Oramed Pharmaceuticals Inc . (NASDAQ:ORMP), a biotech firm specializing in pharmaceutical preparations with a market capitalization of $92.7 million, has amended a key financial agreement, according to a recent SEC filing. InvestingPro analysis suggests the stock is currently trading below its Fair Value, with a strong financial health score of GOOD.
The company entered into an amendment on Monday, extending the maturity date of a Senior Secured Promissory Note with Scilex Holding Company and SCLX Stock Acquisition JV LLC.
The original promissory note, part of a September 21, 2023 agreement, was due to mature on March 21, 2025. With the amendment, the maturity date has been extended to December 31, 2025. The note, initially valued at $101,875,000, has seen repayments and refinances bring its current principal down to $7,675,000.
Notably, InvestingPro data shows the company maintains a robust current ratio of 27.08, with more cash than debt on its balance sheet. As part of the extension, Oramed will receive 3,250,000 shares of Scilex common stock from SCLX JV.
The amendment also modifies the definition of "Cash Sweep Financing" within the note, removing certain exclusions of indebtedness and allowing Oramed discretionary power over prepayment requirements. This includes directing repayments to either Tranche B Senior Secured Convertible Note holders or across all Tranche B Notes in proportion to each holder’s share.
Moreover, the amendment introduces a covenant to prevent increases in compensation or additional equity awards to any officers, directors, or senior management of Scilex or its subsidiaries while the note is outstanding.
This amendment reflects Oramed Pharmaceuticals' strategic financial management and its ongoing relationship with Scilex. The transaction details were disclosed in an 8-K filing with the SEC, which serves as the basis for this report. For deeper insights into Oramed's financial health and additional exclusive tips, visit InvestingPro, where subscribers can access over 8 key investment tips and comprehensive financial metrics.
In other recent news, Oramed Pharmaceuticals Inc. has seen significant developments in its financial agreements with Scilex Holding Company. Notably, the company received a $13.2 million payment from Scilex, which was applied towards a $15 million principal payment installment. This transaction increased the total repaid or refinanced amount of the original principal under the Tranche A Note to $94.2 million.
Oramed also secured an additional payment of approximately $1 million related to the Tranche A Note, reducing the outstanding balance to $80,200,000. In a strategic move, Oramed made a $2 million payment to Scilex, divided between an amortization payment due in 2025 and the purchase of warrants.
Furthermore, Oramed entered into a significant $11.5 million agreement with InClin, Inc. for essential services to a Phase 3 clinical trial. The trial aims to evaluate the safety and effectiveness of Oramed's investigational oral insulin capsule.
Regarding analyst notes, H.C. Wainwright maintains a Neutral rating for Oramed as the review process by China's National Medical (TASE:PMCN) Products Administration for Oramed's oral insulin candidate continues. These are the recent developments surrounding Oramed Pharmaceuticals Inc.
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