NEW
YORK, Oct. 7, 2024 /PRNewswire/ -- Oramed
Pharmaceuticals Inc. (Nasdaq: ORMP) (TASE: ORMP) ("Oramed"), a
clinical-stage pharmaceutical company focused on the development of
oral drug delivery platforms, today announced the execution of
definitive agreements for the restructuring of a portion of its
existing Senior Secured Promissory Note from Scilex Holding Company
(Nasdaq: SCLX) ("Scilex"), a company focused on non-opioid pain
management products.
Key Highlights:
Oramed, affiliates of Murchinson
and 3i LP, entered into definitive agreements with Scilex for the
purchase and sale of new tranche B senior secured convertible notes
("Notes") in the aggregate principal amount of $50 million (the "New Financing") and warrants to
purchase up to 7,500,000 shares of the Company's common stock in
the aggregate in a registered direct offering.
Oramed has agreed to restructure $22.5
million of the outstanding principal balance under Scilex's
existing Senior Secured Promissory Note, originally due to Oramed
between September 2024 and
March 2025. In exchange, Oramed will
receive:
- A Note having an aggregate principal amount of $25 million at issuance, with an original issue
discount of 10.0%, that bears interest at a rate of 5.5% per annum,
is convertible into shares of Scilex common stock at the
option of holder at a conversion price equal to $1.09 (subject to certain adjustments) and
matures on the two -year anniversary of issuance;
- Warrants to purchase up to 3.75 million shares of Scilex common
stock with an exercise price of $1.09
(subject to certain adjustments) that are immediately exercisable
and expire five years from issuance; and
- the application by Silex at closing of $12.5 million of the proceeds from the New
Financing from the non-Oramed purchasers towards the repayment of
such amount of outstanding principal under the Oramed Senior
Secured Promissory Note.
In order to facilitate the ongoing negotiation of the New
Financing, Oramed agreed to further extend certain payments due
from Scilex under the Senior Secured Promissory Note on
September 23, 2024 to October 7, 2024. The closing of the New Financing
is expected to occur on or about October 7,
2024, subject to satisfaction of certain closing
conditions. After giving effect to these transactions, an
aggregate of $54.2 million of the
original principal amount under the Senior Secured Promissory Note
has been repaid or refinanced.
Separately, Oramed and certain other institutional investors
anticipate acquiring the right to receive an 8% royalty on the net
sales of certain of Scilex's products, including ZTlido (lidocaine
topical system). Oramed is entitled to receive 50% of such proceeds
from the net sales of the products. Oramed's purchase consideration
in such transaction is intended to be satisfied through a reduction
of $2.5 million of the outstanding
principal balance on the Senior Secured Promissory Note. The
closing of the royalty transaction is anticipated to occur
contemporaneous with the closing of the New Financing.
"We believe that this restructuring significantly enhances the
potential value of our investment in Scilex," said Nadav Kidron, CEO of Oramed Pharmaceuticals.
"While slightly extending the payment schedule of a portion of our
investment, it offers us substantial potential upside, including
through warrants and conversion options. We are also excited to
have a stake in the growth and prospects of ZTlido. This aligns
perfectly with our strategy of maximizing value for our
shareholders while supporting innovative healthcare solutions."
About Oramed Pharmaceuticals
Oramed Pharmaceuticals
(Nasdaq/TASE: ORMP) is a platform technology pioneer in the field
of oral delivery solutions for drugs currently delivered via
injection. The Company's novel Protein Oral Delivery (POD™)
technology is designed to protect drug integrity and increase
absorption. Oramed has offices in the
United States and Israel.
For more information, please visit www.oramed.com.
Forward-looking statements: This press release
contains forward-looking statements, which may generally be
identified by the use of the words "anticipates," "expects,"
"intends," "plans," "should," "could," "would," "may," "will,"
"believes," "estimates," "potential," "target," or "continue" and
variations or similar expressions and include statements about the
completion of the New Financing and royalty transaction, the
satisfaction of customary closing conditions related to the New
Financing, the benefits and value of the New Financing, the royalty
transaction and related transactions with Scilex, the value of
Scilex's securities, its growth trajectory, commercial portfolio
and infrastructure and clinical stage pipeline. These statements
are based upon the current expectations and beliefs of management
and are subject to certain risks and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties include,
but are not limited to, risks and uncertainties discussed in the
Company's most recent annual or quarterly report and detailed from
time to time in the Company's other filings with the Securities and
Exchange Commission, which factors are incorporated herein by
reference and the following factors: risks that the New Financing
and royalty transaction do not close; the risk that Scilex may be
unable to service the debt provided by the Note and the existing
Senior Secured Promissory Note and the impact of the New
Financing's obligations on Scilex's liquidity; risks associated
with the Company's ability to recover the proceeds and/or
collateral under the Note, the existing Senior Secured Promissory
Note and related agreements; the possibility that the anticipated
benefits of the transactions with Scilex are not realized when
expected or at all, including as a result of the impact of, or
problems arising from, the ability of Scilex to repay the
indebtedness and the ability of the Company to realize the value of
the warrants and Notes; risks associated with the fluctuating
market price and liquidity of the Scilex common stock underlying
the warrants and Notes; and risks associated with the
unpredictability of trading markets, all of which could cause the
actual results or performance of Oramed to differ materially from
those contemplated in such forward-looking statements. These
forward-looking statements speak only as of the date hereof. Oramed
undertakes no obligation to update any of these forward-looking
statements to reflect events or circumstances after the date hereof
or to reflect actual outcomes, unless required by law.
Company Contact:
+1-844-9-ORAMED
ir@oramed.com
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SOURCE Oramed Pharmaceuticals Inc.