10-K: Oramed Pivots to Investments, Advances Oral Insulin Trial

Oramed Pharmaceuticals Inc. reports a significant net income swing in 2025, driven by strategic investment revaluations and a new path for its oral insulin program.

Summary

• Reported a net income of $64,016,000 for the fiscal year ended December 31, 2025, a substantial improvement from a net loss of $19,103,000 in 2024.
• Generated $2,000,000 in revenue in 2025, primarily from the HTIT License Agreement, compared to no revenue in 2024.
• Financial income, net, surged to $89,454,000 in 2025, reversing a net financial loss of $2,286,000 in 2024, mainly due to revaluation of investments in Alpha Tau and Scilex.
• Transferred its Protein Oral Delivery (POD) technology platform and oral insulin program to Lifeward Ltd. via OraTech, receiving significant equity ownership, warrants, and revenue-sharing payments.
• Plans to initiate a 60-patient, US-based clinical trial for its oral insulin formulation in the second half of 2026, to be conducted by OraTech.
• Made strategic investments including a 17% stake in Alpha Tau Medical Ltd. for approximately $36,900,000, and an aggregate of 5.02% of Nano Dimension Ltd. shares for approximately $8,501,000 initially, with additional purchases post-year-end.
• Approved real estate investments up to $30,000,000, including a $22,650,000 loan to Project Hafasga Telefoniot HaHadasha Ltd. and a $1,523,000 profit-sharing loan to Rabi Binyamin 4 Tama 38 Ltd.
• Formed Corner Ally Ventures, a new venture capital fund focused on Israeli technology companies, committing up to $40,000,000 over four years.
• Repurchased and retired 1,725,733 shares of common stock for $4,739,000 during 2025.
• Declared a cash dividend of $0.25 per share, totaling $10,870,000, payable on January 26, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report. The significant net income driven by investment revaluations and the strategic divestment of the POD platform to Lifeward, while retaining a substantial equity stake and future revenue, are strong positives. However, the underlying operating loss and the risks associated with the financial health of key investees (Scilex, Lifeward) temper the overall sentiment.

Positives

• Achieved a significant net income of $64,016,000 in 2025, a substantial turnaround from the previous year's net loss.
• Realized strong financial income, net, of $89,454,000, primarily from favorable revaluations of investments in Alpha Tau and Scilex.
• Successfully executed a strategic transaction with Lifeward Ltd., transferring the POD technology platform and oral insulin program while securing a significant equity stake and future revenue-sharing payments, effectively de-risking direct R&D costs.
• Made a substantial investment in Alpha Tau Medical Ltd., a clinical-stage oncology company showing encouraging clinical progress and potential near-term regulatory approval in Japan.
• Diversified its investment portfolio by forming Corner Ally Ventures, a new venture capital fund focused on Israeli technology companies.
• Demonstrated commitment to shareholder returns through an active share buyback program, repurchasing 1,725,733 shares in 2025, and the declaration of a $0.25 per share cash dividend.
• Received $28,500,000 from Scilex for the repurchase of warrants, enhancing liquidity.
• Successfully repaid $69,200,000 of the Tranche A Note and $13,000,000 of the Tranche B Note from Scilex.

Negatives

• The ORA-D-013-1 Phase 3 trial for the oral insulin capsule did not meet its primary or secondary endpoints, leading to the discontinuation of T2D clinical activities for that specific trial.
• The joint venture agreement with Hefei Tianhui Biotech Co., Ltd. (HTIT) was terminated due to HTIT's failure to satisfy closing conditions.
• Working capital surplus decreased from $137,536,000 in 2024 to $114,185,000 in 2025.
• Cash and cash equivalents decreased from $54,420,000 in 2024 to $45,947,000 in 2025.
• Scilex Holding Company has disclosed substantial doubt about its ability to continue as a going concern, posing a risk to the remaining loan investments.
• Lifeward Ltd. has disclosed substantial doubt about its ability to continue as a going concern, which could negatively impact the value of the investment.
• General and administrative expenses increased by 35% to $8,720,000 in 2025.
• Tax expenses increased to $11,308,000 in 2025 from $3,183,000 in 2024.

