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ORAMED PHARMACEUTICALS INC. (ORMP)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 delivered a narrower loss per share ($0.18) versus prior year ($0.21) on stable, recognition-based revenue ($0.682M), with improved quarterly net loss versus Q2 and Q1 as R&D spending moderated .
  • Cash and investments totaled approximately $160.0M at quarter-end (cash $33.196M, short-term deposits $121.119M, marketable securities $5.234M), supporting Phase 3 oral insulin trial milestones and runway for multiple programs .
  • Strategic and clinical updates: positive Phase 2 NASH data, initial positive Phase 1 oral COVID-19 vaccine results, and a definitive distribution license with Medicox in Korea (up to $18M milestones, up to 15% royalties) during the quarter’s window .
  • Key catalyst: topline data from the first Phase 3 oral insulin trial expected in January 2023; management emphasized strong positioning and upcoming milestones as stock reaction drivers .

What Went Well and What Went Wrong

What Went Well

  • “Strong quarter filled with important milestones” per CEO, including positive Phase 2 NASH data and initial positive oral COVID-19 vaccine Phase 1 results; cash and investments ~$160M provide runway through pivotal Phase 3 trials .
  • Quarterly R&D expense decreased 12% YoY to $5.347M, with sequential moderation versus Q2’s peak, as Oravax-related R&D spending declined in Q3 .
  • Strategic footprint expanded: definitive distribution license with Medicox for Korea (up to $18M milestones, up to 15% royalties), building potential commercialization pathways .

What Went Wrong

  • Continued operating losses: Q3 net loss of $7.253M and net loss attributable to stockholders of $7.060M; revenue remains limited and recognition-based (HTIT license) rather than product sales .
  • Elevated non-cash expenses: stock-based compensation increased materially in G&A ($1.977M in Q3 vs $0.644M YoY) and contributed to higher OpEx mix, posing dilution optics .
  • HTIT milestone dispute persists (from prior filings), indicating ongoing uncertainty around a portion of licensing consideration and future milestone timing in China .

Financial Results

Income Statement and EPS (Quarterly)

MetricQ3 2021Q1 2022Q2 2022Q3 2022
Revenue ($USD Millions)$0.682 $0.666 $0.674 $0.682
Net Loss ($USD Millions)$(7.536) $(10.708) $(11.067) $(7.253)
Net Loss Attributable to Stockholders ($USD Millions)$(7.257) $(10.425) $(10.533) $(7.060)
Diluted EPS ($USD)$(0.21) $(0.27) $(0.27) $(0.18)
Weighted Avg. Diluted Shares (Millions)34.54 38.68 38.80 39.10

Operating Expense Breakdown (Quarterly)

Metric ($USD Millions)Q3 2021Q1 2022Q2 2022Q3 2022
R&D Expense$6.086 $5.836 $9.179 $5.347
Sales & Marketing Expense$0.172 $0.590 $0.380 $0.463
G&A Expense$1.909 $5.492 $2.532 $3.061

Liquidity and Cash

MetricQ1 2022Q2 2022Q3 2022
Cash & Equivalents ($USD Millions)$27.967 $29.892 $33.196
Short-term Deposits ($USD Millions)$106.368 $97.395 $121.119
Marketable Securities (Current) ($USD Millions)$7.275 $6.625 $5.234
Total Cash + Investments ($USD Millions)$141.61 $133.91 ~$160.0 (cash+deposits+securities)

Note: Total includes cash, short-term deposits, and marketable securities; Q3 figure corresponds to ~$160.0M detailed in the press release .

Segment Breakdown

  • Not applicable; revenue is primarily recognition under the HTIT license agreement; no reportable operating segments disclosed .

