Price Target Update
The Phase IIb trial was initiated on June 30, 2015 and conducted at 33 clinical sites in the United States.
The primary objective is the effect of ORMD-0801 on weighted mean night time glucose levels based on 2 nights of Continuous Glucose Monitor (CGM) data by comparison of the mean % change between baseline and week 4 of ORMD-0801 treatment and placebo groups. Safety and tolerability will also be assessed.
This study showed a statistically significant decrease in the primary endpoint, pooled night-time glucose mean percentage change of 6.47% from run-in, between placebo and active cohorts (p=0.0268).
Further, the study demonstrated a good safety profile of ORMD-0801 with no drug related serious adverse events.
The positive top line results will also trigger some milestone payments from HTIT.
The Company plans to present and publish more comprehensive data in the future.
The positive data from the Phase IIb trial is a significant de-risk event for Oramed in our opinion. The top line data further confirm the efficacy and safety of ORMD-0801, an orally delivered intestinally absorbed insulin, from previously reported results including the Phase IIa study.
With the positive top line data from the Phase IIb trial, we believe the company will move forward with a pivotal Phase III trial when they get some feedback from the FDA. We estimate a Phase III trial could start as early as in late 2016 or early 2017.
We Raise Our Valuation
We raise our valuation to $30 per share from previous $25.00 per share based on the positive top line results from the Phase IIb study.
Oramed is a mid-stage development biotech company with a current focus on diabetes. Over the years, the company has developed a unique, proprietary protein oral delivery (POD) platform technology. This is the core value for the company and differentiates the company from other biotech companies in our view.
Base on its POD platform, Oramed has built a pipeline with focus on oral insulin (ORMD-0801) and oral GLP-1 analog (ORMD-0901).
Oral insulin mimics the role of natural insulin, therefore has many advantages over injectable insulins including better control of blood glucose and less side effects. The company has completed a Phase IIa study of ORMD-0801 for T2DM and reported positive data. A Phase IIb study has completed enrollment and the company just reported positive top line data. This is a significant de-risk event for the company. We estimate a pivotal Phase III trial could start in late 2016 or early 2017.