Risks

• The strategic review process may not be successful or timely, potentially impacting shareholder value and employee morale.
• Strategic transactions may expose the company to operational and financial risks, including increased expenditures, unknown liabilities, higher integration costs, substantial debt, dilutive equity issuances, asset write-downs, and impairment of relationships.
• The ability to consummate strategic transactions depends on retaining key employees.
• Potential for securities and stockholder litigation, which could divert management attention and harm the business.
• The company has a history of losses and cannot assure future profitability.
• Reliance on patents to protect technology; patents may be challenged, invalidated, or circumvented, or the company may be liable for infringing on others' intellectual property.
• The new clinical trial for the oral insulin capsule faces risks and uncertainties, including potential for negative results, manufacturing difficulties, and market acceptance issues.
• Limited experience in conducting clinical trials and dependence on third-party CROs.
• Initial success in early-stage trials does not guarantee success in later stages or regulatory approval.
• Dependence on third-party suppliers for raw materials and services.
• No guarantee of return on investments in marketable securities (DNA, Entera, Nano, Alpha Tau, Pelthos).
• Risk of being deemed an investment company under the Investment Company Act of 1940, leading to additional costs and regulatory burdens.
• May not realize the full benefit from the distribution license agreement with Medicox.
• High dependence on collaborative partners to develop, commercialize, and market products.
• Intense competition in the biotechnology and biopharmaceutical industries.
• Exposure to product liability claims.
• Limited senior management resources and the need to obtain more to manage growth.
• Dependence on senior management and skilled personnel; their loss or unavailability could be a competitive disadvantage.
• Joint ventures may limit flexibility and expected benefits may not be realized.
• Fluctuations in interest rates could reduce income on loans and investments.
• Healthcare policy changes may harm future business.
• Exposure to fluctuations in currency exchange rates.
• Real estate investments involve market and liquidity risks, and potential loss of principal if unsecured or security is ineffective.
• Scilex Holding Company's inability to service its obligations under the notes and potential default could have a material adverse effect on the company's business.
• If Alpha Tau Medical Ltd. fails to achieve positive clinical results or obtain regulatory approvals, the value of the investment could decline materially.
• The value of the investment in Lifeward Ltd. may decline, and there is no guarantee Lifeward will be able to service its repayment obligations.
• Future sales of common stock by existing stockholders could adversely affect the stock price.
• Failure to maintain compliance with Nasdaq Capital Market listing requirements could result in delisting.
• The market price of common stock may fluctuate significantly.
• Future sales of common stock or issuance of senior/convertible securities could materially adversely affect the trading price and ability to raise funds.
• Stockholders may experience significant dilution as a result of any additional financing using equity securities.
• Operations in Israel expose the company to political, economic, and military risks, including ongoing conflicts and potential credit rating downgrades.
• Difficulty enforcing U.S. judgments or asserting U.S. securities laws claims in Israel.
• Changes to tax laws could have a negative effect.
• Business and operations could suffer in the event of computer system failures, cyber-attacks, or deficiencies in cybersecurity.
• Management has significant flexibility in using the net proceeds of any offering of securities.
• The stockholder rights plan (poison pill) includes terms and conditions which could discourage a takeover or other transaction that stockholders may consider favorable.

Future Outlook

The company intends to initiate a 60-patient, US-based clinical trial for its oral insulin formulation in the second half of 2026, with research and development expenses to be borne by OraTech. It will continue to evaluate strategic opportunities to enhance stockholder value and expects to need substantial additional financing. The initial closing for the Corner Ally Ventures fund is anticipated in Q3 2026. Lifeward Ltd. is expected to file resale registration statements for its shares and warrants within 75 days and 45 days (or 105/75 days with full SEC review) after closing, respectively. Alpha Tau Medical Ltd. is targeting completion of patient recruitment for its pivotal ReSTART trial in Q1 2026, with full PMA submission expected by year-end 2026, and initial results for other studies by year-end 2026.

