- 18-month loan with interest rate of SOFR plus
8.5%
- Oramed receives warrants to purchase up to 17 million
shares of Scilex common stock
- The Senior Secured Note with Scilex replaces Oramed's
previously announced Stock Purchase Agreement and DIP Term Loan
with Sorrento Therapeutics
NEW
YORK, Sept. 21, 2023 /PRNewswire/ -- Oramed
Pharmaceuticals Inc. (Nasdaq: ORMP) (TASE:ORMP) today announced
that on September 21, 2023, Oramed
and Scilex Holding Company ("Scilex") entered into a
Securities Purchase Agreement pursuant to which Scilex issued a
Senior Secured Promissory Note (the "Note") to Oramed. The
Note is the culmination of Scilex's assumption of Sorrento
Therapeutics Inc.'s ("Sorrento") approximately $100 million senior secured Debtor In Possession
("DIP") term loan facility with Oramed. Oramed previously
announced the execution of term sheets relating to the Note on
September 13, 2023.
The issuance of the Note is part of a series of mutually
beneficial transactions agreed upon by Oramed, Scilex and Sorrento,
whereby (i) Sorrento and Oramed mutually terminated a
previously announced Stock Purchase Agreement (the "Sorrento SPA")
between Oramed and Sorrento for the sale of Sorrento's equity
interests in Scilex to Oramed, which termination includes a release
of claims by each of the parties relating to the Sorrento SPA, (ii)
Scilex was declared the winning bidder for the purchase of all of
the Scilex common stock, preferred stock and warrants owned by
Sorrento for an aggregate purchase price of $110 million (which includes assumption of the
DIP term loan facility); and Scilex and Sorrento entered into a
definitive purchase agreement with respect to such purchase, and
(iii) Scilex assumed all of Sorrento's obligations as borrower
under the DIP term loan facility, upon which assumption the DIP
term loan facility was amended, restated and replaced with the
Note. The U.S. Bankruptcy Court entered a final order approving the
transactions following a hearing before the court on September 12, 2023.
In tandem with the Note, Scilex has issued to Oramed new
warrants to purchase an aggregate of up to 13 million shares of
Scilex common stock at an exercise price of $0.01 per share and each with restrictions on
exercisability, of which, warrants to purchase up to 8.5 million
shares are subject to certain vesting restrictions. In
addition, Scilex transferred to Oramed warrants to purchase 4
million shares of Scilex common stock at an exercise price of
$11.50 per share that Scilex
purchased from Sorrento. Oramed has received customary registration
rights with respect to the shares of Scilex common stock underlying
these warrants.
The primary terms of the Note include, among others:
- An initial principal balance of $101,875,000.00;
- A senior lien for Oramed on substantially all assets of Scilex
and its subsidiaries, subject to certain exclusions;
- 18-month maturity;
- Certain mandatory prepayment obligations tied to future equity
or debt financings of Scilex (subject to certain limitations
specified in the Note);
- Interest rate per annum is equal to the SOFR plus 8.5% (and
subject to a SOFR floor of 4.0%);
- Repayment of principal in installments will commence on
December 21, 2023, with a fixed
portion of the principal balance required to be repaid in three
month increments thereafter. If the Note is not repaid in full on
or prior to March 21, 2024, an exit
fee equal to $3,056,250.00 becomes
payable upon repayment of the Note in full;
- $2.91 million of expense
reimbursement for Oramed; and
- The right for Oramed to designate an observer to Scilex's Board
of Directors (and the boards or similar governing bodies of its
subsidiaries). The right of Oramed to receive certain customary
information relating to Scilex.
"In our opinion, Scilex has great intrinsic value that is
not currently realized, based on the company's growth trajectory,
commercial portfolio and infrastructure, and its robust clinical
stage pipeline," stated Oramed CEO Nadav
Kidron. "We believe that this Senior Secured Note, along
with the warrant package, is a favorable outcome to Oramed while
also supporting Scilex in executing on its growth
opportunities."
Proskauer Rose LLP served as legal advisor and H.C. Wainwright
& Co. served as financial advisor to Oramed in connection with
these transactions.
About Oramed Pharmaceuticals
Oramed Pharmaceuticals (Nasdaq/TASE: ORMP) is a platform
technology pioneer in the field of oral delivery solutions for
drugs currently delivered via injection. The company's novel
Protein Oral Delivery (POD™) technology is designed to protect drug
integrity and increase absorption. Oramed has offices in
the United States and Israel.
For more information, please visit www.oramed.com.
Forward-Looking Statements
This press release contains forward-looking statements, which
may generally be identified by the use of the words "anticipates,"
"expects," "intends," "plans," "should," "could," "would," "may,"
"will," "believes," "estimates," "potential," "target," or
"continue" and variations or similar expressions and include
statements about the benefits of the Securities Purchase Agreement
and related transactions with Scilex and Sorrento, the value
of Scilex, its growth trajectory, commercial portfolio and
infrastructure and clinical stage pipeline. These statements are
based upon the current expectations and beliefs of management and
are subject to certain risks and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties include,
but are not limited to, risks and uncertainties discussed in the
Company's most recent annual or quarterly report and detailed from
time to time in the Company's other filings with the Securities and
Exchange Commission, which factors are incorporated herein by
reference and the following factors: the risk that Scilex may
be unable to service the debt provided by the Note and the impact
of the Note obligations on Scilex's liquidity; risks associated
with the Company's ability to recover the proceeds and/or
collateral under the Note and related agreements; the possibility
that the anticipated benefits of the transaction with Scilex and
Sorrento are not realized when expected or at all, including as a
result of the impact of, or problems arising from, the ability of
Scilex to repay the Note and the ability of the Company to realize
the value of the warrants; risks associated with the fluctuating
market price and liquidity of the Scilex common stock underlying
the warrants; exposure to potential litigation in connection with
the transactions, all of which could cause the actual results or
performance of Oramed to differ materially from those contemplated
in such forward-looking statements. These forward-looking
statements speak only as of the date hereof. Oramed undertakes no
obligation to update any of these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
actual outcomes, unless required by law.
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Company Contact:
Zach
Herschfus
+1-844-9-ORAMED
zach@oramed.com
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SOURCE Oramed Pharmaceuticals Inc.