Oramed(ORMP) - 2022 Q3 - Quarterly Report

Financial Performance - Revenues for the nine months ended September 30, 2022, were $2.0 million, consistent with the same period in 2021[26] - Net loss for the nine months ended September 30, 2022, was $29.0 million, compared to a net loss of $17.5 million for the same period in 2021, indicating an increase of approximately 65.8%[26] - Basic and diluted loss per share for the nine months ended September 30, 2022, was $0.72, compared to $0.54 for the same period in 2021, an increase of approximately 33.3%[26] - Operating loss for the nine months ended September 30, 2022, was $30.9 million, compared to $18.5 million for the same period in 2021, reflecting an increase of approximately 66.7%[26] - Net loss for the nine-month period ended September 30, 2022, was $29,028,000, compared to a net loss of $17,508,000 for the same period in 2021[116] - Net financial income for the nine-month period ended September 30, 2022, was $1,930,000, compared to $1,031,000 for the same period in 2021[136] Assets and Liabilities - Total assets as of September 30, 2022, decreased to $164.4 million from $177.8 million as of December 31, 2021, representing a decline of approximately 7.9%[23] - Total stockholders' equity decreased to $153.8 million as of September 30, 2022, from $166.5 million as of December 31, 2021, a decline of about 7.6%[23] - Total current liabilities decreased to $6.5 million as of September 30, 2022, from $7.4 million as of December 31, 2021, a reduction of about 11.5%[23] - Long-term liabilities increased to $4.8 million as of September 30, 2022, from $3.8 million as of December 31, 2021, an increase of approximately 24.1%[23] - Cash and cash equivalents increased to $33.2 million as of September 30, 2022, from $27.5 million as of December 31, 2021, a growth of approximately 20.0%[23] - Cash and cash equivalents at the end of the period on September 30, 2022, were $33,196,000, down from $84,413,000 at the end of the same period in 2021[36] - The company incurred aggregate losses of $154,538,000 from inception through September 30, 2022, while raising a total of $248,769,000 through various stock offerings[142] Research and Development - Research and development expenses increased to $20.4 million for the nine months ended September 30, 2022, up from $15.5 million in the prior year, reflecting a rise of approximately 31.5%[26] - The company reported stock-based compensation of $8,961,000 for the nine months ended September 30, 2022, compared to $2,896,000 for the same period in 2021, indicating a significant increase in compensation expenses[36] - The company incurred $15,280 in research and development expenses under a CRO Services Agreement for its phase 3 clinical trial for oral insulin, with a total amended payment of $22,684[72] - The company recognized $7,357 in research and development expenses from another CRO Services Agreement for the same phase 3 clinical trial, with a total amended payment of $15,796[72] - Research and development expenses increased by 32% to $20,362,000 for the nine-month period ended September 30, 2022, compared to $15,452,000 for the same period in 2021[127] - Research and development expenses for the three-month period ended September 30, 2022, decreased by 12% to $5,347,000 compared to $6,086,000 for the same period in 2021[128] Financing Activities - The company had total net cash provided by financing activities of $6,604,000 for the nine months ended September 30, 2022, compared to $97,739,000 in the same period of 2021, reflecting a decrease in financing activities[36] - The company plans to seek additional financing through public or private equity markets to support future research and development activities[143] - The company issued 1,334,695 shares under the Cantor Equity Distribution Agreement, generating aggregate net proceeds of $19,664[86] - The company raised approximately $46,375 from a registered direct offering of 2,000,000 shares at $25.00 per share on November 5, 2021[86] Clinical Trials and Agreements - The company is conducting two Phase 3 trials for its oral insulin product, involving approximately 1,125 patients[99] - The first Phase 3 trial (ORA-D-013-1) completed enrollment in May 2022, with 710 patients recruited from over 90 clinical sites[103] - The second Phase 3 trial (ORA-D-013-2) aims to recruit 450 patients, with 50% enrolled as of July 2022[104] - Topline efficacy data for the ORA-D-013-1 trial is expected in January 2023, with a BLA filing anticipated in 2024 or 2025[105] - The company has experienced approximately six months of delays in clinical trials due to slow recruitment, with potential for further delays if the pandemic worsens[45] - The Phase 1 trial of Oravax's oral COVID-19 vaccine reported positive preliminary data, meeting primary and secondary endpoints of safety and immunogenicity[112] Revenue Recognition and Agreements - As of September 30, 2022, the company recognized revenue of $18,361 related to the HTIT License Agreement, with $682 recognized in the quarter ended September 30, 2022, and deferred revenue of $4,022[54] - The HTIT License Agreement includes a royalty rate of 10% on net sales of the related products, which may be reduced to a minimum of 8% if certain conditions are not met[59] - The company entered into a non-binding memorandum of agreement with Medicox Co., Ltd. for the exclusive distribution of ORMD-0801 in South Korea, with a non-refundable payment of $2,000 received[55] - The company has not recognized any royalty-related revenue to date, as it applies the sales-based royalty exception under ASC 606[53] Stock and Equity - The company’s balance of common stock increased from $38,564,000 as of June 30, 2022, to $39,113,000 as of September 30, 2022, reflecting ongoing capital activities[34] - The company’s total stockholders' equity as of September 30, 2022, was $153,147,000, a slight decrease from $153,697,000 as of June 30, 2022[34] - The company purchased Series B preferred stock of Diasome Pharmaceuticals for approximately $2,700,000, acquiring less than 5% of Diasome's outstanding stock[153] - The company’s investment in DNA represents approximately 1.4% of its outstanding ordinary shares as of September 30, 2022[82] Lease and Operating Expenses - The company has various operating leases, with operating right-of-use assets valued at $1,005 as of September 30, 2022[91] - Total undiscounted lease payments amount to $951, with a present value of lease liabilities at $900 as of September 30, 2022[91] - The annual lease payment for additional space in Israel is approximately $123, with a lease term of 60 months starting February 1, 2022[72] Market and Future Outlook - The company expects to submit a product for approval by June 2023 under the HTIT License Agreement[117] - The company expects to continue investing heavily in research and development, which will remain its major operating expense in the upcoming years[156] - The company is continuing to assess the impact of COVID-19 on its operations and development timeline[45]