Key Performance Indicators (KPIs)

KPIQ3 2021Q3 2022
Revenue ($USD Millions)$0.682 $0.682
Diluted EPS ($USD)$(0.21) $(0.18)
R&D Expense ($USD Millions)$6.086 $5.347
Cash & Investments ($USD Millions)n/a~$160.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Oral Insulin Phase 3 (ORA-D-013-1) Topline EfficacyJan 2023Topline expected “January 2023” (Q2 MD&A) Reiterated timeline “expected in January” with upcoming milestones Maintained
Oral Insulin Phase 3 (ORA-D-013-2) EnrollmentThrough mid-202350% enrolled as of July 2022 Continued progress; PSUs tied to completion of enrollment by June 30, 2023 Maintained/progressing
NASH (ORMD-0801) Phase 22H 2022Data expected 3Q 2022 Positive Phase 2 data announced Sept 13, 2022 Raised (delivered positive data)
Oravax (oral COVID-19) Phase 12H 2022Data expected 2H 2022 Initial positive results referenced in Q3 PR Progressed
Korea Distribution (Medicox)OngoingNon-binding MOA w/ $2M paid; exclusivity to Dec 15, 2022 Definitive license signed; up to $18M milestones, up to 15% royalties Upgraded to definitive agreement

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current PeriodTrend
Oral insulin Phase 3 timelineORA-D-013-1 enrollment completed; topline expected Jan 2023; ORA-D-013-2 ~50% enrolled Reiterated topline Jan 2023; strong cash runway Consistent execution; timeline maintained
NASH program (ORMD-0801)Data expected 3Q 2022 Positive Phase 2 results announced; KOL event held Positive momentum
Oral COVID-19 vaccine (Oravax)Enrollment challenges; data expected 2H 2022 Initial positive Phase 1 results noted Improving traction
Regulatory/commercial strategyHTIT license dispute ongoing; China milestones discussed Korea definitive licensing deal with Medicox Expanded regional strategy
R&D execution and OpExElevated R&D from Phase 3; higher stock-based comp noted R&D moderated in Q3; G&A stock comp remained high OpEx mix shifting; discipline improving in R&D

Management Commentary

  • “We had a strong quarter filled with important milestones, including positive Phase 2 NASH data and initial positive results from our Phase 1 oral Covid-19 vaccine trial… topline data from our first Phase 3 oral insulin trial expected in January.” – Nadav Kidron, CEO .
  • “Oramed remains in a strong financial position with approximately $160 million in cash and investments… giving us sufficient runway to complete our pivotal oral insulin Phase 3 trials.” – Nadav Kidron, CEO .

Q&A Highlights

  • NASH endpoints: Discussion on MRI-PDFF versus biopsy as gold standard; clinicians acknowledged FDA’s current biopsy standard while noting active debate and future potential for imaging endpoints .
  • Path forward in NASH: Company indicated intent to design a trial demonstrating statistical significance; exploring third-party collaborations; updates to be provided as plans mature .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2022 EPS and revenue was unavailable at time of analysis due to data access limits; accordingly, estimate comparisons cannot be provided. Values would be retrieved from S&P Global if accessible.

Key Takeaways for Investors

  • Near-term catalyst: Phase 3 oral insulin topline efficacy readout in January 2023 is the primary driver of stock trajectory; strong cash reserves mitigate financing risk into catalysts .
  • Clinical breadth: Positive Phase 2 NASH data and initial Phase 1 oral COVID-19 results diversify pipeline narratives beyond diabetes, potentially expanding addressable markets .
  • Commercial optionality: The Korea licensing agreement with Medicox creates a defined regional path to market, with milestone/royalty economics that could validate platform value if clinical data succeed .
  • OpEx discipline and mix: R&D spend moderated in Q3 versus Q2, but stock-based compensation remains elevated, especially in G&A; monitor dilution optics and cost controls into the Phase 3 readout .
  • Revenue base remains recognition-driven and modest; fundamental valuation is likely to hinge on binary Phase 3 outcomes and subsequent regulatory guidance rather than near-term P&L .
  • Ongoing HTIT dispute in China is a watch item for longer-term licensing economics; a resolution could unlock additional milestone flows and revenue clarity .
  • Tactical positioning: Into the catalyst window, any company-led data updates (NASH program, Oravax progress) and ex-U.S. business development may serve as interim sentiment supports .