and other consultants to assist us in designing, conducting and managing our various clinical trials in the United States, Europe and Israel.
Our participation in our existing joint venture is subject to risks, including the following: ● We share approval rights over certain major decisions affecting the ownership or operation of the joint venture and any assets owned by the joint venture; ● We may need to contribute additional capital in order to preserve, maintain or grow the joint venture and its investments; 19 ● Our joint venture investors may have economic or other business interests or goals that are inconsistent with our business interests or goals and that could affect our ability to fully benefit from the assets owned by the joint venture; ● Our joint venture investors may be subject to different laws or regulations than us, which could create conflicts of interest; ● Our joint venture has license and other agreements with other investors, which we are not party to and have no control over; ● Our ability to sell our interest in, or sell additional assets to, the joint venture or the joint venture’s ability to sell additional interests of, or assets owned by, the joint venture when we so desire are subject to the approval rights of the other joint venture investors under the terms of the agreements governing the joint venture; and ● Disagreements with our joint venture investors could result in litigation or arbitration that could be expensive and distracting to management and could delay important decisions.
Our participation in our existing joint ventures is subject to risks, including the following: ● We share approval rights over certain major decisions affecting the ownership or operation of the joint ventures and any assets owned by the joint ventures; ● We may need to contribute additional capital in order to preserve, maintain or grow the joint ventures and their investments; ● Our joint venture investors may have economic or other business interests or goals that are inconsistent with our business interests or goals and that could affect our ability to fully benefit from the assets owned by the joint ventures; ● Our joint venture investors may be subject to different laws or regulations than us, which could create conflicts of interest; ● Our joint ventures may have license and other agreements with other investors, which we are not party to and have no control over; ● Our ability to sell our interests in, or sell additional assets to, the joint ventures or the joint ventures’ ability to sell additional interests of, or assets owned by, the joint ventures when we so desire are subject to the approval rights of the other joint venture investors under the terms of the agreements governing the joint ventures; and ● Disagreements with our joint venture investors could result in litigation or arbitration that could be expensive and distracting to management and could delay important decisions.
Any future revenues from HTIT are dependent upon the achievement of certain milestones and conditions, and the success of HTIT to implement our technology and to manufacture the oral insulin capsule.
Any future revenues from HTIT under the TLA are dependent upon the achievement of certain milestones and conditions, and the success of HTIT to implement our technology and to manufacture the oral insulin capsule.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we would have 180 calendar days to regain compliance with the minimum bid requirement to achieve compliance with the minimum bid price requirement.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we would have 180 calendar days to regain compliance with the minimum bid requirement.
During the years ended December 31, 2017, 2019, 2020 and 2021, the dollar depreciated in relation to the NIS, which raised the dollar cost of our Israeli based operations and adversely affected our financial results, while during the year ended December 31, 2018 and 2022, the dollar increased in relation to the NIS, which reduced the dollar cost of our Israeli based operations costs.
During the years ended December 31, 2019, 2020 and 2021, the dollar depreciated in relation to the NIS, which raised the dollar cost of our Israeli based operations and adversely affected our financial results, while during the year ended December 31, 2022 and 2023, the dollar increased in relation to the NIS, which reduced the dollar cost of our Israeli based operations costs.
These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. 25
These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. 26
Any failure of Integrium LLC or any other consultant to fulfill their obligations could result in significant additional costs as well as delays in designing, consulting and completing clinical trials on our products. Our clinical trials may encounter delays, suspensions or other problems.
Any failure of a consultant to fulfill their obligations could result in significant additional costs as well as delays in designing, consulting and completing clinical trials on our products. 15 Our clinical trials may encounter delays, suspensions or other problems.
Sales of large amounts of our securities or large variations in trading volume might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of March 6, 2023, we had outstanding 39,783,813 shares of common stock, a large majority of which are freely tradable.
Sales of large amounts of our securities or large variations in trading volume might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of March 6, 2024, we had outstanding 40,519,160 shares of common stock, a large majority of which are freely tradable.
Business—Description of Business— Research and Development During 2022” regarding the results of the ORA-D-013-1 Phase 3 trial that did not meet its primary and secondary endpoints. Finally, the COVID-19 pandemic has impacted clinical trials generally. However, we experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally related to COVID-19.
Business—Description of Business— Research and Development” regarding the results of the ORA-D-013-1 Phase 3 trial that did not meet its primary or secondary endpoints. Finally, the COVID-19 pandemic impacted clinical trials generally in recent years, and we experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally related to COVID-19.
Giving effect to the exercise in full of all of our outstanding warrants, options and restricted stock units, or RSUs, including those currently unexercisable or unvested, we would have outstanding 43,386,638 shares of common stock.
Giving effect to the exercise in full of all of our outstanding warrants, options and restricted stock units, or RSUs, including those currently unexercisable or unvested, we would have outstanding 45,487,537 shares of common stock.
We are currently party to a joint venture, and we may in the future sell or contribute additional assets or acquire, develop or recapitalize assets to or in this joint venture or other joint ventures that we may enter.
We are currently party to certain joint ventures, and we may in the future sell or contribute additional assets or acquire, develop or recapitalize assets to or in these joint ventures or other joint ventures that we may enter.
We also expect to incur substantial expenditures in connection with our strategic evaluation process, as well as the regulatory approval process for each of our current or future product candidates during their respective developmental periods.
We expect to incur substantial expenditures in connection with our research and development programs, our strategic evaluation process, as well as the regulatory approval process with FDA and other agencies for each of our current or future product candidates during their respective developmental periods.
In such event, our business, prospects, financial condition and results of operations may be adversely affected as we may be required to scale-back, eliminate, or delay development efforts or product introductions or enter into royalty, sales or other agreements with third parties in order to commercialize our products.
In such event, our business, prospects, financial condition and results of operations may be adversely affected as we may be required to scale-back, eliminate, or delay development efforts or product introductions or enter into royalty, sales or other agreements with third parties in order to commercialize our products. 13 We have a history of losses and can provide no assurance as to our future operating results.
Eventual profitability will depend on our success in developing, manufacturing, and marketing our product candidates or in pursuing a successful strategic alternative. As of December 31, 2022 and 2021, we had working capital of $151,363,000 and $140,569,000, respectively, and stockholders’ equity of $151,812,000 and $166,453,000, respectively.
Eventual profitability will depend on our success in developing, manufacturing, and marketing our product candidates or in pursuing a successful strategic alternative. As of December 31, 2023 and 2022, we had working capital of $109,370,000 and $151,363,000, respectively, and stockholders’ equity of $163,821,000 and $151,812,000, respectively.
Positive results in a clinical trial may not be replicated in subsequent or confirmatory trials. Additionally, success in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful or that regulatory approval will be obtained.
Additionally, success in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful or that regulatory approval will be obtained.
For example, in January 2023, the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints.
