RELATED PARTY TRANSACTIONS |
3 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2026 | ||||||||||||
| Related Party Transactions [Abstract] | ||||||||||||
| RELATED PARTY TRANSACTIONS |
In connection with the acquisition of Oratech completed on March 25, 2026, the Company entered into various financing and commercial arrangements with Oramed, which is considered a related party to the Company due to its significant ownership interest in the Company and representation on the Company’s board of directors.
As part of the transaction, the Company issued convertible promissory notes and warrants to Oramed. As of March 31, 2026, the Company recorded convertible promissory notes, net, of approximately $6.5 million attributable to Oramed and warrant liabilities of approximately $2.6 million attributable to warrants held by Oramed in connection with these financing arrangements. The carrying value of the convertible promissory notes reflects the allocation of proceeds among the various financing instruments and the related accounting treatment.
Refer to Note 3, Significant Accounting Policies, and Note 9, Convertible Promissory Notes, for additional information regarding the terms and accounting treatment of these financing arrangements.
In connection with the transaction, the Company completed the acquisition of Oratech pursuant to a SPA entered into with Oramed. Refer to Note 6, Asset Acquisition, for additional information regarding the transaction and the related accounting treatment. The acquired assets primarily included intellectual property and other contractual rights related to Oratech’s product development and clinical trial activities. In connection with the transaction, the Company also entered into arrangements related to future clinical trial activities.
As part of the consideration transferred in the transaction, the Company issued pre-funded warrants and freestanding warrants to Oramed. These instruments were classified as liabilities and recorded at fair value in accordance with applicable U.S. GAAP. As of March 31, 2026, liabilities associated with such pre-funded warrants and freestanding warrants issued to Oramed were approximately $4.0 million.
In addition, the Company agreed to make revenue sharing payments to Oramed based on future sales, subject to certain caps and termination provisions.
During the three months ended March 31, 2026, the Company recognized approximately $4.9 million of research and development expense associated with acquired in-process research and development assets that were determined to have no alternative future use.
The clinical trial services arrangements include future clinical development, project management, regulatory and operational support services expected to be provided over a 24-month period. Management’s estimate of the fair value associated with such arrangements required significant judgment and was based on assumptions regarding the scope of services, expected costs, specialized expertise, execution capabilities and market participant considerations. The Company believes the assumptions utilized are consistent with market participant assumptions.
As of March 31, 2026, the Company recorded a clinical trial services asset of $975 thousand associated with the estimated value of future services expected to be provided under these arrangements.
Certain members of the Company’s Board of Directors are affiliated with Oramed. |