ORAMED PHARMACEUTICALS INC. annual report, FY2022

Oramed Pharmaceuticals Inc. — 2022 Form 10-K

Business context and reporting period. Oramed is a clinical-stage pharmaceutical company developing oral delivery technology for insulin and other proteins. This report covers the 12 months ended December 31, 2022. The company changed its fiscal year from September–August to the calendar year; the audited statements also present a four-month transition period ended December 31, 2021 and a year ended August 31, 2021. Those periods are not directly comparable to the 2022 full year, and the filing text does not provide a clear, like-for-like annual comparison throughout.

Financial performance and position

Revenue was primarily recognized over time under the HTIT oral-insulin license agreement; there were no product sales and no cost of revenue. Accordingly, commercial product margins are not meaningful. Cash flows included $30.211 million provided by investing activities and $10.779 million provided by financing activities. Year-end liquidity also included $111.513 million of short-term deposits, $3.743 million of marketable securities and $2.700 million of long-term investment. No borrowings are reported; operating lease liabilities totaled $0.894 million.

Material changes, outlook and risks

• Oral insulin setback: Announced January 11, 2023, the ORA-D-013-1 Phase 3 trial failed to meet primary and secondary endpoints. Oramed terminated that trial and ORA-D-013-2 and began reviewing the data, its pipeline and strategic alternatives. This post-year-end event was treated as non-adjusting in the financial statements.
• Other programs: A 12-week NASH study reported safety and tolerability and consistent favorable trends in liver-fat measures; the company was evaluating next steps. Oravax reported preliminary positive Phase 1 safety and immunogenicity results for its oral COVID-19 vaccine Cohort A; Cohort B completed dosing in January 2023, with data expected in the first half of 2023.
• Funding and spending: Management said available resources and commitments were expected to support planned activity for at least 12 months, while cautioning that additional funding might be needed sooner. Expected clinical research obligations were approximately $21 million over three years, subject to change following the Phase 3 results and strategic review.
• Licensing uncertainties: Oramed disputes HTIT’s claims concerning $6 million of obligations; up to $2 million already received is deferred revenue potentially repayable, and up to $4 million in additional payments may not be received. The company is also evaluating the future of its Medicox Korea collaboration after the Phase 3 results; $2 million received from Medicox remained deferred at year-end.
• Key risks: Continued losses, financing and dilution needs, uncertain clinical and regulatory prospects, strategic-review execution, dependence on third-party suppliers and partners, intellectual-property protection, foreign-exchange exposure, and uncertainty about demand for Oravax’s vaccine. The company reported no material legal proceedings, an unqualified audit opinion, no critical audit matters, and effective disclosure controls and internal control over financial reporting.

Important facts for investors to verify

• Whether the oral-insulin data review identifies a viable development path, and the costs and timing of any revised program.
• Cash, deposits, investment liquidity and expected operating burn against management’s stated 12-month funding outlook.
• The status and potential financial resolution of the HTIT dispute and the future of the Medicox agreement.
• Oravax Cohort B results, further clinical plans and commercial demand for an oral COVID-19 vaccine.
• Changes to clinical commitments, strategic alternatives, and potential future financing or share dilution.
• The annual comparison basis: confirm period labels and figures against the audited statements because the fiscal-year change makes prior-period comparisons non-equivalent.