For example, in January 2023, we announced that our ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints.
As a result, service of process upon us, our Israeli subsidiary and our directors and officers, may be difficult to obtain within the United States.
Almost all of our directors and officers are nationals and/or residents of countries other than the United States. As a result, service of process upon us, our Israeli subsidiary and our directors and officers, may be difficult to obtain within the United States.
We are highly dependent upon our ability to enter into agreements with collaborative partners to develop, commercialize and market our products. Our long-term strategy is to ultimately seek a strategic commercial partner, or partners, such as large pharmaceutical companies, with extensive experience in the development, commercialization, and marketing of insulin applications and/or other orally digestible drugs.
Our long-term strategy is to ultimately seek a strategic commercial partner, or partners, such as large pharmaceutical companies, with extensive experience in the development, commercialization, and marketing of insulin applications and/or other orally digestible drugs.
We received royalty-bearing grants from the Israel Innovation Authority of the Israeli Ministry of Economy & Industry, or IIA, for research and development programs that meet specified criteria. We did not recognize any grants in the year ended December 31, 2022, the four month period ended December 31,2021 and the year ended August 31, 2021.
We received royalty-bearing grants from the Israel Innovation Authority of the Israeli Ministry of Economy and Industry, or IIA, for research and development programs that meet specified criteria. We did not recognize any grants in the years ended December 31, 2023 and December 31, 2022. We do not expect to receive further grants from the IIA in the future.
Risks Related to our Common Stock Future sales of our common stock by our existing stockholders could adversely affect our stock price. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that these sales could occur.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, or the perception that these sales could occur.
Following the results of the ORA-D-013-1 Phase 3 trial, we have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate.
Following the results of the ORA-D-013-1 Phase 3 trial, we conducted a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate and are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
Following the results of the ORA-D-013-1 Phase 3 trial, we are currently evaluating with Medicox a path forward to continue our collaboration. If we are not successful in finding a mutually agreed way to continue our collaboration, or if Medicox is not successful in independently advancing the oral insulin candidate, we may not realize the benefits from this collaboration.
If we are not successful in finding a mutually agreed way to continue our collaboration following the results of the ORA-D-013-1 Phase 3 trial, or if Medicox is not successful in independently advancing the oral insulin candidate, we may not realize the benefits from this collaboration. 18 We are highly dependent upon our ability to enter into agreements with collaborative partners to develop, commercialize and market our products.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We rely upon patents to protect our technology. The patent position of biopharmaceutical and biotechnology firms is generally uncertain and involves complex legal and factual questions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We rely upon patents to protect our technology. The patent position of biopharmaceutical and biotechnology firms is generally uncertain and involves complex legal and factual questions. We do not know whether any of our current or future patent applications will result in the issuance of any patents.
We may experience further delays in site initiation and patient enrollment, failures to comply with study protocols, delays in the manufacture of our product candidates for clinical testing and other difficulties in starting or competing our clinical trials. 15 Initial success in the completed and ongoing early-stage clinical trials does not ensure success in later stage trials, regulatory approval or commercial viability of a product.
We may experience further delays in site initiation and patient enrollment, failures to comply with study protocols, delays in the manufacture of our product candidates for clinical testing and other difficulties in starting or competing our clinical trials.
We continue to assess the effect on our operations by monitoring the status of COVID-19. We face uncertainties related to Oravax’s oral COVID-19 vaccine. We face uncertainties related to Oravax’s oral COVID-19 vaccine, including uncertainties related to the risk that our continued development programs may not be successful, commercially viable or receive approval from regulatory authorities.
We face uncertainties related to Oravax’s oral COVID-19 vaccine, including uncertainties related to the risk that our continued development programs may not be successful, commercially viable or receive approval from regulatory authorities. Other companies may produce superior or competitive oral or other products that make Oravax’s oral COVID-19 vaccine not commercially worthwhile.
As of March 6, 2023, we had outstanding warrants and options exercisable for 1,548,256 shares of common stock at a weighted average exercise price of $4.71. We also had outstanding RSUs exercisable for 265,302 shares of common stock at a total exercise price of $900.
As of March 6, 2024, we had outstanding warrants and options exercisable for 20,000 shares of common stock at a weighted average exercise price of $4.13. We also had outstanding RSUs exercisable for 350,761 shares of common stock.
Patent litigation is widespread in the biopharmaceutical and biotechnology industry and we cannot predict how this will affect our efforts to form strategic alliances, conduct clinical testing or manufacture and market any products under development. If challenged, our patents may not be held valid.
In addition, laws of certain foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Patent litigation is widespread in the biopharmaceutical and biotechnology industry and we cannot predict how this will affect our efforts to form strategic alliances, conduct clinical testing or manufacture and market any products under development.
At present, following the results of the ORA-D-013-1 Phase 3 trial, we have initiated a comprehensive analysis of the data to understand 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.
At present, following the results of the ORA-D-013-1 Phase 3 trial, we conducted a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate and are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
We may become involved in securities and stockholder litigation that could divert management’s attention and harm the Company’s business, and insurance coverage may not be sufficient to cover all costs and damages.
If we are unable to successfully retain our remaining personnel, we are at risk of a disruption to our exploration and consummation of a strategic alternative as well as business operations. 12 We may become involved in securities and stockholder litigation that could divert management’s attention and harm the Company’s business, and insurance coverage may not be sufficient to cover all costs and damages.
For the period from our inception on April 12, 2002 through December 31, 2022, the year ended December 31, 2022, the four month period ended December 31, 2021 and the year ended August 31, 2021, we incurred net losses of $163,081,000, $126,520,000 and $114,852,000, respectively. We may never achieve profitability and expect to incur net losses in the foreseeable future.
During the years ended December 31, 2023 and 2022, we generated revenues of $1,340,000 and $2,703,000, respectively. For the period from our inception on April 12, 2002 through December 31, 2023, we incurred net losses of $157,556,000. We may never achieve profitability and expect to incur net losses in the foreseeable future. See “Item 7.
We currently have only licensing revenues and no product revenues, and may not succeed in developing or commercializing any products which could generate product revenues. We do not expect to have any products on the market for several years. In addition, development of our product candidates requires a process of pre-clinical and clinical testing, during which our products could fail.
We do not expect to have any products on the market for several years. In addition, development of our product candidates requires a process of pre-clinical and clinical testing, during which our products could fail. For example, in January 2023, the ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints.
While we wholly dispute said claims and have been engaged in discussions and exchanges with HTIT in an attempt to clarify and resolve disagreements between the parties regarding milestone payments and work plan implementation, we may be subsequently required to repay to HTIT up to $2 million, which has been received and has been included in our deferred revenue in each of the consolidated balance sheets for the years ended December 31, 2022 and 2021.
