Battle between Chinese investors puts Oramed on the cusp of a $50M deal

Oramed Pharmaceuticals ($ORMP) has found itself at the center of a tug of war between Chinese investors. Days after Guangxi Wuzhou Zhongheng Group revealed it was edging toward a $52 million (€47 million) deal, Oramed said a pair of other Chinese financiers are now in the box seat.

At the end of a fast-moving few days, Oramed emerged with a nonbinding letter of intent outlining a $50 million deal with Sinopharm Capital Management and Hefei Life Science & Technology Park Investments and Development. If the deal goes ahead in its current form, Oramed will outlicense the rights to its oral insulin ORMD-0801 in China to Sinopharm and Hefei in return for up to $38 million, a little less than half of which it will receive upfront. The remaining $20 million is tied to milestones around the completion of a Phase IIb trial of ORMD-0801.

Jerusalem, Israel-based Oramed has also bagged itself $500,000 in return for giving the Chinese pair an exclusive 60-day window in which to iron out a deal and will sell around 10% of its shares to the investors for $12 million. News of the exclusivity window emerged just days after Wuzhou said it was on the cusp of striking a deal with Oramed. Wuzhou has been pursuing Oramed for more than 6 months--it made a $5 million equity investment in November--but now appears to have lost out in the race to snag the rights to sell ORMD-0801 in China.

The interest from China--which is looking down the barrel of an almighty diabetes problem--is a boon for Oramed during a difficult time for the business. Shares in the company rose 23% in the days after Wuzhou revealed its interest but were still down 29% over the past 12 months. A formulation issue cast a shadow over Phase IIa data presented at the start of last year, but Oramed has pushed into a Phase IIb study nonetheless. Money has been tight, though. At the end of the last quarter, Oramed had less than $4 million in cash, plus $12.5 million in short-term deposits.

At the time, Oramed said the sum should be sufficient to see it through at least the next 12 months. Finalizing the deal with Sinopharm and Hefei will extend Oramed's operating runway, setting it up to continue advancing ORMD-0801. The drug uses Oramed's delivery technology to protect insulin from the acidity and enzyme activity found in the gut before ushering its cargo across the intestinal wall.

- read the release
- here's Globes' take
- and FierceDrugDelivery's article

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