SCHEDULE 13D: Oramed Pharmaceuticals Acquires Significant Stake and Strategic Influence in Alpha Tau Medical with $36.9 Million Investment

Oramed Pharmaceuticals Inc. and its subsidiary Oramed Ltd. have acquired a 19.99% beneficial ownership in Alpha Tau Medical Ltd. through a $36.9 million share purchase and entered into a strategic investor relations and public relations services agreement.

Summary

• Oramed Pharmaceuticals Inc. and its wholly-owned subsidiary, Oramed Ltd., collectively acquired 14,110,121 Ordinary Shares of Alpha Tau Medical Ltd., representing 19.99% of the outstanding shares.
• The shares were purchased in a registered direct offering at a price of $2.612 per share, totaling approximately $36.9 million.
• The closing of the share purchase occurred on April 28, 2025.
• Concurrent with the share purchase, Oramed Ltd. entered into a three-year Strategic IR/PR Services Agreement with Alpha Tau Medical Ltd.
• Under the Strategic Services Agreement, Alpha Tau Medical will pay Oramed Ltd. a non-refundable fee of $3,000,000, with $500,000 paid upon execution and the remaining $2,500,000 in five equal installments every six months.
• Subject to shareholder approval, Alpha Tau Medical will also grant Oramed Ltd. warrants to purchase 2,390,000 Ordinary Shares at an exercise price of $3.90 per share and 847,000 Ordinary Shares at an exercise price of $3.474 per share.
• Oramed Ltd. will have the right to nominate two directors to Alpha Tau Medical's Board of Directors on or before the three-month anniversary of the closing date, subject to certain conditions.
• Alpha Tau Medical has agreed not to increase its Board of Directors beyond eight members without Oramed Ltd.'s prior written consent, as long as Oramed Ltd. owns at least 10% of outstanding shares or remains the largest shareholder.

Sentiment

Score: 8

Explanation: The document details a significant strategic investment and partnership, providing substantial capital and strategic services to Alpha Tau Medical, while Oramed gains a considerable stake and influence. This is generally positive for both entities, indicating confidence and potential for synergy.

Positives

• Oramed's significant investment of approximately $36.9 million provides substantial capital to Alpha Tau Medical.
• The acquisition of a 19.99% stake establishes Oramed as a major shareholder, indicating strong confidence in Alpha Tau Medical's future.
• The Strategic IR/PR Services Agreement will provide Alpha Tau Medical with comprehensive investor relations and public relations management, potentially enhancing its market visibility and investor engagement.
• Oramed's right to nominate two directors to Alpha Tau Medical's board suggests a strategic partnership and potential for synergistic oversight and guidance.
• The long-term nature of the Strategic Services Agreement (three years) and the board representation indicate a sustained commitment from Oramed.

Negatives

• The issuance of warrants to Oramed Ltd., totaling 3,237,000 shares, could lead to future dilution for existing Alpha Tau Medical shareholders if exercised.
• The Strategic Services Agreement includes a non-refundable fee of $3,000,000, which is a direct cash outflow for Alpha Tau Medical.

Risks

• Oramed Ltd. covenants not to engage in activities that could be perceived as market manipulation, churning, or attempts to artificially influence market activity or volumes; failure to comply would be a material breach.
• Non-compliance by Oramed Ltd. or its agents with applicable laws, regulations, and Alpha Tau Medical's internal policies (e.g., Anti-Bribery, Insider Trading) could result in a material breach of the Strategic Services Agreement.
• The warrants and warrant shares are restricted securities and cannot be resold unless registered under the Securities Act or an exemption is available, posing a liquidity risk for Oramed Ltd. if registration is delayed or not achieved.
• The effectiveness of the Strategic IR/PR Services is dependent on Oramed's ability to engage appropriate third parties and ensure their compliance with terms and policies.
• The right to nominate directors is subject to customary conditions, and there is no assurance that Oramed's nominees will be appointed or that their presence will yield expected benefits.

Future Outlook

The Reporting Persons intend to continuously review their investment in Alpha Tau Medical Ltd., considering factors such as the Issuer's business, financial condition, and market conditions. Future actions may include further acquisitions or disposals of shares, and engagement in discussions with Alpha Tau Medical's management, board, and shareholders regarding performance, strategic direction, capital allocation, shareholder value, board composition, and governance. They may also consider extraordinary corporate transactions, asset sales, changes in management or board, or alterations to capitalization or dividend policy.

Management Comments

• Avraham Gabay, Chief Financial Officer of Oramed Pharmaceuticals Inc. and Oramed Ltd., signed the Joint Filing Agreement and certified the Schedule 13D.
• Uzi Sofer, CEO of Alpha Tau Medical Ltd., and Nadav Kidron, Chief Executive Officer of Oramed Ltd., signed the Strategic IR/PR Services Agreement.

Industry Context

This transaction represents a strategic investment by Oramed Pharmaceuticals, a company focused on oral drug delivery, into Alpha Tau Medical, a company in the medical device sector, specifically in cancer treatment. This could signal a diversification or synergistic move for Oramed, leveraging its financial resources and potentially its network to support Alpha Tau's growth and market presence. The provision of IR/PR services by Oramed to Alpha Tau suggests a deeper, integrated partnership beyond a simple equity investment, potentially indicating a trend of larger biotech/pharma companies providing strategic support to smaller, innovative firms.

Comparison to Industry Standards

• NA The document primarily details a strategic investment and services agreement, not financial performance metrics of Alpha Tau Medical Ltd. or Oramed Pharmaceuticals Inc. that would allow for direct comparison to specific comparable companies, projects, or results within the industry.

Corporate Governance

Related Party Transactions

• Oramed Pharmaceuticals Inc. and its wholly-owned subsidiary Oramed Ltd. are filing this Schedule 13D jointly, acknowledging their relationship as Reporting Persons and that Oramed Pharmaceuticals Inc. may be deemed to beneficially own securities owned by Oramed Ltd.

Stakeholder Impact

• Shareholders of Alpha Tau Medical Ltd. will experience dilution from the issuance of new shares to Oramed Ltd. and potential future dilution from warrant exercises, but benefit from significant capital injection and strategic IR/PR services.
• Shareholders of Oramed Pharmaceuticals Inc. will see their company expand its investment portfolio and potentially gain strategic influence in a related medical technology sector.
• Employees of Alpha Tau Medical Ltd. may benefit from increased financial stability and enhanced market visibility, potentially leading to growth opportunities.
• Customers and suppliers of Alpha Tau Medical Ltd. may see improved stability and potentially expanded operations due to the new capital and strategic support.

Next Steps

• Oramed Ltd. has the right to nominate two persons to serve as directors on Alpha Tau Medical's Board of Directors on or before July 28, 2025 (three-month anniversary of closing).
• Alpha Tau Medical's shareholders must approve the issuance of warrants to Oramed Ltd. at an upcoming Annual General Meeting.
• Alpha Tau Medical is obligated to file a registration statement on Form F-3 (or other appropriate form) for the resale of the warrant shares by Oramed Ltd. within 60 calendar days of April 24, 2025.
• Alpha Tau Medical must use commercially reasonable efforts to cause the resale registration statement to become effective within 90 days (or 120 days in case of full SEC review) of April 24, 2025, and keep it effective until Oramed no longer owns warrants or warrant shares.

Key Dates

Recommendation

Keywords

Alpha Tau Medical, Oramed Pharmaceuticals, Oramed Ltd., Schedule 13D, Beneficial Ownership, Share Purchase Agreement, Strategic Investment, Investor Relations, Public Relations, Warrants, Board Nomination, SEC Filing, Pharmaceutical, Medical Device