While we wholly disputed said claims and are planning to resolve any such claims as part of our discussions with HTIT, if we are not successful in consummating the JV or resolving the claims as part of the JV, we may be subsequently required to repay to HTIT up to $2 million, which has been received and has been included in our deferred revenue in each of the consolidated balance sheets for the years ended December 31, 2023 and 2022.
Our ability to successfully complete a strategic transaction depends in large part on our ability to retain certain of our remaining personnel. If we are unable to successfully retain our remaining personnel, we are at risk of a disruption to our exploration and consummation of a strategic alternative as well as business operations.
Our ability to successfully complete a strategic transaction depends in large part on our ability to retain certain of our remaining personnel.
For example, in January 2023, we announced that our ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints. As a result, we decided to terminate our ORA-D-013-2 Phase 3 trial and have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate.
As a result, we decided to terminate our ORA-D-013-2 Phase 3 trial, conducted a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate and are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
We do not expect to receive further grants from the IIA in the future. The terms of the IIA grants limit our ability to transfer know-how developed under an approved research and development program outside of Israel, regardless of whether the royalties were fully paid.
The terms of the IIA grants limit our ability to transfer know-how developed under an approved research and development program outside of Israel, regardless of whether the royalties were fully paid. It may be difficult to enforce a U.S. judgment against us or our officers and directors and to assert U.S. securities laws claims in Israel.
We could also become involved in interference proceedings in connection with one or more of our patents or patent applications to determine priority of invention. If we become involved in any litigation, interference or other administrative proceedings, we will likely incur substantial expenses and the efforts of our technical and management personnel will be significantly diverted.
If challenged, our patents may not be held valid. We could also become involved in interference proceedings in connection with one or more of our patents or patent applications to determine priority of invention.
In addition, an adverse determination could subject us to significant liabilities or require us to seek licenses that may not be available on favorable terms, if at all.
If we become involved in any litigation, interference or other administrative proceedings, we will likely incur substantial expenses and the efforts of our technical and management personnel will be significantly diverted. In addition, an adverse determination could subject us to significant liabilities or require us to seek licenses that may not be available on favorable terms, if at all.
These transactions, however, may not adequately protect us from future currency fluctuations and, even if they do protect us, may involve operational or financing costs we would not otherwise incur. 20 The COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease, may materially and adversely affect our clinical trial operations, our business and operations.
These transactions, however, may not adequately protect us from future currency fluctuations and, even if they do protect us, may involve operational or financing costs we would not otherwise incur. We face uncertainties related to Oravax’s oral COVID-19 vaccine.
We have a history of losses and can provide no assurance as to our future operating results. We do not have sufficient revenues from our research and development activities to fully support our operations. Consequently, we have incurred net losses and negative cash flows since inception.
We do not have sufficient revenues from our research and development activities to fully support our operations. Consequently, we have incurred net losses and negative cash flows since inception. We currently have only licensing revenues and no product revenues, and may not succeed in developing or commercializing any products which could generate product revenues.
Accordingly, if any of the foregoing does not occur, we may not be successful in receiving future revenues from HTIT and may not succeed with our business plans in China.
Accordingly, if any of the foregoing does not occur, we may not be successful in receiving future revenues from HTIT and may not succeed with our business plans in China. 17 If we fail to complete the transactions contemplated under the JV Agreement with HTIT, if such joint venture is not successful, or if we fail to realize the benefits we anticipate from such joint venture, we may not be able to capitalize on the full market potential of our drug products and technology.
Even if our analysis results in a path forward for our oral insulin capsule, there are a variety of risks and uncertainties related to its development.
Concurrently, we are examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities. Even if we succeed in commencing a new clinical trial for our oral insulin capsule, there are a variety of risks and uncertainties related to its development.
Our business, prospects, financial condition and results of operations could be materially adversely affected if major hostilities involving Israel should occur or if trade between Israel and its current trading partners is interrupted or curtailed. 23 All adult male permanent residents of Israel, unless exempt, may be required to perform military reserve duty annually.
Although we believe that there is no immediate risk to our business operations related to these events, our business, prospects, financial condition and results of operations could be materially adversely affected if such hostilities involving Israel continue or escalate or if trade or scientific cooperation between Israel and its current partners is interrupted or curtailed.
Competitors or potential competitors may have filed applications for, or may have received patents and may obtain additional and proprietary rights to compounds or processes used by or competitive with ours. In addition, laws of certain foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States.
Even issued patents may be challenged, invalidated or circumvented. Patents may not provide a competitive advantage or afford protection against competitors with similar technology. Competitors or potential competitors may have filed applications for, or may have received patents and may obtain additional and proprietary rights to compounds or processes used by or competitive with ours.
Additionally, all such residents are subject to being called to active duty at any time under emergency circumstances. Some of our officers, directors and employees currently are or in the future may be obligated to perform annual military reserve duty.
Additionally, all such residents are subject to being called to active duty at any time under emergency circumstances, and several hundred thousand Israeli military reservists were drafted to perform immediate military service during the current war with Hamas and other hostile elements, such as Hezbollah in Lebanon.
Removed
During the year ended December 31, 2022, the four month period ended December 31, 2021 and the year ended August 31, 2021, we generated revenues of $2,703,000, $904,000 and $2,703,000, respectively.
Added
Initial success in the completed and ongoing early-stage clinical trials does not ensure success in later stage trials, regulatory approval or commercial viability of a product. Positive results in a clinical trial may not be replicated in subsequent or confirmatory trials.
Removed
We do not know whether any of our current or future patent applications will result in the issuance of any patents. Even issued patents may be challenged, invalidated or circumvented. Patents may not provide a competitive advantage or afford protection against competitors with similar technology.
Added
On January 22, 2024, we entered into the JV Agreement with HTIT, pursuant to which, subject to the terms and conditions set forth in the JV Agreement, the parties will establish a JV based on Oramed’s oral drug delivery technology.
Removed
The spread of COVID-19 may result in the inability of our suppliers to deliver supplies to us on a timely basis. In addition, health professionals may reduce staffing and reduce or postpone meetings with clients in response to the spread of an infectious disease.
Added
The consummation of the JV Agreement is subject to and contingent upon the parties entering into additional agreements within a three-month period, including an asset transfer agreement for the transfer of Oramed’s intellectual property to the JV, a commercial supply agreement for the manufacture and supply of products by HTIT to the JV, as well as other documents and agreements to regulate the relationship of the parties and the JV to be formed pursuant to the JV Agreement.
Removed
Though we have not yet experienced such events, if they would occur, they could result in a period of business disruption, and in reduced operations, any of which could materially affect our business, financial condition and results of operations. However, we experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally.
Added
There is no assurance that the parties will complete and sign these additional agreements within the agreed timeline or at all. If such agreements are not signed within the agreed timeframe, then either party may apply a 30-day extension, after which the JV Agreement may be terminated and voided by either party.
