8-K: Oramed Repurchases Shares, Terminates JV, Advances Oral Insulin

Oramed Pharmaceuticals repurchased shares, terminated a joint venture, and announced progress in its oral insulin program and diversified investment portfolio.

Summary

• Oramed Pharmaceuticals Inc. repurchased 1,155,367 shares of its common stock from Hefei Tianhui Biotech Co., Ltd. (HTIT Biotech) at $2.23 per share, totaling $2,576,468.41. The shares have been cancelled and retired.
• The joint venture agreement with HTIT Biotech, established in January 2024 for oral drug delivery technology, was terminated on October 23, 2025, due to HTIT's inability to satisfy closing financial conditions.
• The company will continue its oral insulin development program independently, focusing on high-responder subgroups identified from Phase 2 and Phase 3 data, which showed potential for over 1% HbA1c reduction.
• A new 60-patient, US-based trial is being initiated to validate the oral insulin formulation and gather data for potential partners.
• Oramed's diversified investment portfolio has generated significant returns, with total cash and assets growing from $155.7 million in January 2023 to approximately $210 million as of September 30, 2025, despite investing $17.8 million in R&D and share buybacks.
• Key investments include Scilex Holdings (expected total returns up to $170 million), Alpha Tau Medical Ltd (a $27.1 million gain on a $37.7 million investment), BioXcel Therapeutics, Inc. (realized $6.25 million from a $7 million investment), and Pelthos Therapeutics Inc. (a 180% gain on a $1.5 million investment).
• The company also holds approximately $32.4 million in real estate and real estate-collateralized loans.
• Oramed reaffirmed its commitment to rewarding shareholders, including plans for a one-time dividend, despite the JV termination.

Sentiment

Score: 8

Explanation: Despite the termination of the JV, the company has demonstrated strong financial management, significantly growing its cash and assets through a diversified investment strategy. The independent advancement of the oral insulin program with a focused trial design and promising subgroup data provides renewed optimism for its core asset. The commitment to a dividend further enhances shareholder value.

Positives

• Successful share repurchase of 1,155,367 shares at $2.23 per share, totaling $2,576,468.41, leading to cancellation and retirement of shares.
• Oral insulin program is advancing independently, focusing on high-responder subgroups with potential for over 1% HbA1c reduction.
• Initiation of a new 60-patient, US-based trial for oral insulin, designed for cost-effectiveness and rapid data generation.
• Diversified investment portfolio has generated substantial returns, increasing total cash and assets from $155.7 million in January 2023 to approximately $210 million as of September 30, 2025.
• Scilex Holdings investment has returned $95.5 million to date, with additional expected returns of over $60 million and ongoing royalties for 9 years, potentially reaching $170 million.
• Alpha Tau Medical Ltd investment shows a $27.1 million gain, with the position valued at $64.8 million as of September 30, 2025, on a total investment of $37.7 million.
• Pelthos Therapeutics Inc. investment realized a 180% gain, with a current valuation of $4.2 million on a $1.5 million investment.
• Commitment to rewarding shareholders, including plans for a one-time dividend.
• Strategic capital deployment has led to significant value creation.

Negatives

• Termination of the joint venture agreement with Hefei Tianhui Biotech Co., Ltd. due to HTIT's inability to satisfy closing financial conditions.
• The preliminary financial information as of September 30, 2025, is unaudited and subject to future adjustment and reconciliation, and should not be unduly relied upon for investment decisions.

Risks

• Risks and uncertainties related to the progress, timing, cost, and results of clinical trials and product development programs.
• Difficulties or delays in obtaining regulatory approval for drug candidates.
• Competition from other pharmaceutical or biotechnology companies.
• Market volatility affecting the company's investment portfolio.
• Ability to realize expected returns from Scilex and other investments.
• Ability to identify and execute partnerships.

Future Outlook

The company plans to independently advance its oral insulin program, initiating a 60-patient US-based trial to validate its formulation and gather data for potential partners. It anticipates significant additional returns from its Scilex Holdings investment, potentially reaching $170 million, and expects further value creation from its diversified biomedical investment portfolio. Oramed is actively pursuing new strategic partnerships and growth initiatives, leveraging its expertise to unlock market potential in portfolio companies. The company remains committed to rewarding shareholders, including plans for a one-time dividend.

Management Comments

• "I am pleased to share with you some of the significant developments we have seen across Oramed's operations and strategic initiatives."
• "Over the past year, we have advanced our core programs while simultaneously building a diversified portfolio of opportunities that demonstrate our commitment to creating long-term shareholder value."
• "We believe this approach will allow us to validate the robustness of our oral insulin formulation while providing valuable data to potential partners."
• "We believe Alpha Tau represents an exceptional long-term opportunity with multiple transformative clinical and commercial inflection points ahead."
• "We believe their revolutionary alpha radiation therapy technology positions them for significant value creation as they advance through pivotal clinical milestones and move toward commercialization across multiple indications."
• "While we have decided to continue our oral insulin program independently without the spin-off, we remain committed to rewarding our shareholders."
• "We believe Oramed stands at a unique inflection point, with our core oral insulin program showing renewed promise through our refined subgroup analysis while our investment portfolio demonstrates our ability to identify and capitalize on emerging opportunities."
• "We believe our multi-faceted approach, combining clinical development, partnerships, and prudent capital deployment across diversified assets, positions us to create sustainable value across diverse market opportunities."

