In addition to industry (Makhteshim Agan), food (Tnuva Food Industries Ltd.), and finances (The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5)), Chinese investors are also zeroing in on the Israel biomedical sector. Following investments in Israeli companies Check-Cap (Nasdaq: CHEK) and EndyMed Ltd. (TASE: ENDY), and the acquisitions of Alma Lasers and Yokneam-based Lumenis, Oramed Pharmaceuticals Inc. (Nasdaq:ORMP) today reported the signing of a non-binding letter of intent for an investment in the company by two Chinese concerns: Sinopharm Capital Management, one of the leading Chinese pharmaceutical investment companies, and Hefei Life Science & Technology Park Investments and Development Co., which invests in young companies, and which also owns an insulin manufacturing plant. Oramed is developing an orally administered insulin pill.
In return for a $50 million investment in the company ($30 million immediately and $20 million assuming that the company achieves good results in its current Phase IIb trial), the investors will receive 10% of the company and an exclusive license to market its product in China. The investors will be responsible for financing whatever is needed to obtain approval for the product, and if it is approved, also for setting up a manufacturing plant and marketing apparatus in China.
The share lost 68% over the past year
Oramed's market cap is $80 million, after a 19% jump in the share price since Thursday, when a different Chinese investment group, Wuzhou, announced that it was likely to sign a licensing deal of similar size with the company. It appears that this Chinese concern competed with Sinopharm and Hefei, with Oramed eventually choosing the latter two companies. Wuzhou today announced that contacts were being broken off.
Oramed was founded in 2006 by CEO Nadav Kidron on the basis of technology developed by Dr. Miriam Kidron, his mother, a doctor at Hadassah Medical Center. The company began by merging with a Wall Street stock exchange shell, which acquired the patents from Hadasit - the Technology Transfer Company of Hadassah Medical Organization . The company marked time on the OTC exchange for a few years. Following the breakthrough by companies like Pluristem Therapeutics Ltd. (Nasdaq:PSTI; TASE: PLTR) from the Nasdaq secondary list, Oramed decided that it could do the same, and achieved its goal in 2013. Since then, the company has grabbed the attention of analysts covering the oral insulin field, which also includes several other companies, among them major firms like Danish firm Novo Nordisk.
Oramed's insulin pill gives a less accurate and immediate dosage than an injection, and is therefore designated for sub-markets of patients: adult diabetes patients whose disease has not yet reached the stage where they are classified as insulin dependent, but who can be helped by a regular low dosage of insulin during the day, and patients with more severe cases who wish to replace some of the insulin they take with pills, followed by taking an accurate dosage by injection after each meal.
The Oramed share has lost 68% of its value over the past year, but has been on an upsurge in recent months. Since hitting a low point in March of this year, the share has climbed 85%. The company is in Phase II trials of its leading product, and has $25 million in the bank, following financing rounds from the public.
Published by Globes [online], Israel business news - www.globes-online.com - on July 7, 2015
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