The pharmaceutical company Ormed , managed by Nadav Kidron, announced today (Thursday) a failure to achieve the main goal in a phase III trial in the treatment of diabetes using an oral insulin pill. As a result, the stock crashes by 71% in trading in Tel Aviv and in early trading on Nasdaq. The company is now traded in Tel Aviv at a value of only 463 million shekels, when it opened Hoyim with a value of 1.5 billion shekels.
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Ormed has developed a unique technology for administering diabetes medications by ingestion instead of injection, and the oral insulin that is in a clinical trial is its leading product. She has no products on the market yet. In the experiment, the company wanted to show the contribution of giving an insulin pill on long-term control of sugar levels, as expressed in the A1C index about 26 weeks after the start of treatment. No significant difference was found between the treatment group and the control group in this index and in another secondary index, which tested fasting sugar levels after 26 weeks of treatment.
Ormed did not try to embellish the results and said that it is ceasing its activity in the field of oral insulin for type 2 diabetes. This is probably the reason for the strength of the stock’s reaction.
Kidron said today that: “We are very disappointed in light of the result of previous experiments. We will work to study the results in full in order to draw lessons from them regarding our other products.”
The FDA, the US Food and Drug Administration, requires two Phase III trials from products with routes that are not defined as shortened. Ormed chose to conduct both experiments at the same time, in order to shorten the time to reach the market, and with confidence in the results. This experiment is the first to yield results, and from the company’s announcement it can be understood that it makes the continuation of the second experiment unnecessary.
Ormed has additional products in the pipeline, including an oral vaccine for corona which is nearing the start of clinical trials, as well as a product for the treatment of fatty liver in diabetic patients, which is in phase II of clinical trials. However, the negative results of the current experiment may also affect the investors’ trust in the company’s technological platform.
In a letter to investors from last July, Kidron said that the company is looking for strategic opportunities, probably mainly additional applications for its technological platform, but even such opportunities may be affected by the current results. The company’s coffers had about 159 million dollars as of the end of the third quarter of 2022.
Before the declines, Ormed traded at a price 320% higher than the price at which it traded in October 2020, and this is contrary to the general trend in the biomed field. The company rose 900% by October 2021, following its progress in the clinical trial of the current product, and following its decision to develop an ingestible vaccine for Corona, a plan that is still ongoing. The stock was hurt by the general trend in biomed and the drop in interest due to Corona, but started to climb again from mid-2022, in anticipation of the results of the experiment.