Industry Context

Oramed's independent advancement of its oral insulin program, following the termination of a joint venture, positions it as a niche player in the competitive diabetes treatment market, focusing on specific high-responder patient subgroups. This strategy aims to de-risk development and attract new partners. Simultaneously, its aggressive diversification into biomedical investments like cancer therapy (Alpha Tau), AI-driven drug discovery (BioXcel), and novel drug delivery platforms (Pelthos) reflects a broader trend among biotech companies to leverage capital and expertise beyond their core pipeline, seeking value creation through strategic investments and partnerships in high-growth areas of the life sciences sector. The focus on "platform technology pioneer in the field of oral delivery solutions" also aligns with industry efforts to improve patient convenience and adherence for injectable drugs.

Comparison to Industry Standards

• The identified high-responder subgroups for oral insulin showing potential for over 1% HbA1c reduction is a clinically meaningful outcome, which is a standard benchmark for efficacy in diabetes treatments.
• The company's strategy to initiate a 60-patient, US-based trial for oral insulin is a common approach in early-stage clinical development to validate findings and generate data efficiently before larger, more costly trials.
• The investment in Alpha Tau Medical Ltd., a company pioneering Alpha DaRT technology for cancer treatment, aligns with the industry's pursuit of innovative, localized radiation therapies to minimize damage to healthy tissue, a key differentiator in oncology.
• The investment in BioXcel Therapeutics, Inc., which leverages artificial intelligence for drug development, reflects a growing industry trend towards AI/ML integration to accelerate drug discovery and identify novel therapies in neuroscience and immuno-oncology.
• Pelthos Therapeutics Inc.'s focus on novel drug delivery platform technologies is consistent with broader pharmaceutical industry efforts to enhance drug efficacy, reduce side effects, and improve patient compliance through advanced delivery systems.
• The company's ability to grow total cash and assets from $155.7 million to $210 million in less than three years, while investing in R&D and share buybacks, demonstrates effective capital management, which is a critical performance indicator compared to peers in the capital-intensive biotech sector.

Related Party Transactions

• The share repurchase agreement was entered into with Hefei Tianhui Biotech Co., Ltd. (HTIT Biotech), a former joint venture partner.
• The joint venture agreement was terminated with HTIT Biotech and its subsidiary, Technowl Limited.

Stakeholder Impact

• Shareholders: Positive impact from the share repurchase (reducing outstanding shares), commitment to a one-time dividend, and significant appreciation in the diversified investment portfolio leading to increased total cash and assets. The independent continuation of the oral insulin program also provides clarity and potential for future value.
• Employees: No direct impact mentioned, but continued R&D and growth initiatives suggest stability and potential for future opportunities.
• Customers/Patients: Potential future benefit from the continued development of oral insulin, offering a non-injectable treatment option for diabetes.
• Partners (HTIT Biotech): Negative impact due to the termination of the joint venture agreement and the sale of their shares back to Oramed.
• Investment Portfolio Companies (Scilex, Alpha Tau, BioXcel, Pelthos): Continued strategic involvement and potential for Oramed to leverage its network and expertise to shape their growth trajectories.

Next Steps

• Initiate a 60-patient, US-based trial for the oral insulin program.
• Continue to advance the refined oral insulin program independently.
• Identify and execute on potential opportunities for strategic partnerships.
• Provide a one-time dividend to shareholders.
• Share more detailed updates on progress in the coming quarters.

Key Dates

Recommendation

The company has demonstrated exceptional capital allocation and strategic foresight by transforming its financial position from $155.7 million in cash post-Phase 3 failure to approximately $210 million in total cash and assets, while simultaneously investing in R&D and share buybacks. The diversified investment portfolio has yielded substantial returns and continues to hold significant upside potential. The independent advancement of the oral insulin program, focusing on high-responder subgroups with a new, targeted clinical trial, provides a clear path forward for its core asset. The commitment to a one-time dividend further underscores management's focus on shareholder value. These factors, combined with active pursuit of new partnerships, suggest a strong growth trajectory and undervaluation.

Keywords

Oramed Pharmaceuticals, ORMP, SEC filing, 8-K, share repurchase, oral insulin, diabetes, clinical trial, investment portfolio, biotech, pharmaceutical, Alpha Tau Medical, Scilex Holdings, BioXcel Therapeutics, Pelthos Therapeutics, joint venture, financial results