Oramed announces restructuring of Scilex debt

Oramed Pharmaceuticals (ORMP) announced the execution of definitive agreements for the restructuring of a portion of its existing Senior Secured Promissory Note from Scilex Holding Company (SCLX). Oramed, affiliates of Murchinson and 3i LP, entered into definitive agreements with Scilex for the purchase and sale of new tranche B senior secured convertible notes in the aggregate principal amount of $50M and warrants to purchase up to 7,500,000 shares of the Company’s common stock in the aggregate in a registered direct offering. Oramed has agreed to restructure $22.5M of the outstanding principal balance under Scilex’s existing Senior Secured Promissory Note, originally due to Oramed between September 2024 and March 2025. In exchange, Oramed will receive: A Note having an aggregate principal amount of $25M at issuance, with an original issue discount of 10.0%, that bears interest at a rate of 5.5% per annum, is convertible into shares of Scilex common stock at the option of holder at a conversion price equal to $1.09 and matures on the two -year anniversary of issuance; Warrants to purchase up to 3.75 million shares of Scilex common stock with an exercise price of $1.09 that are immediately exercisable and expire five years from issuance; and the application by Silex at closing of $12.5M of the proceeds from the New Financing from the non-Oramed purchasers towards the repayment of such amount of outstanding principal under the Oramed Senior Secured Promissory Note. Oramed agreed to further extend certain payments due from Scilex under the Senior Secured Promissory Note on September 23, 2024 to October 7, 2024. The closing of the New Financing is expected to occur on or about October 7, 2024, subject to satisfaction of certain closing conditions. After giving effect to these transactions, an aggregate of $54.2M of the original principal amount under the Senior Secured Promissory Note has been repaid or refinanced. Separately, Oramed and certain other institutional investors anticipate acquiring the right to receive an 8% royalty on the net sales of certain of Scilex’s products, including ZTlido. Oramed is entitled to receive 50% of such proceeds from the net sales of the products. Oramed’s purchase consideration in such transaction is intended to be satisfied through a reduction of $2.5 million of the outstanding principal balance on the Senior Secured Promissory Note. The closing of the royalty transaction is anticipated to occur contemporaneous with the closing of the New Financing.