By M. Marin
NASDAQ:ORMP
READ THE FULL ORMP RESEARCH REPORT
Transaction enables exposure to both oral drug delivery program & medical device businesses
Oramed Pharmaceuticals (NASDAQ:ORMP) recently signed a binding agreement for a transformative strategic transaction with Lifeward Ltd and another accredited investor. Lifeward is a medical device company focused on devices to aid physical rehabilitation and recovery. Its initial products were robotic exoskeletons, including the ReWalk Personal and ReWalk Rehabilitation Exoskeleton for people with spinal cord injury (SCI). Lifeward has subsequently expanded its focus organically and through strategic transactions. For example, this week Lifeward announced its intention to acquire certain technology assets from Skelable Ltd., the developer of a robotic upper body orthotic device with AI capabilities.
Moreover, Lifeward’s President and CEO, Mark Grant, has extensive experience in pharma, specifically focusing on diabetes, which has been ORMP’s historical focus of clinical development activities. He has more than 25 years of healthcare and medical technology experience, including serving as VP of the Americas for Medtronic’s diabetes business, exceeding $1.5 billion in annual revenue, as well as diabetes-focused roles at Bristol Myers Squibb, according to the company. Arguably, his experience and existing relationships in the space could potentially enable synergies with ORMP’s clinical development efforts and were likely an important factor in advancing this deal, in our view.
Oramed will invest in LFWD and potentially get a 49.9% beneficial ownership interest in Lifeward, subject to satisfaction of certain conditions. Lifeward will issue $10 million of 8% senior secured convertible notes in a private placement and an additional $10 million of 8% senior secured convertible notes based on hitting certain commercial milestones. Oramed will be the primary participant in both issuances, investing $9 million in each with 100% warrant coverage. When/if the notes are fully converted and the warrants exercised, ORMP ownership in Lifeward will increase significantly.
Oramed believes Lifeward’s product portfolio is positioned for strong growth and that this transaction can enhance shareholder value by retaining participation in the oral drug delivery program and innovations and enabling participation in a medical robotics company. According to Lifeward, the up to $47 million strategic investment from Oramed and the other investor through equity, convertible notes, milestone-based funding, and warrant coverage is intended to give Lifeward a cash runway to profitability and diversify its portfolio across MedTech and BioTech.
Specifically, Oramed will transfer its proprietary Protein Oral Drug POD™ delivery technology to Lifeward. Oramed is expected to fund and manage the upcoming anticipated trial under a clinical trial management agreement. Oramed will receive 4% on net sales of the ReWalk franchise for up to 10 years. Lifeward cites ReWalk as its flagship product line. In 2024, Lifeward generated $25.7 million in revenue, up about 85% from $13.9 million in 2023.
Moving forward with clinical activities…
Oramed intends to continue advancing its clinical efforts around its POD and assets. ORMP targets initiating a 60-patient, US-based clinical trial evaluating lead asset ORMD-O801 following its analysis of earlier Phase 2 and Phase 3 data that identified high-responder subgroups demonstrating encouraging results. The clinical trial will be designed to incorporate takeaways from previous clinical studies in order to focus on key patient subpopulations that have responded in prior activities, as mentioned above. ORMP hopes to leverage its analysis in order to optimize the potential for successful outcomes to advance its oral insulin therapy in diabetes management.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.