Removed
Although we do not expect any material impact on our development timeline and our liquidity due to COVID-19, the ongoing development of the COVID-19 pandemic globally could adversely impact our clinical trial operations in the United States, Israel and in Europe, including our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography or due to government or institutional quarantines or stay-at-home measures.
Added
Thereafter, the consummation of the JV transaction is further subject to the satisfaction or waiver of certain other closing conditions within a three-month period following the completion of the aforesaid ancillary agreements.
Removed
Other companies may produce superior or competitive oral or other products that make Oravax’s oral COVID-19 vaccine not commercially worthwhile.
Added
If the closing conditions are not met within the agreed timeframe, then either party may apply a 30-day extension, after which the JV Agreement may be terminated and voided by either party.
Removed
It may be difficult to enforce a U.S. judgment against us or our officers and directors and to assert U.S. securities laws claims in Israel. Almost all of our directors and officers are nationals and/or residents of countries other than the United States.
Added
If we do not successfully complete the ancillary agreements in a timely manner, or at all, this may harm our ability to complete additional clinical trials and marketing of our oral insulin candidate. In addition, this may cause irreparable harm to our financial position and business operations.
Added
Furthermore, there can be no assurances that the JV will receive the necessary regulatory approvals for the Phase 3 oral insulin trial in the United States or that our drug products and our technology will be developed and commercialized successfully.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+1 added−1 removed2 unchanged
Biggest changeCommon Stock Our common stock is traded on the Nasdaq Capital Market and on the Tel Aviv Stock Exchange, in each case under the symbol “ORMP.” Holders As of March 6, 2023, there were 39,783,813 shares of our common stock issued and outstanding held of record by approximately 34 registered stockholders.
Biggest changeCommon Stock Our common stock is traded on the Nasdaq Capital Market and on the Tel Aviv Stock Exchange, in each case under the symbol “ORMP.” Holders As of March 6, 2024, there were 40,519,160 shares of our common stock issued and outstanding held of record by approximately 38 registered stockholders.
Removed
Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended December 31, 2022, we issued an aggregate amount of 3,000 unregistered shares of common stock to a service provider, as part of the compensation for services provided, pursuant to the exemption under Section 4(a)(2) of the Securities Act. 1,500 unregistered shares of common stock were issued to the service provider on each of October 15, 2022 and December 15, 2022.
Added
Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were made during the three months ended December 31, 2023. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

52 edited+28 added−36 removed31 unchanged
Biggest changeYear ended December 31, Four months ended December 31, Four months ended December 31, Year ended August 31, 2022 2021 2021 2020 2021 (Unaudited) (Unaudited) (dollar amounts in thousands, except share and per share data) Revenues $ 2,703 $ 2,703 $ 904 $ 904 $ 2,703 Cost of revenues - - - - - Research and development expenses 27,639 23,203 9,037 6,889 20,989 Sales and marketing expenses 1,851 898 898 - - General and administrative expenses 13,811 7,591 3,295 1,576 5,937 Financial income (expense), net 2,934 1,068 71 237 1,234 Loss before taxes on income 37,664 27,921 12,255 7,324 22,989 Taxes on income 100 - - - - Net loss for the period $ 37,764 $ 27,921 $ 12,255 $ 7,324 $ 22,989 Net loss attributable to Company’s stockholders 36,561 26,583 11,668 7,324 22,238 Net loss attributable to non-controlling interest 1,203 1,338 587 - 751 Net loss for the period $ 37,764 $ 27,921 $ 12,255 $ 7,324 $ 22,989 Basic and diluted loss per share of common stock $ 0.94 $ 0.81 $ 0.31 $ 0.30 $ 0.78 Weighted average shares of common stock outstanding used in computing basic and diluted loss per share of common stock 38,997,649 32,641,288 37,113,137 24,394,010 28,469,068 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.
Biggest changeYear ended December 31, 2023 2022 (dollar amounts in thousands, except per share data) Revenues $ 1,340 $ 2,703 Cost of revenues - - Research and development expenses (8,971 ) (27,639 ) Sales and marketing 287 (1,851 ) General and administrative expenses (8,425 ) (13,811 ) Interest expenses (2,037 ) - Financial income (expenses), net 22,894 2,934 Income (loss) before taxes on income 5,088 (37,664 ) Taxes on income - 100 Net income (loss) for the year 5,088 (37,764 ) Net income (loss) attributable to Company’s stockholders 5,525 (36,561 ) Net loss attributable to non-controlling interest (437 ) (1,203 ) Net income (loss) for the year 5,088 (37,764 ) Basic income (loss) per share of common stock $ 0.14 $ (0.94 ) Diluted income (loss) per share of common stock $ 0.14 $ (0.94 ) Weighted average shares of common stock outstanding used in computing basic income (loss) per share of common stock 40,315,068 38,997,649 Weighted average shares of common stock outstanding used in computing diluted income (loss) per share of common stock 40,566,901 38,997,649 29 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.
In addition, the Israeli government may from time to time audit sales of products which it claims incorporate technology funded through IIA programs which may lead to additional royalties being payable on additional products. Sales and Marketing Expenses Sales and marketing expenses include the salaries and related expenses of our commercial functions, consulting costs and other general costs.
In addition, the Israeli government may from time to time audit sales of products which it claims incorporate technology funded through IIA programs which may lead to additional royalties being payable on additional products. Sales and Marketing Expenses Sales and marketing expenses include the salaries and related expenses of our commercial functions, consulting costs and other general expenses.
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. 28 Clinical activities which relate principally to clinical sites and other administrative functions to manage our clinical trials are performed primarily by CROs.
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.
Actual results may differ from these estimates under different assumptions or conditions. 33 Valuation of RSUs, options and warrants : We grant options to purchase shares of our common stock to employees and consultants and have and may in the future issue warrants in connection with some of our financings and to certain other consultants.
Actual results may differ from these estimates under different assumptions or conditions. Valuation of RSUs, options and warrants : We grant options to purchase shares of our common stock to employees and consultants and have and may in the future issue warrants in connection with some of our financings and to certain other consultants.
The R&D Law requires the grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the recipient that results in a non-Israeli entity becoming an interested party in the recipient, and requires the new non-Israeli interested party to undertake to the IIA to comply with the R&D Law.
The R&D Law requires the grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the recipient that results in a non-Israeli entity or person becoming an interested party in the recipient, and requires the new non-Israeli interested party to undertake to the IIA to comply with the R&D Law.
It also contains variable consideration of contractual milestone payments and sales-based royalties. Our obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period we expect to provide support to Medicox. As of December 31, 2022, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.
It also contains variable consideration of contractual milestone payments and sales-based royalties. Our obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period we expect to provide support to Medicox. As of December 31, 2023, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.
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 million, which was received by Oramed as of December 31, 2022 and is presented under long-term deferred revenues.
