Zacks Small Cap Research – ORMP: Multiple Potential Applications for Proprietary Oral Protein Delivery Platform – Earn Charter

By M. Marin



JV with HTIT to help commercialize assets…

Oramed Pharmaceuticals (NASDAQ:ORMP) entered into an agreement with Hefei Tianhui Biotech earlier this month to establish a joint venture (JV) based on Oramed’s oral drug delivery technology focused on developing and commercializing innovative products based on Oramed’s oral insulin and POD™ (Protein Oral Delivery) pipeline globally, leveraging HTIT’s manufacturing capabilities and technologies.

HTIT is a high-tech company focused on biopharmaceutical product manufacturing and R&D with an emphasis on the oral delivery of therapeutic macromolecules. HTIT operates an oral insulin manufacturing facility located in Hefei, China. Oramed and HTIT will be 50%/50% JV partners and have equal representation on the JV board. HTIT and Oramed are expected to make initial investments of $70 million and $20 million, respectively. Oramed’s contribution will consist of $10 million in cash and $10 million in ORMP shares. HTIT has an option to increase its investment in the JV by an incremental up to $20 million and increase its stake and board representation. In exchange for contributing the assets under developing in its pipeline, Oramed will be entitled to a 3% royalty on gross revenues of these assets.

… include oral insulin diabetes treatment…

Oramed recently completed an analysis of the data from its terminated ORA-D-013-1 Phase 3 trial. Oramed learned that subpopulations of patients with pooled specific parameters, responded well to oral insulin. The subpopulation included patients, such as body mass index (BMI), baseline HbA1c, age, gender and body weight. These subsets exhibited an over 1% placebo adjusted, statistically significant, reduction in HbA1c. Following these results, ORMP is evaluating if there is a path to continue to advance its oral insulin candidate, as well as other assets in its existing pipeline. We view the HTIT JV as a strategic initiative to move assets forward.

… with the Oramed / HTIT JV expected to launch a Phase 3 oral insulin trial in the U.S…

The Oramed / HTIT JV is expected to launch a Phase 3 oral insulin trial in the U.S. HTIT has completed a Phase 3 oral insulin clinical trial in China and, based on the results, submitted a marketing authorization application to China’s regulatory body, the National Medical Products Administration. The Phase 3 trials of oral insulin in type 2 diabetes (T2D) in China were conducted under a differentiated study protocol. The company believes these steps further its ability to commercialize ORMD-0801 in China with HTIT.

The company believes there is significant opportunities for an oral insulin treatment in China. About 10% of the adult population in China have diabetes, according to the World Health Organization (WHO), which noted in 2016 that:

“In 1980, less than 5% of Chinese men had diabetes. Now, more than 10% do. This increase has been largely driven by unhealthy lifestyles – diets that are too high in sugar and fat, and people not getting enough physical activity… Even more startling is the fact that almost half of all adults in China – close to 500 million people – have prediabetes. Not only does this pose a risk factor for developing Type 2 diabetes, but also for other conditions such as cardiovascular disease.”

Opportunity to advance oral COVID vaccine with ongoing regular COVID vaccines expected?

In addition, Oramed is also studying potential opportunities to advance its assets for (nonalcoholic steatohepatitis (NASH), and obesity, as an appetite suppressant, and a COVID vaccine, among other possible applications. In terms of COVID vaccines, through a JV (joint venture) with India-based Premas Biotech, the company is developing an orally administered vaccine for the COVID-19 virus. Oramed is the largest shareholder of the JV, Oravax Medical, which will leverage Oramed’s proprietary POD™ oral delivery technology and Premas Biotech’s novel vaccine technology. If clinical trials are successful, Oravax intends to launch and commercialize its oral COVID-19 vaccine. Public health organizations have indicated that people are likely to require a booster on a regular basis. The CDC notes that,

“Vaccination remains the best protection against COVID-19-related hospitalization and death. Vaccination also reduces your chance of suffering the effects of Long COVID, which can develop during or following acute infection and last for an extended duration.…

The virus that causes COVID-19 is always changing, and protection from COVID-19 vaccines declines over time. Receiving an updated COVID-19 vaccine can restore protection and provide enhanced protection against the variants currently responsible for most infections and hospitalizations in the United States.”

While the company had previously indicated that the oral COVID vaccine would primarily be earmarked for markets outside the U.S., depending on receiving regulatory approvals, the need for ongoing vaccinations against the disease is a global one. The World Health Organization (WHO), which expects that people will require annual booster shots similar to their annual flu shots. In fact, the National Bureau of Economic Research (NBER) notes that,

“The global COVID-19 vaccination campaign is the largest public health campaign in history, with over 2 billion people fully vaccinated within the first 8 months. Nevertheless, the impact of this campaign on all-cause mortality is not well understood. Leveraging the staggered rollout of vaccines, we find that the vaccination campaign across 141 countries averted 2.4 million excess deaths, valued at $6.5 trillion.”

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