Oramed Pharmaceuticals Inc. (NASDAQ: ORMP), has signed a non-binding Letter of Intent (LoI) for an investment and license agreement in China with Sinopharm Capital Management Co. Ltd. and Hefei Life Science & Technology Park Investments and Development Co., Ltd. potentially valued at $50 million plus royalty payments.
Oramed, a clinical-stage pharmaceutical company focused on the development of oral insulin capsule delivery systems, will receive $500, 000 in exchange for exclusively negotiating with Sinopharm-Hefei for 60 days, while the final terms of the agreement are negotiated and finalized.
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The transaction which additionally includes 10% royalties on sales, will allow Sinopharm-Hefei to purchase a roughly 10% stake in Oramed Pharmaceuticals and acquire rights for oral insulin in China.
The terms are to be broken down as follows: Oramed will sell Sinopharm-Hefei 1, 155, 367 shares of common stock for approximately $12 million.
In addition, Oramed’s wholly owned subsidiary, Oramed Ltd, will license to Sinopharm-Hefei the exclusive rights to ORMD-0801, oral insulin capsule in China, for a total amount of $38 million of which $18 million will be paid upon the signing of the license agreement and the remaining $20 million will be paid following the completion, and release of results, of Oramed’s current Phase IIb trial in the United States.
