Raphael Pharmaceutical Inc. Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Raphael Pharmaceutical performed this year. My goal is to cut through the corporate jargon so you can decide if this company belongs in your portfolio.

1. The Big Picture

Raphael Pharmaceutical is an Israeli research firm that develops drug therapies using cannabinoids. They aim to treat inflammatory conditions like rheumatoid arthritis and asthma. The company is currently moving from a research lab into the "wellness market" while trying to prove their formulas work as medical-grade drugs. They operate as a lean, virtual company, outsourcing their lab and clinical trial work to keep costs low.

2. The Numbers

As of March 31, 2026, the company had 20.18 million shares outstanding. With a market value that dipped as low as $9.4 million, this is a micro-cap stock. The company lost $4.2 million this year, mostly due to $2.8 million in research costs and $1.4 million in administrative expenses. They hold about $1.1 million in cash, which covers only 3 to 4 months of operations.

3. Highs and Lows

• The Big Win: They finished a Phase 1/2a study for their lead arthritis treatment in December 2024. The results were positive, helping 72% of participants manage symptoms with no serious side effects.
• New Launch: In August 2025, they launched "RaphaWell," a plant-based supplement for arthritis. This first move into the wellness market generated $150,000 in its first six months.
• Strategic Pivot: They stopped COVID-19 research to focus on asthma and autoimmune diseases, targeting a $12 billion annual market.
• Intellectual Property: In November 2025, they filed a new patent for their cannabinoid-delivery formula. This protects their work from generic competitors until 2045.

4. Financial Health

Raphael is a "smaller reporting company" with limited resources. They do not manufacture their own drugs, opting instead to hire third-party contractors. Their business model relies on winning FDA approval and then licensing their formulas to larger partners, with a target of 10% to 15% of future sales from these deals.

5. The Risks

Investing here is high-stakes. Consider these factors before making a move:

• Regulatory Hurdles: They need FDA approval to sell their products as medicine. If they fail, they must rely on the supplement market, which typically offers much lower profit margins.
• Funding: The company currently lacks enough cash to last the next 12 months and will need to raise $5 million to $7 million. If they raise this capital by selling more shares, your ownership percentage could be diluted by 30% to 50%.
• Clinical Success Rates: While early testing is promising, the drug development process is difficult. A large majority of drug candidates do not successfully complete the rigorous, multi-year clinical trials required for final approval.

6. The Road Ahead

The company is currently refining its formulas for asthma and other conditions. They plan to submit an application to the FDA by late 2026 to start human clinical trials in the U.S. Success in these trials would be a major milestone for attracting new investors and potential industry partners.

Investor Takeaway: Raphael Pharmaceutical is a high-risk, high-reward play. Because they are currently burning through cash and face significant regulatory hurdles, this stock is best suited for those who are comfortable with the volatility of early-stage biotech and the possibility of share dilution in the near future. Keep a close eye on their FDA application progress, as that will be the primary driver of their value moving forward.