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Wednesday, 04/28/2021 11:31:03 AM

Wednesday, April 28, 2021 11:31:03 AM

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https://www.oramed.com/wp-content/uploads/2021/04/AGP-April-2021.pdf

ORMD-0801 for T2DM has already started second Phase 3 trial. ORMP continues to see solid enrollment in their 1st Phase 3 trial, and we anticipate that they could soon announce hitting 50% enrollment in this trial in mid-21. The second Phase 3 trial is underway as well, and we estimate that this trial is ~6 months behind the 1st trial.

ORMD-0801 could revolutionize treatment of T2DM. ORMD-0801 utilizes ORMP's Protein Oral Delivery (POD) technology, which is designed to protect orally delivered proteins through the stomach to be released in the lower intestine. We believe that an effective oral version of injectable insulin would grab significant market share, and could potentially replace injected insulin altogether.

Oravax oral vaccine could revolutionize treatment for COVID-19, too. While the US and many other countries appear to be getting control of the COVID-19 pandemic through immunizations & infections, much of the world is still deep in the throes of this pernicious pandemic. Notably India has surpassed 350,000 new cases per day by official count, and Canada has seen an alarming second spike as well. An effective orally available vaccine could be an absolute game-changer, in our opinion. injection site reactions and needle-avoidance would be eliminated with an oral vaccine option.

An oral vaccine would likely find broad usage ex-US & in developing countries.
It's anticipated that the Oravax oral tablet would not have the expensive and resource intensive cold-chain requirements of the current injected vaccines. This would be a significant positive for distribution in much of the world where cold chains are not readily available. The US appears to be turning a corner with respect to COVID-19 so far - assuming no new vaccine resistant variants emerge - so we anticipate ex-US adoption is likely first. That said, should COVID-19 vaccinations require annual boosters, as is feared may be the case, we believe that an oral version again would be vastly preferable to injections.

Maintain Buy rating, $25 price target. Our price target is based on a sum-of-the parts with ORMD-0801 for T2DM valued at $18/share, Oravax oral vaccine for COVID-19 valued at $5/share, ORMD-0801 for NASH valued at $1/share, and the remaining programs (ORMP-0901, oral leptin) plus cash (end-'22) at $1/share for our $25 price target.

Valuation:
We value ORMP at $25/share based on a sum-of-the-parts primarily due to our expectations for ORMP-0801 for Type 2 Diabetes (T2DM). We anticipate ORMP receives FDA/EMA approval for ORMP-0801 for T2DM in 2HFY24 (August FY), with a launch in 1HFY25 with WW sales reaching $850M by FY30. We place a 4x multiple on WW sales, discounted back 8 years at 20% for our $18/share value. We value Oravax at $5/share based on expectations for approval and $250M in sales by 2025, discounted back 3 years at 55%. We anticipate ORMD launches ORMD-0801 for NASH in FY27 with US sales reaching $300M by FY30. We place a 4x multiple on US sales, discounted back 8 years at 50% for our $1.00/share value. We value the remaining technology at ORMP (ORMP 0901 oral GLP-1 analog, Oral leptin for weight loss) and cash (end FY22E) at $1.00/share for our $25/share valuation.

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