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 million, which was received by Oramed as of December 31, 2023 and is presented under long-term deferred revenues.
From inception through December 31, 2022, 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.
From inception through December 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.
Our primary financing activities since the beginning of the year ended December 31, 2022 were as follows: ● During the year ended December 31, 2022, 4,200 warrants were exercised and 71,607 options were exercised, resulting in the issuance of 38,651 shares of common stock.
Our primary financing activities since the beginning of the year ended December 31, 2023, were as follows: ● During the year ended December 31, 2023, no warrants and options were exercised. During the year ended December 31, 2022, 4,200 warrants were exercised and 71,607 options were exercised, resulting in the issuance of 38,651 shares of common stock.
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. Critical Accounting Policies Our significant accounting policies are more fully described in the notes to our accompanying consolidated financial statements.
Following the results of the Phase 3 trials for our oral insulin capsule candidate, ORMD-0801, the JV with HTIT and the current strategic review initiated by the Company, our obligations may change significantly. Critical Accounting Policies Our significant accounting policies are more fully described in the notes to our accompanying consolidated financial statements.
The R&D Law further provides that the know-how developed under an approved research and development program may not be transferred or licensed to any third parties outside Israel absent IIA approval which may be granted in certain circumstances as follows: (a) the grant recipient pays to the IIA a portion of the sale or license price paid in consideration for the purchase or license of such IIA-funded know-how or the price paid in consideration for the sale of the grant recipient itself, as the case may be, in accordance with certain formulas included in the R&D Law; (b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how; or (c) such transfer of IIA-funded know-how is made in the context of IIA approved research and development cooperation projects or consortia. 29 The R&D Law imposes reporting requirements with respect to certain changes in the ownership of a grant recipient.
The R&D Law further provides that the know-how developed under an approved research and development program and any derivatives thereof may not be transferred or licensed to any third parties outside Israel absent IIA approval which may be granted in certain circumstances as follows: (a) the grant recipient pays to the IIA a portion of the sale or license price paid in consideration for the purchase or license of such IIA-funded know-how or the price paid in consideration for the sale of the grant recipient itself, as the case may be, in accordance with certain formulas included in the tracks published under the R&D Law; (b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how; or (c) such transfer of IIA-funded know-how is made in the context of IIA approved research and development cooperation projects or consortia. 31 The R&D Law imposes reporting requirements with respect to certain changes in the ownership of a grant recipient.
Royalties are generally payable up to a maximum amount equaling 100% of the grants received (dollar linked) with the addition of interest at an annual rate based on the LIBOR rate. The R&D Law generally requires that a product developed under a program be manufactured in Israel.
Royalties are generally payable up to a maximum amount equalling 100% of the grants received (dollar linked) with the addition of interest at an annual rate based on the SOFR rate. The R&D Law generally requires that a product developed under a program be manufactured in Israel.
If Medicox proceeds with the regulatory approval process in the Republic of Korea, we expect most of the revenue to be recognized in 2024, going forward. We note that our Phase 3 trial did not meet its primary and secondary endpoints.
If Medicox proceeds with the regulatory approval process in the Republic of Korea, we expect most of the revenue to be recognized in 2025, going forward. We note that our Phase 3 trial did not meet its primary or secondary endpoints.
Government Grants The Government of Israel encourages research and development projects through the IIA, pursuant to the R&D Law. Under the R&D Law, a research and development plan that meets specified criteria is generally eligible for a grant of up to 50% of certain approved research and development expenditures. Each plan must be approved by the IIA.
Under the R&D Law, a research and development plan that meets specified criteria is generally eligible for a grant of up to 50% of certain approved research and development expenditures. Each plan must be approved by the IIA.
Liquidity and Capital Resources From our inception through December 31, 2022, we have incurred losses in an aggregate amount of $163,081,000. During that period and through December 31, 2022, 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 $252,946,000, net of transaction costs.
Liquidity and Capital Resources From our inception through December 31, 2023, we have incurred losses in an aggregate amount of $157,556,000. During that period and through December 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 $255,384,000, net of transaction costs.
In any case of transfer of manufacturing out of Israel, the grant recipient is required to pay royalties at an increased rate, which may be substantial, and the aggregate repayment amount is increased up to 120%, 150% or 300% of the grant, depending on the portion of the total manufacturing volume that is performed outside of Israel.
In any case of transfer of manufacturing out of Israel, the grant recipient is required to pay royalties at an increased rate, which may be substantial, and the aggregate repayment amount is increased up to 120% or 150% of the grant received (dollar linked) with the addition of interest at an annual rate based on the SOF R rate, depending on the portion of the total manufacturing volume that is performed outside of Israel.
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 year ended December 31, 2022 increased by 82% to $13,811,000, compared to $7,591,000 for the year ended December 31, 2021.
General and Administrative Expenses General and administrative expenses include the salaries and related expenses of our management, consulting expenses, legal and professional fees, travel expenses, business development expenses, insurance expenses and other general expenses. General and administrative expenses for the year ended December 31, 2023 decreased by 39% to $8,425,000, compared to $13,811,000 for the year ended December 31, 2022.
If Medicox chooses to terminate the agreement as a result of the outcome of the Phase 3 trials, we will accelerate revenue recognition and recognize it in 2023.
If Medicox chooses to terminate the agreement as a result of the outcome of the Phase 3 trials, we will accelerate revenue recognition and recognize it in the relevant period. Investments at fair value : On September 21, 2023.
The R&D Law also provides that know-how developed under an approved research and development program may not be transferred or licensed to third parties in Israel without the approval of the research committee. Such approval is not required for the sale or export of any products resulting from such research or development.
The R&D Law also provides that know-how developed under an approved research and development program and any derivatives thereof may not be transferred or licensed to third parties in Israel without the approval of the research committee, which approval may be subject to the payment of royalties from the sale.
The increase in working capital surplus from December 31, 2021 to December 31, 2022 was mainly due to an increase in cash and cash equivalents. During the year ended December 31, 2022, cash and cash equivalents decreased to $40,464,000 from $77,245,000 as of August 31, 2021. The decrease was mainly due to the reasons described below.
The decrease in working capital surplus from December 31, 2022 to December 31, 2023 was mainly due to the Short-Term Borrowings. During the year ended December 31, 2023, cash and cash equivalents decreased to $9,055,000 from $40,464,000 as of December 31, 2022. The decrease was mainly due to the reasons described below.
There was no cost of revenues for the years ended December 31, 2022 and 2021 and the four month periods ended December 31, 2021 and 2020.
There was no cost of revenues for the years ended December 31, 2023 and 2022.
Research and development expenses for the year ended December 31, 2022 increased by 19% to $27,639,000, compared to $23,203,000 for the year ended December 31, 2021. The increase was mainly due to an increase in expenses related to our Phase 3 clinical trials and to stock-based compensation expenses.
