Oramed Pharmaceuticals has established a new paradigm for the treatment of diabetes Print E-mail
By Ray Dirks, Ray Dirks Research   
Monday, 03 October 2011 07:54
FDA CalendarOramed Pharmaceuticals Inc. (OTCBB:ORMP) researches and develops drugs to be taken orally instead of by injection.  Its drug closest to approval is thei flagship oral insulin capsule, ORMD-0801 for diabetes.

We compared ORMP to two very similar companies trying to develop drugs for diabetes – Mannkind Corp. (Nasdaq: MNKD) and Amylin Pharmaceuticals (Nasdaq: AMLN ).

ORMP's clinical trials  pipeline status is close to MNKD, who sports a market cap of nearly $500 million, but we believe ORMP has a much better product. AMLN, whose only real drug, BYETTA, has been shot down by the FDA numerous times, has a market cap of $1.6 billion, and is an injectible, far inferior to diabetics that would prefer a pill over a needle.

Based on our short term valuation and given those comparables, we believe that ORMP shares are currently undervalued and in a position to grow in value within the next 12 months.

Further out, we see ORMP continuing to gain value, within two years (the intermediate term), and hitting our target of $7.00 within three years, our longer term projection.

ORMP’s flagship product is an oral insulin capsule that has many advantages over drugs that are currently available by injection only.

We believe this new product will revolutionize the treatment of diabetes. This new oral insulin will increase patient compliance, avoiding intervention at later stages that are so costly to hospitals, eventually paid by the rest of us.

Through this oral drug delivery platform, ORMP has established a new paradigm for the treatment of diabetes. Strong patents are established.

According to the World Health Organization and the American Diabetes Association, there are 285 million diabetics throughout the world with an annual treatment cost of $376 billion. 

ORMP has successfully completed a Phase IIb clinical trial for its oral insulin capsule, ORMD-0801, showing significant results for treating Type 2 diabetics.

ORMP is now working on an Investigative New Drug (IND) submission to the FDA in 2012 for this compound, to be followed by a Phase II clinical trial in the United States within the next few months. 

Other products in ORMP’s pipeline include an oral method of delivery of GLP1-Analog (ORMD-0901), a gastrointestinal hormone that stimulates the secretion of insulin from the pancreas. This oral method of treatment has also shown positive results in pre-clinical trials and is now undergoing clinical trialsA huge blockbuster product !  

Also, recently the company has had exciting news that through a series of transactions, ORMP is entitled to receive royalties of 3 % for developing an oral delivery for Osteoporosis. Which affects 10 million people in the United States alone, it’s the oral tablet form of well known Osteoporosis drug which currently has $830 million in annual sales. This drug has just completed successful phase 1 clinical trials.
Oramed Pharmaceuticals has a potential pipeline that may include potential blockbusters such as an oral Flu Vaccine. These are huge worldwide markets!   

Why does ORMP’s breakthrough technology, oral delivery of drugs that can only now have an effect by injection, have such a bright future?  Mainly because it’s outstanding, highly experienced management team, which includes many world-renowned scientists, is just beginning to let the our health care system know about the innovative technology that ORMP scientists have developed after 30 years of groundbreaking research at the Hadassah Medical Organization in Jerusalem – in the Middle-Eastern country of Israel.  

Who are these world-renowned scientists on ORMP’s staff that are actively involved in strategizing and implementation the company’s plans?

Professor Avram Hershko – Nobel Prize laureate;

Professor Ele Ferrannini  - former President of the EASD;      

Professor John Amatruda – former Senior Vice President of Merck and Co.; and 

Dr. Michael Berelowitz – former Senior Vice President of Pfizer, Inc. 

We believe it is important to note that Dr. Berelowitz joined OPMP’s Board of Directors only in May, 2010, and last month became the Chairman of its Scientific Advisory Board. He will be actively involved in all of ORMP’s scientific decisions, clinical strategy, and partnership negotiations. Among his many public activities, Dr. Berelowitz served on the board of directors of the American Diabetes Association and the Clinical Initiatives Committee of the Endocrine Society, chaired the task force on research of the New York State Council on Diabetes, and has authored and co-authored peer-reviewed journal articles and book chapters in the areas of pituitary growth, hormone regulation, diabetes, and metabolic disorders.

MNKD’s market value is currently approximately $500 Million and AMLN’s market cap is approximately 1.6 billion while ORMP’s market value is approximately $20 Million.  As ORMP continues their trials for their  ORM-0801 and enters clinical trials for their  oral method of delivery of GLP1-Analog as well as other indications, their market value should reasonably exceed the market value of MNKD’s and approach that of AMLN, because in my opinion, oral drug delivery platform, ORMP has established a new paradigm for the treatment of diabetes that will also be used for oral delivery of  numerous drugs that can only now have an effect by injection.  Ergo, our opinion to accumulate ORMP’s Stock.

Any Readers of this Article who wish to contact Ray Dirks of Ray Dirks Research personally may reach Ray at [email protected]

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