Management Comments

• We intend to initiate, in the second half of 2026, a 60-patient, US-based clinical trial designed to validate the robustness of our oral insulin formulation in defined patient population.
• As part of our business strategy, we continuously review our existing pipeline and evaluate potential strategic opportunities to enhance stockholder value.
• We believe that prior execution challenges at Lifeward were driven primarily by strategy and management rather than the quality of the underlying technology. With a new strategic direction and leadership team in place, we believe Lifeward is well positioned to advance the oral insulin program and fully realize the value of its combined technology platforms, ultimately delivering meaningful growth and shareholder value.
• With interest rates expected to decline and valuations presenting favorable entry points, the Board believes these investments could provide long-term value appreciation and potential income streams, further strengthening our financial position.
• We believe it is imperative to attract and retain top talent for all positions in the Company.

Industry Context

StockSavvy.ai notes Oramed's strategic shift from direct pharmaceutical R&D to a diversified investment holding company with a focus on healthcare, life sciences, and real estate. This mirrors a trend among some biotech firms to de-risk their core pipeline by leveraging existing assets through partnerships or spin-offs, while seeking alternative revenue streams and capital appreciation from broader market opportunities. The divestment of the POD platform to Lifeward, a medical robotics company, positions Oramed to benefit from both the long-term potential of oral insulin and the established revenue streams of medical devices, a common strategy to balance high-risk R&D with more stable income. The entry into venture capital and real estate further diversifies its portfolio, moving beyond a pure-play biotech model. The diabetes market overview highlights the growing global burden of diabetes, suggesting a large potential market for effective oral insulin, despite the competitive landscape dominated by injectables and GLP-1 agonists. Alpha Tau's progress in oncology also aligns with the high-growth potential of targeted cancer therapies.

Comparison to Industry Standards

• The filing does not provide explicit comparisons of Oramed's financial or operational performance to specific industry benchmarks or comparable companies in the pharmaceutical, medical device, or investment sectors.
• Alpha Tau Medical Ltd.'s clinical development progress is described as 'encouraging' across multiple cancer types, with 'interim data showing disease control and early signals of clinical benefit,' but no specific industry-wide success rates or competitor trial results are provided for direct comparison.
• StockSavvy.ai notes that Oramed's diversified investment strategy, including significant allocations to real estate and venture capital, represents a departure from a typical pharmaceutical company's business model, making direct industry comparisons for the overall business challenging.

Management Changes

Corporate Governance

Legal Proceedings

• The company is a party to litigation and subject to claims incident to the ordinary course of business from time to time.
• Future litigation may be necessary to defend proprietary rights or establish new ones.

Related Party Transactions

• Consulting agreement with KNRY Ltd. (owned by Dr. Miriam Kidron, Chief Scientific Officer) for her services, with a monthly fee of NIS 71,648 (effective January 1, 2026).
• Employment agreement with Dr. Miriam Kidron for services to Oramed Ltd., with a gross monthly salary of NIS 55,114 (effective January 1, 2026).
• Consulting agreement with Shnida Ltd. (owned by Nadav Kidron, President and Chief Executive Officer) for his services, with a monthly fee of NIS 118,587 (effective January 1, 2026).
• Employment agreement with Nadav Kidron for services to Oramed Ltd., with a gross monthly salary of NIS 63,186 (effective January 1, 2026).
• Employment agreement with Joshua Hexter (Chief Operating and Business Officer), with a gross monthly salary of NIS 86,761 (effective January 1, 2026).
• Employment agreement with Avraham Gabay (Chief Financial Officer), with a gross monthly salary of NIS 44,880 (effective January 1, 2026).
• Investment in Alpha Tau Medical Ltd. (17% stake) where Oramed Ltd. has the right to nominate two directors.
• Loan agreement with Project Hafasga Telefoniot HaHadasha Ltd. and Tova Hochma Im Nachala Ltd., where Oramed Ltd. and Tova Hochma Im Nachala Ltd. are co-lenders, with Oramed acting as the lead lender.
• RoyaltyVest Ltd. is an equity method investee, with Oramed Pharmaceuticals Inc. holding a 50% equity interest.