Research and development expenses for the year ended December 31, 2023 decreased by 68% to $8,971,000, compared to $27,639,000 for the year ended December 31, 2022. The decrease was mainly due to a decrease in expenses related to our Phase 3 clinical trials and in stock-based compensation expenses.
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 December 31, 2022, we had $40,464,000 of available cash, $111,513,000 of short-term bank deposits, $3,743,000 of marketable securities and $2,700,000 of long-term investments.
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 December 31, 2023, we had $9,055,000 of available cash and $95,279,000 of short-term bank deposits.
The cash consideration received for the exercise of options and warrants was $638,267. ● 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 we may issue and sell shares of our common stock having an aggregate offering price of up to $100,000,000, through a sales agent, subject to certain terms and conditions.
During the year ended December 31, 2022, we received $1,844,000 of income, mainly from interest on short-term and long-term deposits. ● 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 we may issue and sell shares of our common stock having an aggregate offering price of up to $100,000,000, through a sales agent, subject to certain terms and conditions.
Revenue recognition : Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for the products are transferred to the customer and collection is reasonably assured.
Revenue recognition : Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for the products are transferred to the customer and collection is reasonably assured. On November 13, 2022, we entered into a distribution license agreement with Medicox, or the Medicox License Agreement.
The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea. 34 Under ASC 606, we identified Medicox as a customer and the Medicox License Agreement as a contract with a customer.
The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea.
Operating activities used cash of $27,918,000 in the year ended December 31, 2022, compared to $21,181,000 used in the year ended August 31, 2021. Cash used in operating activities consisted mainly of net loss resulting from research and development, general and administrative and sales and marketing expenses.
Operating activities used cash of $10,295,000 in the year ended December 31, 2023, compared to $27,918,000 used in the year ended December 31, 2022. Cash used in operating activities consisted mainly of changes in fair value of investments partially offset by net loss resulting from research and development and general and administrative expenses.
As of December 31, 2022, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $133,000.
In the years ended December 31, 2023 and 2022, we did not recognize any research and development grants. As of December 31, 2023, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $59,000.
On December 31, 2022, we had a working capital surplus of $151,363,000 and an accumulated loss of $163,081,000. As of December 31, 2021, our total current assets were $147,937,000 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.
On December 31, 2023, we had a working capital surplus of $109,370,000 and an accumulated loss of $157,556,000. As of December 31, 2022, our total current assets were $157,109,000 and our total current liabilities were $5,746,000. On December 31, 2022, we had a working capital surplus of $151,363,000 and an accumulated loss of $163,081,000.
Investing activities provided cash of $30,211,000 in the year ended December 31, 2022, compared to cash used by investing activities of $23,764,000 in the year ended August 31, 2021. Cash provided in investing activities is mainly due to proceeds from short-term investments, partially offset by the acquisition of short-term investments.
Investing activities used cash of $73,038,000 in the year ended December 31, 2023, compared to cash provided by investing activities of $30,211,000 in the year ended December 31, 2022. Cash used in investing activities is mainly due to our investment in the Transaction and the purchase of short-term deposits, partially offset by the proceeds of short-term deposits.
Stock-based compensation expenses for the year ended December 31, 2022, were $3,176,000, compared to $1,598,000 for the year ended December 31, 2021. The increase was mainly due to new grants in 2022.
Stock-based compensation expenses for the year ended December 31, 2023, were $1,718,000, compared to $3,176,000 for the year ended December 31, 2022.
Risk Factors.” Overview of Operations We are currently a pharmaceutical company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the oral delivery of therapeutic proteins.
Risk Factors.” Overview of Operations We are a pharmaceutical company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the oral delivery of therapeutic proteins. We have developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other proteins.
For a comparison of our results of operations and financial condition for the fiscal years ended August 31, 2021 and 2020, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021, filed with the SEC on November 24, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 6, 2023.
If there are increases in our operating expenses, we may need to seek additional financing during the next 12 months.
If there are increases in our operating expenses, we may need to seek additional financing during the next 12 months. 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.
We 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 we view a predominant item in the combined performance obligation.
This performance obligation includes a non-distinct distribution license for ORMD-0801, which we view a predominant item in the combined performance obligation.
The increase was mainly due to higher stock-based compensation costs, an increase in legal expenses and higher salary expenses due to the recruitment of new employees in the year ended December 31, 2022, partially offset by lower bonuses in the year ended December 31, 2022.
The decrease was mainly due to lower stock-based compensation costs and legal expenses, partially offset by higher consulting expenses. Stock-based compensation expenses for the year ended December 31, 2023 were $2,933,000, compared to $7,160,000 for the year ended December 31, 2022.
Concurrently, 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. Impact of COVID-19 We do not expect any material impact on our development timeline and our liquidity due to COVID-19.
We are additionally examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders. 28 On September 21, 2023, we entered into and consummated the Transaction.
Financing activities provided cash of $10,779,000 in the year ended December 31, 2022, compared to $102,892,000 in the year ended August 31, 2021. Cash provided by financing activities consisted mainly of proceeds from our issuance of common stock and proceeds from exercise of warrants and options.
Financing activities provided cash of $51,978,000 in the year ended December 31, 2023, compared to $10,779,000 in the year ended December 31, 2022. Cash provided by financing activities consisted mainly of the Short-Term Borrowings.
Concurrently, 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. At this time, we cannot foresee how these strategic decisions will impact our financial results and operations in 2023.
Conducting this clinical trial, whether independently or as part of the JV with HTIT, will require significant funds and resources. Concurrently, 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.
Out of these exercised options, 10,750 options were exercised for cash and 60,857 via a cashless method. The cash consideration received for the exercise of options and warrants was $62,490. During the four month period ended December 31, 2021, 73,800 warrants were exercised and 18,166 options were exercised for cash, resulting in the issuance of 91,966 shares of common stock.
Out of these exercised options, 10,750 options were exercised for cash and 60,857 via a cashless method. The cash consideration received for the exercise of options and warrants was $62,490. ● During the year ended December 31, 2023, we received $5,156,000 of income, mainly from interest on short-term and long-term deposits.
The increase was mainly due to equity awards granted to a consultant and to new grants awarded in 2021. 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.
Following the results of the ORA-D-013-1 Phase 3 trial, which did not meet its primary or secondary endpoints, we terminated both ORA-D-013-1 and ORA-D-013-2 Phase 3 clinical trials. In 2023, we completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters responded well to oral insulin.
Weighted Average Shares of Common Stock Outstanding Weighted average shares of common stock outstanding for the year ended December 31, 2022 were 38,997,649, compared to 32,641,288 for the year ended December 31, 2021. 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 Weighted average shares of common stock outstanding used in computing basic income (loss) per share of common stock for the year ended December 31, 2023 were 40,315,068 compared to 38,997,649 for the year ended December 31, 2022. The increase was mainly due to RSUs that vested during the year ended December 31, 2023.
