Oramed Pharmaceuticals Inc. (ORMP) received an $18 million cash payment from Scilex Holdings Inc., fully satisfying the obligations under its Option Agreement. The payment brings Oramed’s total realized returns on its original $99.5 million investment in Scilex to $118 million, a 18.8% gain that underscores the company’s disciplined investment strategy.
The payment does not eliminate all exposure to Scilex. Oramed still holds a $27 million note and a $12 million convertible note, totaling $39 million in outstanding obligations. The convertible note can be converted into Scilex equity at $36 per share at Oramed’s option, and if not converted, Scilex will repay the note in quarterly installments through October 2026. In addition, Oramed retains a warrant position and a nine‑year royalty interest in Scilex products, which could generate further cash flows if Scilex’s business improves.
The board also approved a cash dividend of $0.25 per share, with an ex‑dividend date of January 16 2026 and a payment date of January 26 2026. The dividend is expected to total approximately $10.5 million based on the current number of shares outstanding and will be funded from surplus capital, signaling confidence in the company’s liquidity position.
Oramed’s recent financial performance highlights the impact of its investment portfolio. For the nine months ended September 30 2025, the company reported a net income of $65.0 million, a dramatic turnaround from a net loss of $6.1 million in the same period last year. The jump was driven largely by the $18 million cash inflow from Scilex and unrealized gains from other equity holdings, illustrating how the investment strategy has become a core contributor to profitability.
Scilex Holdings has been under significant financial strain, reporting large losses and a “going concern” disclosure in its Q3 2025 report. The $18 million payment therefore represents a timely exit from a distressed investment, reducing Oramed’s exposure to a company with limited liquidity and providing a clean cash balance that can be deployed elsewhere.
Oramed’s core business—its oral insulin program (ORMD‑0801)—remains a long‑term growth driver. The program had a Phase 2b success but failed a Phase 3 trial in January 2023. The company is in discussions with the FDA to launch a new Phase 3 trial with an amended protocol targeting a specific patient subpopulation. The liquidity gained from the Scilex payment and the dividend payout will help fund the next development phase and mitigate the financial risk associated with the program’s uncertain regulatory path.
The announcement was well received by investors, with a positive pre‑market reaction. CEO Nadav Kidron emphasized that the cash inflow and dividend reflect the company’s strong investment discipline: “Our disciplined investment strategy is delivering strong results. The complete $100 million cash repayment from Scilex, combined with substantial unrealized gains from our Alpha Tau position and other investments, has driven our $65 million net income and positioned us with greater financial flexibility to pursue strategic opportunities while advancing our oral drug delivery platform.”
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.