Oramed Pharmaceuticals Inc. (ORMP) Stock | $50 Million Licensing and Investment Agreement


Oramed Pharmaceuticals Inc. (NASDAQ: ORMP)


Oramed Pharmaceuticals Inc. (ORMP), a clinical stage pharmaceutical company yesterday announced it has signed a licensing and investment agreement with Hefei Incubator of Technologies Co., Ltd  for exclusive rights to market Oramed’s oral insulin capsule in China, Hong Kong, and Macau. The agreement is valued at $50 million.


Oramed Pharmaceuticals Inc. CEO Comments

“China recently became the country with the largest number of diabetics in the world. Having signed these definitive license and investment agreements, our oral insulin capsule could help serve the growing population of people in China living with diabetes,” stated Oramed’s CEO Nadav Kidron.  “In addition to the $50 million in milestone payments and investments, we believe the royalties on net sales throughout China will have a very significant impact on Oramed’s future revenues and earnings, upon market approval of ORMD-0801 in China.”  PR Newswire


ORMP Technical Analysis


ORMP gapped up in price yesterday to $9.25, up from the prior day’s close of $7.75, which is a 19% increase on the favorable news. Taking a look at the daily chart, we can see the last time ORMP traded at this price level was on April 14th, when it traded at highs of $9.46. ORMP has been on an upswing dating back to September 30th when it traded at lows of $5.46. With the gap up in price, ORMP is trading near its 52 week high of $9.84. Usually when a stock approaches its 52 week highs with this kind of momentum they have a tendency to shoot right through it. That is the move I will be looking to capitalize on. ORMP does have a low float of 9.44 million shares and was trading over 26 times the normal daily trading volume. Both of these factors make ORMP a prime candidate for the gap and go strategy. ORMP did reach pre market highs of $9.41, but gave back $0.16 at the open, or equivalent to 2%. For trading purposes, my entry point would have been $9.35 with a possible add on at the 52 week high price of $9.84, looking for a move through $10. My stop loss would have been $9.15, fearing anything below that and the stock would start to fill in the gap up.


Company Profile

Oramed Pharmaceuticals Inc. engages in the research and development of pharmaceutical solutions for the use of orally ingestible capsules or pills for delivery of polypeptides. Its product portfolio includes ORMD-0801, an oral insulin capsule that is in Phase IIb clinical trials for the treatment of diabetes; and ORMD-0901, an analog for GLP-1 gastrointestinal hormone, which is in Phase Ib clinical trials for the treatment of type 2 diabetes. The company was formerly known as Integrated Security Technologies, Inc. and changed its name to Oramed Pharmaceuticals Inc. in April 2006. Oramed Pharmaceuticals Inc. was founded in 2002 and is based in Jerusalem, Israel.  Yahoo Finance