Oramed Pharmaceuticals Inc. (Nasdaq:ORMP) has raised $4.6 million in a private placement. The company placed 658,144 shares at $7 per share. The net proceeds will be $4.2 million. The company's share price fell 6% on Thursday and Friday, following the announcement, to $6.81. giving a market cap of $49 million.
In late 2012, Oramed upgraded to the Nasdaq Capital Market, after being traded for five years on the Bulletin Board. In early June, it announced plans to raise $13 million, prompting a 36% drop in its share price that day. The share rebounded 59%, after the fundraising was cancelled.
Investors apparently did not favor a large-scale fundraising, despite Oramed's need for considerable capital to complete development of its insulin tablet. Investors apparently believed that the start of a Phase IIb clinical trial of the table, for which the capital is needed, would boost the company's market cap and allow it to raise capital at a higher value. The placement has boosted the company's cash reserves to $8.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on July 14, 2013
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