Oramed Swings to Profit on Soaring Financial Income, Strategic Investments

TL;DR

**Oramed's massive financial income surge and strategic investments signal a pivot, making it a speculative buy for those betting on its new portfolio, despite the HTIT JV collapse.**

AI Summary

ORAMED PHARMACEUTICALS INC. reported a significant turnaround for the nine months ended September 30, 2025, achieving a net income of $54.007 million, a substantial improvement from a net loss of $8.904 million in the same period of 2024. This positive shift was primarily driven by a massive increase in financial income, net, which surged to $74.278 million from $3.902 million year-over-year. The company also generated $2.000 million in revenues for the nine-month period, with a gross profit of $13 thousand, compared to no revenue in the prior year. Research and development expenses decreased by 9.66% to $4.393 million from $4.863 million, while general and administrative expenses rose by 16.49% to $5.036 million. Total assets grew to $220.493 million as of September 30, 2025, from $155.278 million at December 31, 2024, largely due to a significant increase in investments at fair value to $73.514 million and an investment in associate at fair value of $64.803 million. The company terminated its Joint Venture Agreement with Hefei Tianhui Biotech Co., Ltd. (HTIT) on October 23, 2025, due to HTIT's inability to satisfy closing conditions, and acquired approximately 17% of Alpha Tau Medical Ltd. for $36.900 million in April 2025.

Why It Matters

This filing reveals Oramed's pivot from a pure R&D biotech to an investment-focused entity, generating substantial financial income and acquiring stakes in other companies like Alpha Tau Medical Ltd. for $36.900 million. For investors, this signals a shift in strategy, potentially offering new avenues for value creation beyond its core oral insulin technology, though it also introduces new market and liquidity risks associated with these investments. Employees might see a change in company focus, while customers could anticipate a slower pace in product development if R&D is de-emphasized. The termination of the HTIT joint venture highlights execution risks in international partnerships, impacting competitive dynamics in the oral insulin market.

Risk Assessment

Risk Level: high — The company's significant net income of $54.007 million for the nine months ended September 30, 2025, is heavily reliant on 'Financial Income (Loss), Net' which accounted for $74.278 million. This volatile income stream, coupled with the termination of the HTIT Joint Venture Agreement on October 23, 2025, and exposure to 'potential market, liquidity, and execution risks' from real estate and other investments like Alpha Tau Medical Ltd., indicates a high-risk profile. The company explicitly states that its 'various real estate and other investments... involve significant risks and might not provide long-term value appreciation'.

Analyst Insight

Investors should carefully evaluate Oramed's new investment-centric strategy and the inherent volatility of its financial income. Given the termination of the HTIT JV, consider the impact on its oral insulin pipeline. Await further clarity on the performance of its Alpha Tau Medical Ltd. investment and other real estate projects before making significant commitments.

Financial Highlights

debt To Equity

0.06

revenue

$2.000M

operating Margin

-219.65%

total Assets

$220.493M

total Debt

$12.044M

net Income

$54.007M

eps

$1.30

gross Margin

0.65%

cash Position

$52.179M

revenue Growth

+N/A

Revenue Breakdown

Key Numbers

• $54.007M — Net Income (Swung from a $8.904M loss in 2024 to a profit for the nine months ended September 30, 2025.)
• $74.278M — Financial Income, Net (Primary driver of net income, up from $3.902M in the prior year.)
• $2.000M — Revenues (Generated for the nine months ended September 30, 2025, compared to zero in 2024.)
• $220.493M — Total Assets (Increased from $155.278M at December 31, 2024, reflecting new investments.)
• $36.900M — Investment in Alpha Tau Medical Ltd. (Acquisition of approximately 17% stake in April 2025.)
• $4.393M — Research and Development Expenses (Decreased by 9.66% from $4.863M in the prior year.)
• $5.036M — General and Administrative Expenses (Increased by 16.49% from $4.323M in the prior year.)
• 39,802,455 — Shares Outstanding (As of November 12, 2025.)
• $1.30 — Basic Income Per Share (For the nine months ended September 30, 2025, up from $(0.22) in 2024.)
• 63% — Ownership in Oravax Medical Inc. (Company holds 63% of Oravax's issued and outstanding share capital.)

Key Players & Entities

• ORAMED PHARMACEUTICALS INC. (company) — Registrant
• Hefei Tianhui Biotech Co., Ltd. (company) — Joint Venture partner
• Alpha Tau Medical Ltd. (company) — Strategic investment
• Scilex Holding Company (company) — Loan and warrant holder
• Oravax Medical Inc. (company) — 63% owned subsidiary
• $54.007 million (dollar_amount) — Net income for nine months ended September 30, 2025
• $74.278 million (dollar_amount) — Financial income, net for nine months ended September 30, 2025
• $36.900 million (dollar_amount) — Purchase price for 17% stake in Alpha Tau Medical Ltd.
• October 23, 2025 (date) — Termination date of JV Agreement with HTIT
• September 30, 2025 (date) — End of quarterly period