Stock-based compensation expenses for the year ended December 31, 2022 were $7,160,000, compared to $2,368,000 for the year ended December 31, 2021. The increase was mainly due to equity awards granted to employees during 2022.
The decrease was mainly due to equity awards granted to employees during 2022, and performance equity awards that did not meet their performance conditions during the year ended December 31, 2023. Interest Expenses Interest expenses were $2,037,000 for the year ended December 31, 2023, while there were no interest expenses for the year ended December 31, 2022.
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.
We are also examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders. 30 Government Grants The Government of Israel encourages research and development projects through the IIA, pursuant to the R&D Law.
Trend Information Following the results of the Phase 3 trials for our oral insulin capsule candidate, ORMD-0801, we have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate.
As of December 31, 2023 and through March 6, 2024, 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $26,253,000. 34 Trend Information Following the results of the Phase 3 trials for our oral insulin capsule candidate, ORMD-0801, we conducted a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate, and we are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
Stock-based compensation expenses for the year ended December 31, 2022 were $1,172,000, compared to $579,000 for the year ended December 31, 2021. The increase was mainly due to equity awards granted to an employee during 2022.
We recorded stock-based compensation income of $440,000 for the year ended December 31, 2023, compared to expenses of $1,172,000 for the year ended December 31, 2022. This was mainly due to termination of the employment of an executive officer, which led to the forfeiture of his unvested options and RSUs.
The increase in loss was mainly due to the higher net loss in the year ended December 31, 2022 compared to the year ended December 31, 2021.
This was primarily due to the changes discussed above that caused us to have income in the year ended December 31, 2023, compared to a loss in the year ended December 31, 2022.
We continue to assess the effect on our operations by monitoring the status of COVID-19. 27 Results of Operations The table and discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the year ended December 31, 2022 and the year ended December 31, 2021 and the four month periods ended December 31, 2021 and 2020.
For further details, see “Item 1 – Business – Research and Development – Oral Insulin.” Results of Operations The table and discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022.
The decrease is mainly due to a decrease in fair value of the ordinary shares of Entera. Basic and Diluted Loss Per Share of Common Stock Basic and diluted loss per share of common stock for the year ended December 31, 2022 increased by 16% to $0.94, compared to $0.81 for the year ended December 31, 2021.
The increase was mainly due to revaluation of the Transaction (as defined herein), interest from short-term bank deposits and revaluation of non-marketable equity securities. 32 Basic and Diluted Income and Loss Per Share of Common Stock Basic and diluted income per share of common stock for the year ended December 31, 2023 was $0.14 per share, compared to a basic and diluted loss of $0.94 per share for the year ended December 31, 2022.
The increase was mainly due to equity awards granted to employees during the four month period ended December 31, 2021 and to new award grants during 2021. 30 Financial Income (Expense), Net Net financial income was $2,934,000 for the year ended December 31, 2022, compared to net financial income of $1,068,000 for the year ended December 31, 2021.
The increase was mainly due to interest on the Short-Term Borrowings (as defined herein). Financial Income, Net Net financial income was $22,894,000 for the year ended December 31, 2023, compared to $2,934,000 for the year ended December 31, 2022.
The increase in loss per share was due to a higher net loss and a higher number of weighted average shares of common stock in the four month period ended December 31, 2021 compared to the four month period ended December 31, 2020.
Weighted average shares of common stock outstanding used in computing diluted income (loss) per share of common stock for the year ended December 31, 2023 were 40,566,901 compared to 38,997,649 for the year ended December 31, 2022. The increase was mainly due to RSUs that vested during the year ended December 31, 2023.
We plan to continue to conduct clinical trials to show the effectiveness of our technology. On January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints. As a result, we have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate.
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.
Removed
Through our research and development efforts, we have developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other 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.
Added
As a result, we terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. In 2023, we completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters, such as BMI, baseline HbA1c and age, responded well to oral insulin.
Removed
However, we experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally. On the other hand, Oravax continues to develop its oral vaccine, the demand for which may be reduced if COVID-19 continues to abate.
Added
Based on this analysis, we are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
Removed
For information regarding the change in 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, see note 1 to our audited consolidated financial statements.
Added
Pursuant to the Scilex SPA, in exchange for the DIP Assumption and for the ability to credit the amounts assumed under the DIP Assumption in exchange for certain equity securities of Scilex owned by Sorrento, Scilex (i) issued to us (A) the Note, (B) the Closing Penny Warrant, and (C) the Subsequent Penny Warrants, and (ii) caused the Transferred Warrants to be transferred to us.
Removed
Revenues for the years ended December 31, 2022 and 2021 were both $2,703. Revenues for the four month periods ended December 31, 2021 and 2020 were both $904.
Added
In addition, on the Closing Date, Scilex reimbursed $1,910,000 of the Company’s Transaction expenses pursuant to the Scilex SPA.
Removed
Research and development expenses for the four month period ended December 31, 2021 increased by 31% to $9,037,000, compared to $6,889,000 for the four month period ended December 31, 2020.
Added
For further details, see “Item 1 – Business – Description of Business – Scilex Transaction.” On January 22, 2024, we entered into the JV Agreement with HTIT, pursuant to which, subject to the terms and conditions set forth in the JV Agreement, the parties will establish the JV based on Oramed’s oral drug delivery technology.
Removed
The increase was mainly due to an increase in expenses related to our Phase 3 and NASH clinical trials in addition to expenses related to in process research and development costs related to Oravax. Stock-based compensation expenses for the four month period ended December 31, 2021, were $649,000, compared to $171,000 for the four month period ended December 31, 2020.
Added
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 are currently working on to initiate a Phase 3 oral insulin trial in the United States.
Removed
In the years ended December 31, 2022 and 2021, the four month periods ended December 31, 2021 and 2020 and the year ended August 31, 2021, we did not recognize any research and development grants.
Added
For a comparison of our results of operations and financial condition for the year ended December 31, 2022 and the year ended December 31, 2021, see “Item 7.
Removed
Sales and marketing expenses for the year ended December 31, 2022 increased by 106% to $1,851,000, compared to $898,000 for the year ended December 31, 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.
Added
Revenues for the year ended December 31, 2023 decreased by 50% to $1,340,000, compared to $2,703,000 for the year ended December 31, 2022. The decrease was mainly due to recognition of revenues until the product submission date by HTIT in June 2023.
Removed
Sales and marketing expenses for the four month period ended December 31, 2021 were $898,000, compared to no expenses for the four month period ended December 31, 2020. The increase was mainly due to stock-based compensation expenses, salary related expenses and consulting expenses.
Added
This decrease was mainly due to performance equity awards that expired because they did not meet their performance conditions during the year ended December 31, 2023 and to awards that were granted and issued during the year ended December 31, 2022.
