Iguana

Iguana

NASDAQ listed Oramed, then named Iguana Ventures Limited, prospected for minerals in the 2002 Nevada desert, under a cactus found a 2015 Chinese investor, Sinopharm 13% shareholder, and raised $50 million to go along with the $2 million kicked in by the Israeli Government to pursue a ten-year journey in search of oral insulin.

What could go wrong?

Drug development takes time, ten years, $100 hundred million, and a fair amount of luck. Along the way to oral insulin the world locked down for Covid 19 in 2020.  Sinopharm was one of the first in science to launch human trials for a Covid 19 vaccine, starting with the Chinese military, in the spring of 2020 so it would appear that CEO Mr Nadav Kidron and Oramed had the great good fortune to be partnered right.

Then it was more than a little curious that Mr Kidron chose March of 2020 to become a shareholder in a shell company, Cystron Biotech LLC, along with underwriters from HC Wainright and Premas Biotech. Cystron would live a fourteen-day life and hold one asset, a license to pursue a Covid 19 vaccine, from a company other than Sinopharm, Premas Biotech.  NASDAQ listed Akers Biosciences bought Cystron for $2 million in cash and 19.9% of Akers shares with money raised in a public offering. Mr Kidron's take was roughly 30% of the total.

Now Mr Kidron deemed it neither fit nor necessary to inform Sinopharm, the SEC, nor the public of the shareholding in Cystron despite for all intents and purposes being the CEO of a publicly-traded company whose majority shareholder might at the least be a Cystron competitor.  In fact, Mr Kidron's shareholding would have remained away from inquiring minds had Akers Biosciences not filed to register the securities issued for the Cystron acquisition for sale in May 2020.  Yes, the selling shareholders in Cystron the shell company that received shares in Akers required the permission of the SEC to sell those shares to the public. Mr Kidron had 207,000 Akers shares burning a hole in his pocket that he wanted to unload.

Oramed's SEC filings make no mention of the Cystron shuffle, nor that Akers returned to the public till raising $18 million in total, nor that by August the Akers Covid 19 vaccine had claimed the lives of 50 mice with nothing to show for it, nor that an Oramed supplier, Premas Biotech, was both the licensor and licensee of the vaccine, nor that Akers Biosciences sought to slink off into the Florida night through a reverse merger with another shell company only to have the class action bar leap with indignation to the defense of shareholders. But Oramed did receive an August 2020 letter from the Sinopharm shareholder (Hefei Tianhui Incubator of Technologies, HTIT) refusing a $2 to $6 million payment coming due.

Oramed intends to return to capital markets to raise $40 million for the Phase III trial of oral insulin. HTIT remains a 13% shareholder and it remains unclear how Chinese investment in publicly traded US equities will be treated by regulators and exchanges. 

Oramed does make it clear in its SEC filings that it may be difficult to enforce US securities laws against it in its Israeli domicile which makes for a neat and unexpected securities trick of raising public money in the US by foreign domiciled, Chinese owned, issuers beyond reach in Tel Aviv.