FAQ

Risk Factors

• Joint Venture Termination [medium — operational]: The company terminated its Joint Venture Agreement with Hefei Tianhui Biotech Co., Ltd. (HTIT) on October 23, 2025, due to HTIT's inability to satisfy closing conditions. This termination could impact future strategic initiatives and potential revenue streams associated with the JV.
• Investment Concentration [medium — financial]: The company has made significant investments, including $73.514 million in investments at fair value and $64.803 million in an investment in associate at fair value as of September 30, 2025. A substantial portion of total assets ($220.493 million) is now tied up in these investments, increasing exposure to market fluctuations in these specific assets.
• New Accounting Standards [low — regulatory]: The company is evaluating the impact of new accounting standards, such as ASU 2025-05 and ASU 2025-07, which relate to credit losses and derivatives/hedging, respectively. Changes in accounting for financial instruments or revenue recognition could affect reported financial results.
• Dependence on Investment Performance [high — market]: The significant increase in net income ($54.007 million) was primarily driven by a surge in financial income ($74.278 million). This indicates a heavy reliance on investment performance, making the company vulnerable to downturns in the financial markets.
• Research and Development Spending [medium — operational]: While R&D expenses decreased by 9.66% to $4.393 million, the company's core business relies on the development of new pharmaceutical products. A sustained decrease in R&D spending could impact future product pipelines.
• Increasing G&A Expenses [low — operational]: General and administrative expenses rose by 16.49% to $5.036 million. While some increase is expected with growth, a significant rise in G&A without corresponding revenue growth could pressure profitability.

Industry Context

The pharmaceutical industry is characterized by high R&D costs, lengthy development cycles, and stringent regulatory approvals. Companies often rely on strategic partnerships and investments to diversify their pipelines and mitigate risks. The current landscape sees increased focus on specialized therapies and innovative drug delivery systems.

Regulatory Implications

Oramed operates within a highly regulated industry, requiring adherence to FDA and other global health authority standards for drug development and commercialization. The company is also subject to evolving accounting standards (ASU 2025-05, ASU 2025-07) that could impact financial reporting and disclosures.

What Investors Should Do

1. Monitor investment performance
2. Analyze R&D and G&A spending trends
3. Evaluate the impact of new investments
4. Assess the sustainability of current profitability

Key Dates

• 2025-04-XX: Acquisition of Alpha Tau Medical Ltd. stake — Represents a strategic investment in a new entity, diversifying the company's portfolio and potentially opening new avenues for growth.
• 2025-10-23: Termination of Joint Venture Agreement with HTIT — Indicates a setback in a specific partnership, requiring the company to re-evaluate its strategy for that particular venture and potentially seek alternative collaborations.
• 2025-09-30: End of the nine-month reporting period — Marks the period for which the company reported a significant turnaround in net income, driven by financial income.
• 2025-12-15: Effective date for ASU 2025-05 — A new accounting standard for credit losses that the company is evaluating, which could impact financial reporting.
• 2026-12-15: Effective date for ASU 2025-07 — A new accounting standard for derivatives and hedging that the company is evaluating, which could impact financial reporting.

Glossary

Investments at fair value

Assets held by the company whose value is determined by current market prices. Changes in fair value can impact the company's net income and balance sheet. (A significant portion of the company's assets are classified as investments at fair value, and their performance is crucial to the company's financial results.)

Investment in associate at fair value

An investment in another company where the investor has significant influence but not control, and the investment is valued at its current market price. (This represents a substantial new investment for Oramed, contributing significantly to its asset base and potential future returns.)

Accumulated deficit

The total net losses of a company over its history that have not been offset by net income. (Despite the recent net income, the company still carries a significant accumulated deficit, indicating a history of losses.)

Non-controlling interests

The portion of equity in a subsidiary that is not attributable to the parent company. (Indicates that Oramed does not own 100% of all its consolidated subsidiaries, with a small portion of equity belonging to external shareholders.)

Operating lease right-of-use assets

Assets recognized on the balance sheet representing the right to use an asset for the lease term under an operating lease. (Shows the company's use of leased assets, which has increased from $414 thousand to $817 thousand.)

Deferred tax liabilities

Taxes that are expected to be paid in the future, arising from temporary differences between accounting income and taxable income. (A new significant liability of $7.921 million, indicating potential future tax obligations.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, Oramed Pharmaceuticals Inc. reported a dramatic turnaround, swinging from a net loss of $8.904 million in 2024 to a net income of $54.007 million. This was primarily fueled by a substantial increase in financial income, which rose from $3.902 million to $74.278 million. Revenue generation began with $2.000 million, compared to none in the prior year. While R&D expenses saw a slight decrease, G&A expenses increased. Total assets grew significantly, driven by new investments, reflecting a shift in the company's financial structure.