Removed
Stock-based compensation costs for the four month period ended December 31, 2021 were $579,000, compared to no stock-based compensation expenses during the four month period ended December 31, 2020. The increase was mainly due to equity awards granted to an employee during 2021.
Added
Based on this analysis, we are working on a protocol for a new Phase 3 clinical trial to be submitted to the FDA.
Removed
General and administrative expenses for the four month period ended December 31, 2021 increased by 109% to $3,295,000, compared to $1,576,000 for the four month period ended December 31, 2020. The increase was mainly due to an increase in stock-based compensation expenses and professional fees as well as public relations and investor relations expenses.
Added
Such approval is not required for the sale or export of any products resulting from such research or development.
Removed
Stock-based compensation costs for the four month period ended December 31, 2021 were $1,034,000, compared to $242,000 during the four month period ended December 31, 2020.
Added
We recorded sales and marketing income of $287,000 for the year ended December 31, 2023, compared to expenses of $1,851,000 for the year ended December 31, 2022. This was primarily due to termination of the employment of an executive officer, which led to the forfeiture of his unvested options and RSUs, resulting in a reversal of the previously recorded expense.
Removed
The increase is 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 $71,000 for the four month period ended December 31, 2021, compared to $237,000 for the four month period ended December 31, 2020.
Added
For the diluted earnings per share calculation, the weighted average number of shares outstanding during the year is adjusted for the average number of shares that are potentially issuable in connection with employee share-based payment, using the treasury stock method.
Removed
Basic and diluted loss per share of common stock for the four month period ended December 31, 2021 increased by 3% to $0.31, compared to $0.30 for the four month period ended December 31, 2020.
Added
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 conducted a strategic review process. As a result, we are currently incurring lower research and development and sales and marketing expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−1 removed2 unchanged
Biggest changeEntera shares are traded on Nasdaq in U.S. dollars, while DNA shares are traded on the Tel Aviv Stock Exchange in NIS. We are also exposed to changes in the market price of the Entera and DNA shares, as well as to exchange rates fluctuations in the NIS currency compared to the U.S. dollar with respect to the DNA shares.
Biggest changeWe are also exposed to changes in the market price of the Entera, DNA shares and the Closing Penny Warrants, as well as to exchange rates fluctuations in the NIS currency compared to the U.S. dollar with respect to the DNA shares. 36 Interest Rate Risk We invest a major portion of our cash surplus in bank deposits in banks in Israel.
If the U.S. dollar declines in value in relation to the NIS, it will become more expensive for us to fund our operations in Israel. In addition, as of December 31, 2022, we own net balances in NIS of approximately $1,854,000.
If the U.S. dollar declines in value in relation to the NIS, it will become more expensive for us to fund our operations in Israel. In addition, as of December 31, 2023, we own net balances in NIS of approximately $546,000.
Assuming a 10% appreciation of the NIS against the U.S. dollar, we would experience an exchange rate gain of approximately $206,000, while assuming a 10% devaluation of the NIS against the U.S. dollar, we would experience an exchange rate loss of approximately $169,000.
Assuming a 10% appreciation of the NIS against the U.S. dollar, we would experience an exchange rate gain of approximately $50,000, while assuming a 10% devaluation of the NIS against the U.S. dollar, we would experience an exchange rate loss of approximately $61,000.
The exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows: Year Ended December 31, Year Ended December 31, Four months ended December 31, Four months ended December 31, Year Ended August 31, 2022 2021 2021 2020 2021 Average rate for period 3.358 3.229 3.165 3.533 3.292 Rate at period-end 3.519 3.11 3.11 3.215 3.207 We do not use any currency hedging transactions of options or forwards to decrease the risk of financial exposure from fluctuations in the exchange rate of the U.S. dollar against the NIS.
The exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows: Year Ended December 31, 2023 2022 Average rate for period 3.69 3.358 Rate at period-end 3.627 3.519 We do not use any currency hedging transactions of options or forwards to decrease the risk of financial exposure from fluctuations in the exchange rate of the U.S. dollar against the NIS.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to a variety of risks, including changes in interest rates, foreign currency exchange rates, changes in the value of our marketable securities and inflation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to a variety of risks, including changes in interest rates, foreign currency exchange rates, changes in the value of our marketable securities and inflation. As of December 31, 2023, we had $9.1 million in cash and cash equivalents and $95.3 million in short term bank deposits.
However, our interest gains from future deposits may decline in the future as a result of changes in the financial markets. Foreign Currency Exchange Risk A significant portion of our expenditures, including salaries, clinical research expenses, consultants’ fees and office expenses relate to our operations in Israel.
The Note issued by Scilex is based on the SOFR rate. Our interest income may decline in the future as a result of a change in the SOFR rate. Foreign Currency Exchange Risk A significant portion of our expenditures, including salaries, clinical research expenses, consultants’ fees and office expenses relate to our operations in Israel.
Interest Rate Risk We invest a major portion of our cash surplus in bank deposits in banks in Israel. Since the bank deposits typically carry fixed interest rates, financial income over the holding period is not sensitive to changes in interest rates, but only the fair value of these instruments.
Since the bank deposits typically carry fixed interest rates, financial income over the holding period is not sensitive to changes in interest rates, but only the fair value of these instruments. However, our interest gains from future deposits may decline in the future as a result of changes in the financial markets.
Marketable securities are presented at fair value and their realization is subject to certain limitations if sold through the market, and we are therefore exposed to market risk.
Marketable securities We own 1,701,357 common shares of DNA, 117,000 ordinary shares of Entera and 4,500,000 Closing Penny Warrants, which are presented in our financial statements as marketable securities. Marketable securities are presented at fair value and their realization is subject to certain limitations if sold through the market, and we are therefore exposed to market risk.
Such policy further provides that we should hold most of our current assets in bank deposits. As of today, the currency of our financial assets is mainly in U.S. dollars. 35 Marketable securities We own 1,701,357 common shares of DNA and 117,000 ordinary shares of Entera, which are presented in our financial statements as marketable securities.
We aim to preserve our financial assets, maintain adequate liquidity and maximize return while minimizing exposure to market risks. Such policy further provides that we should hold most of our current assets in bank deposits. As of today, the currency of our financial assets is mainly in U.S. dollars.
Removed
As of December 31, 2022, we had $40.5 million in cash and cash equivalents, $111.5 million in short term and long term bank deposits and $3.7 million in marketable securities. We aim to preserve our financial assets, maintain adequate liquidity and maximize return while minimizing exposure to market risks.
Added
Entera shares and the Closing Penny Warrants are traded on Nasdaq in U.S. dollars, while DNA shares are traded on the Tel Aviv Stock Exchange in NIS.

Other ORMP 10-K year-over-year comparisons