Oramed Sells Oral-Insulin Unit to Lifeward, Takes Major Stake in Exoskeleton Maker

Oramed Pharmaceuticals Inc. has completed the sale of its oral drug development arm to Israeli medical robotics company Lifeward Ltd., in a transaction that turns the longtime oral-insulin developer into one of Lifeward’s most influential stakeholders.

The deal closed March 25 and was detailed in a Form 8-K Oramed filed with the Securities and Exchange Commission on March 31. Oramed transferred all shares of its wholly owned subsidiary, Oratech Pharma Inc., to Lifeward. In exchange, Lifeward issued Oramed a package of stock and warrants, revenue-sharing rights tied to exoskeleton sales, and participation in a new round of debt financing.

A sale that keeps Oramed deeply involved

Rather than a clean exit, the structure gives Oramed several ways to benefit from Lifeward’s future performance: a substantial equity position, a senior creditor claim, and a royalty-like stream connected to Lifeward’s flagship robotic devices.

At closing, Lifeward issued Oramed 2,256,476 ordinary shares and pre-funded warrants, structured to keep Oramed below certain ownership thresholds. Oramed also received 1,296,296 additional warrants to buy more Lifeward shares at a predetermined price over time, according to company filings.

Royalty tied to ReWalk exoskeleton revenue

Beyond the equity, Lifeward agreed to pay Oramed a quarterly royalty equal to 4% of net revenue from its ReWalk Personal Exoskeleton systems and related extended warranties for up to 10 years. The revenue-sharing arrangement is capped and may terminate early if certain conditions are met, including if Lifeward’s market capitalization reaches a specified level.

The transaction originates from a share purchase agreement signed Jan. 12 among Oramed, Oratech and Lifeward, which Oramed first disclosed in a January Form 8-K. The March 31 filing confirms all closing conditions were met.

Financing lifeline: $10 million in senior secured convertible notes

The Oratech sale was paired with new financing for Lifeward. As part of the same broader arrangement, Lifeward issued $10 million in senior secured convertible notes to Oramed and other investors in a private placement. This represents the first tranche of up to $18 million in notes Oramed agreed to purchase.

The notes carry 8% annual interest, mature in three years, and are convertible into Lifeward shares at a split-adjusted price of about $5.40 per share, subject to anti-dilution provisions.

Lifeward said the overall structure provides access to as much as $47 million in potential capital when including warrants and additional securities tied to the notes. Oramed, meanwhile, received further warrants linked to possible note conversion, adding more equity upside on top of its initial stake.

Strategic shift for both companies

When the strategic partnership was announced in January, Lifeward said the Oratech acquisition would help transform it into “a diversified biomedical innovation company,” combining rehabilitation robotics with a clinical-stage oral drug platform. Lifeward also said the structure “provides a clear path to profitability” by bringing in a committed strategic investor.

Oramed has described the deal as a way to unlock value from its Protein Oral Delivery (POD) technology while reducing the cash it spends directly on late-stage trials. Chief executive Nadav Kidron said in earlier disclosures that partnering Oratech with Lifeward lets Oramed “leverage our POD platform and retain meaningful upside” while shifting day-to-day development costs and operational risk to the new owner.

Background: Oramed’s insulin-pill ambitions and Oratech’s path

Oramed became known for its pursuit of an insulin pill for diabetes, but halted a large U.S. Phase 2 trial after disappointing results. Since then, the company has repositioned itself as both a drug platform developer and an opportunistic capital allocator, including structured investments in other companies and a dividend paid from proceeds.

Oratech was originally formed as a joint venture with Chinese partner Hefei Tianhui Biotech to advance oral formulations based on POD technology, including an oral insulin capsule. Oramed later consolidated full ownership. Under Lifeward, Oratech is expected to run a 60-patient U.S. trial focused on specific high-responder subgroups of diabetes patients.

Lifeward’s diversification—and governance changes

For Lifeward, headquartered in Yokneam Illit, Israel, the transaction is both diversification and financial necessity. Formerly known as ReWalk Robotics, the company makes powered exoskeleton systems and other rehabilitation devices for people with spinal cord injuries and stroke. It has struggled to achieve consistent profitability and has undertaken multiple reverse stock splits, including a 1-for-12 split in February, to maintain its Nasdaq listing while raising new capital.

On March 25, the same day the deal closed, two Lifeward directors resigned, and the company expanded its board from five to eight members, appointing three new directors. Lifeward said the resignations were not due to disagreements with the company.

A near-control stake—without crossing key thresholds

Lifeward’s disclosures indicate Oramed is expected to hold at least 45% of Lifeward’s voting power through its shares soon after closing and could ultimately own up to 49.99% on a fully diluted basis if warrants are exercised and notes are converted. That would make Oramed Lifeward’s largest shareholder and a key financing source, while stopping short of formal majority control.

The offering of notes and warrants was conducted as a private placement under Section 4(a)(2) of the Securities Act of 1933 and Regulation D, meaning the securities are restricted and cannot be freely resold without registration or another exemption. The use of pre-funded warrants and ownership caps also reflects Nasdaq rules that often require shareholder approval before a listed company issues more than 19.99% of its outstanding shares in certain transactions.

What happens next

For Oramed, the Oratech sale removes a major source of research-and-development expense while preserving multiple potential return paths: equity appreciation in Lifeward, interest income and potential conversion gains on the notes, warrant upside, and a revenue share tied to ReWalk sales.

For Lifeward, the new capital and the addition of a late-stage drug platform broaden its ambitions beyond exoskeletons at a time when traditional equity financing has been constrained for many small health-care companies.

Execution will be the key test. Lifeward must integrate Oratech, advance complex clinical trials, and maintain sales and support for its robotic systems while managing a capital structure that gives one strategic partner significant influence. Oramed, having turned its oral insulin effort into a layered financial asset, will be tested on whether that influence translates into long-term value as Lifeward’s—and Oratech’s—fortunes unfold.