Key Financial Figures

• $0.012 — ich registered Common Stock, par value $0.012 ORMP The Nasdaq Capital Market, Tel Avi
• $1.00 — by the Bank of Israel, was NIS 3.306 to $1.00. Unless indicated otherwise by the cont

Filing Documents

• ea0264871-10q_oramed.htm (10-Q) — 953KB
• ea026487101ex31-1_oramed.htm (EX-31.1) — 10KB
• ea026487101ex31-2_oramed.htm (EX-31.2) — 10KB
• ea026487101ex32-1_oramed.htm (EX-32.1) — 3KB
• ea026487101ex32-2_oramed.htm (EX-32.2) — 3KB
• 0001213900-25-109980.txt ( ) — 6591KB
• ormp-20250930.xsd (EX-101.SCH) — 63KB
• ormp-20250930_cal.xml (EX-101.CAL) — 41KB
• ormp-20250930_def.xml (EX-101.DEF) — 334KB
• ormp-20250930_lab.xml (EX-101.LAB) — 539KB
• ormp-20250930_pre.xml (EX-101.PRE) — 342KB
• ea0264871-10q_oramed_htm.xml (XML) — 799KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 1

- FINANCIAL STATEMENTS

ITEM 1 - FINANCIAL STATEMENTS 1

- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 29

- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 39

- CONTROLS AND PROCEDURES

ITEM 4 - CONTROLS AND PROCEDURES 39

- OTHER INFORMATION

PART II - OTHER INFORMATION 40

- RISK FACTORS

ITEM 1A - RISK FACTORS 40

- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 40

- OTHER INFORMATION

ITEM 5 - OTHER INFORMATION 40

- EXHIBITS

ITEM 6 - EXHIBITS 41 As used in this Quarterly Report on Form 10-Q, the terms "we," "us," "our," "Oramed" and the "Company" mean Oramed Pharmaceuticals Inc. and our wholly-owned subsidiaries, unless otherwise indicated. All dollar amounts refer to U.S. Dollars unless otherwise indicated. On September 30, 2025, the exchange rate between the New Israeli Shekel, or NIS, and the dollar, as quoted by the Bank of Israel, was NIS 3.306 to $1.00. Unless indicated otherwise by the context, statements in this Quarterly Report on Form 10-Q that provide the dollar equivalent of NIS amounts or provide the NIS equivalent of dollar amounts are based on such exchange rate. i Cautionary Statement Regarding Forward-Looking Statements The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws and the Israeli securities law. Words such as "expects," "anticipates," "intends," "plans," "planned expenditures," "believes," "seeks," "estimates," "considers" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements include, among other stateme

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

- FINANCIAL STATEMENTS

ITEM 1 - FINANCIAL STATEMENTS ORAMED PHARMACEUTICALS INC. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2025 TABLE OF CONTENTS Page CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets 2 Condensed Consolidated Statements of Comprehensive Income 3 Condensed Consolidated Statements of Changes in Equity 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6-28 1 ORAMED PHARMACEUTICALS INC. INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS U.S. Dollars in thousands (except share and per share data) (UNAUDITED) September 30, December 31, 2025 2024 Assets CURRENT ASSETS: Cash and cash equivalents $ 52,179 $ 54,420 Short-term deposits 4,038 55,281 Marketable securities 4,956 3,441 Investments at fair value 73,514 28,788 Prepaid expenses and other current assets 1,430 1,291 Total current assets 136,117 143,221 LONG-TERM ASSETS: Long-term deposits 2 2 Investments at fair value 11,410 7,387 Investment in associate at fair value 64,803 - Loan to an equity method investee 1,044 - Investment in real estate 2,122 - Other non-marketable equity securities 3,524 3,524 Amounts funded in respect of employee rights upon retirement 40 32 Property and equipment, net 614 698 Operating lease right-of-use assets 817 414 Total long-term assets 84,376 12,057 Total assets $ 220,493 $ 155,278 Liabilities and stockholders' equity CURRENT LIABILITIES: Accounts payable and accrued expenses $ 4,861 $ 5,140 Payable to related parties 1 329 Deferred income 986 - Operating lease liabilities 271 216 Total current liabilities 6,119 5,685 LONG-TERM LIABILITIES: Long-term deferred revenues 2,000 4,000 Long-term deferred income 1,496 - Employee rights upon retirement 38 30 Operating lease liabilities 589 156 Other liabilities - 60 Deferred tax liabilities 7,921 - Total long-term liabilities 12,044 4,246 COMMITMENTS (note 9) EQUITY ATTRIBUTABLE TO COMPANY'S STOCKHOLDERS: Common stock, $ 0.012 par value ( 60,000,000 authorized

financial statements disclosures

financial statements disclosures. In July 2025, the FASB issued ASU 2025-05 "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets". The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient, when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting periods beginning after December 15, 2025 and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is evaluating the impact of ASU 2025-05 on its consolidated financial statements if it elects to apply the practical expedient. In September 2025, the FASB issued ASU No. 2025-07 ("ASU 2025-07"), Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance refines the scope of Topic 815 by clarifying which contracts are subject to derivative accounting and expand the scope exception for certain contracts not traded on an exchange to include contracts for which settlement is based on operations or activities specific to one of the parties to the contract. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for annual periods beginning after December 15, 2026, and interim reporting periods withi

View Full Filing

View this 10-Q filing on SEC EDGAR