Stakeholder Impact

• Shareholders: Positive impact from net income, cash dividend, and share buyback program. Potential for long-term value from strategic investments and the oral insulin program. Risk of dilution from future equity raises and stock price volatility due to strategic shifts and clinical trial outcomes. The poison pill could deter favorable takeovers.
• Employees: Potential for attrition and reduced morale due to cash conservation activities and the strategic review process. Importance of retaining key personnel. Compensation includes stock-based awards.
• Customers: Potential future benefit from the oral insulin capsule if successfully developed and commercialized.
• Creditors: Scilex Holding Company and Lifeward Ltd.'s 'going concern' doubts pose risks to Oramed's loan investments.
• Suppliers: Dependence on third-party suppliers for raw materials and services, with risks if they fail to perform.

Next Steps

• Initiate a 60-patient, US-based clinical trial for oral insulin formulation in H2 2026, conducted by OraTech.
• Lifeward Ltd. to file a resale registration statement with the SEC covering Lifeward Ordinary Shares issued in the Share Purchase Transaction and those issuable upon exercise of warrants, no later than 75 days after closing (or 105 days with full SEC review).
• Lifeward Ltd. to file a resale registration statement with the SEC covering Lifeward Ordinary Shares issuable upon conversion of the Notes and exercise of related warrants within 30 days after the Initial Closing, and to use commercially reasonable efforts to have it effective within 45 days (or 75 days with full SEC review).
• Corner Ally Ventures' initial closing is expected in Q3 2026.
• Continue to evaluate business strategy, including potential structural changes, and strategic opportunities to enhance stockholder value.
• Engage in discussions with Nano Dimension Ltd.'s management and shareholders regarding performance, strategic direction, board composition, and shareholder value.
• Pursue value-enhancing activities in connection with the land acquired in Mevaseret Zion, Israel.
• Alpha Tau Medical Ltd. targeted completion of patient recruitment for its ReSTART Pivotal Trial in Q1 2026, with full PMA submission expected by year-end 2026.
• Alpha Tau Medical Ltd. targeting completion of patient accrual for its IMPACT Study by the end of Q1 2026, with initial results expected by year-end 2026.
• Alpha Tau Medical Ltd. expects initial results for its GBM Feasibility Study around the end of Q4 2026.
• Alpha Tau Medical Ltd. is anticipating a response from Japan's Ministry of Health, Labour and Welfare regarding Alpha DaRT approval for recurrent head and neck cancer.
• Alpha Tau Medical Ltd. is equipping its Hudson, New Hampshire facility for Alpha DaRT manufacturing to support commercial readiness and scale-up operations.

Key Dates

Recommendation

The company has demonstrated a strong financial turnaround in 2025, primarily driven by successful investment revaluations and a strategic pivot. The divestment of the POD platform to Lifeward, coupled with a significant equity stake and revenue-sharing, offers a balanced approach to realizing value from its core technology while diversifying into revenue-generating medical robotics. New investments in oncology (Alpha Tau) and venture capital (Corner Ally Ventures) further enhance long-term growth potential. However, the underlying operating loss, the 'going concern' risks associated with key investees (Scilex, Lifeward), and the inherent uncertainties of clinical trials and real estate investments warrant a cautious approach. The stock buyback and dividend are positive for shareholders, but the overall strategy is still in transition and carries execution risks. A 'Hold' recommendation reflects the balance between the positive strategic shifts and financial gains against the significant inherent risks and ongoing uncertainties.

Keywords

Pharmaceuticals, Oral Insulin, Biotechnology, Drug Development, Clinical Trials, Oncology, Medical Devices, Real Estate Investment, Venture Capital, SEC Filing, 10-K, Oramed, ORMP, Alpha Tau, Scilex, Lifeward, Diabetes, Cancer Therapy, Corporate Governance, Financial Reporting, Investment Strategy