While there have been breakthrough advances in the efficacy and success of treating illness, diseases, and ailments through biotech drugs, some companies take it a step further. In addition to improving effectiveness, they have developed innovative and convenient methods in delivering treatments.
One of these companies is Oramed. If you are not familiar with ORMP, they develop drugs and vaccines in an oral pill form that are traditionally and currently delivered through an injection. Their most successful product to date is an insulin capsule used to treat diabetes.
Does this sound like a make believe story with fairy dust sprinkled all over it? No, it’s not a Theranos situation where they claim to have a much improved methodology that eliminates archaic outdated procedures and tests only to find out they’ve been using the new technology for only 1 of the 240 tests that they claim.
What interests me about ORMP is not simply their success (see below) in treating a debilitating disease, but their vision to totally shift the paradigm on how the drugs are delivered. In the ultra-competitive world of biotech and pharma, any differentiator will give you a leg up.
This is what I like about ORMP; they’re showing me something that is new, convenient, and successful. Ms. Holmes, while I admire her ambition and hope to have her success, could learn something from this company about going through the proper channels to have a sustainable, long-term breakthrough product.
Positive Factors:
– ORMP reported details from their Phase II A clinical trial:
“The results showed that ORMD-0801 oral insulin appeared to be safe and we ll-tolerated for the dosing regimen considered in this study. No hypoglycemic events occurred at any point in any treatment group and no treatment related adverse events were observed.
Although the study was not powered to show statistical significance, there were trends observed showing pattern of well-defined and short-term increases in plasma insulin and decreases in blood glucose.”
– This flagship product has successfully completed multiple Phase II A clinical trials and on June 30th of this year started its Phase II B clinical trial with the FDA for Type 2 diabetes, with the treatment for Type 1 diabetes is in the middle of Phase II clinical trials as well.
– On September 24th, their patent for “Methods and Compositions for Oral Administrations of Proteins” has been allowed by the United States Patent and Trademark Office.
Although this wasn’t celebrated like an FDA approval, its’s an important and vital step because it will essentially let Oramed be the only company that can distribute diabetes treatments in an oral pill form for the length of the patent.
– In addition to oral insulin, ORMP’s proprietary POD technology can be used to orally administer a number of protein-based therapies that are currently available only through an injection.
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As of today, ORMP signed a definitive licensing and investment agreements valued up to $50M with Hefei Tianhui Incubator of Technologies Co., Ltd., a well-known Chinese incubator, for exclusive rights to market the oral insulin capsule in China, Hong Kong and Macau. The details include:
$3M upon execution of the agreement; $8M in near-term payments subject to ORMP entering into certain agreements; and balance payable upon achievement of certain milestones.
In addition, if all conditions are met, HTIT will pay a 10% royalty on net sales of the related commercialized products. Lastly, Oramed will issue to HTIT 1.51M restricted shares of ORMP stock at a price of $10.39 (or ~$12M) in total, subject to customary closing conditions.
The concept of treating and testing diseases in a new manner has been a proven anecdote (pun intended) for investor enthusiasm.
Just look at the run-up Exact Sciences had up until the end of the summer; they’ve been successful at developing non-invasive colorectal cancer screening products. There are so many ways I could make a literate joke here…
Make no mistake about it; ORMP is no sure thing (nothing is in the market or in life for that matter). Uncertainty abounds what the end game is between buyout, partnership, growing the business organically, or eventual bankruptcy.
However, if you’ve got the patience and the awareness that this is a boom or bust long-term investment, I highly encourage you to learn more about them. Note, I’ve been long since late May-early June with an extremely small position (less than 1% of portfolio).
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another good post. senor fly, take note. one of the better bloggers.
Thank you djmarcus. I appreciate the endorsement. My strengths are providing a more long-term view on equities and themes. I will also be discussing more about portfolio allocation and risk management, which one can never stop learning about.
That being said, the content that everyone brings is unique, stylistic, and invaluable; all of the guys (and soon enough girls) are all stars in their own right. It’s truly humbling to be involved in this site, and write alongside all the bloggers who each give tremendous perspectives.
I really enjoyed your article on margin of safety and expected value. Care to share anything else from your library?