Hepion Pharmaceuticals, Inc. Announces Termination of Merger Agreement with Pharma Two B Ltd.

Rhea-AI Summary

Hepion Pharmaceuticals (NASDAQ: HEPA) has announced the termination of its merger agreement with Pharma Two B . The merger agreement, which was initially entered into on July 19, 2024, has been mutually terminated with no termination fees required from either party. As a result, Hepion has cancelled its special stockholders meeting scheduled for December 12, 2024, and withdrawn the proposals outlined in its Definitive Proxy Statement filed with the SEC on November 8, 2024.

Positive

• No termination fees required from either party

Negative

• Termination of strategic merger agreement that could have expanded company's portfolio
• Loss of potential business combination opportunities and synergies
• Cancellation of planned corporate action indicates strategic setback

Insights

Financial Analyst

The termination of the merger agreement between Hepion Pharmaceuticals and Pharma Two B represents a significant setback for both companies, particularly for HEPA which has a micro-cap valuation of just $4.3M. The mutual termination without penalties suggests both parties identified insurmountable obstacles or misalignment in their strategic objectives. For Hepion, this development creates uncertainty about its future direction in developing treatments for NASH and HCC. The cancellation of the special stockholder meeting and withdrawal of proxy materials indicates a complete reset of corporate strategy. With such a small market cap, the company's ability to independently fund its clinical programs may be severely , potentially necessitating alternative strategic options or capital raising initiatives.

Legal Expert

The mutual termination agreement without financial penalties demonstrates careful legal structuring of the original merger agreement's exit clauses. The swift withdrawal of the Form F-4 proxy materials and cancellation of the stockholder meeting reflects proper corporate governance and compliance with SEC regulations. This clean break minimizes legal exposure and shareholder litigation risks that often accompany failed mergers. However, shareholders should scrutinize upcoming disclosures for details about the termination rationale and the company's go-forward strategy. The board's fiduciary duties now shift to evaluating alternative strategic options to maintain stockholder value.

EDISON, N.J., Dec. 11, 2024 (GLOBE NEWSWIRE) -- Hepion Pharmaceuticals, Inc. (Nasdaq: HEPA) (the “Company” or “Hepion”), a clinical stage biopharmaceutical company that had been developing a treatment for non-alcoholic steatohepatitis (“NASH”), hepatocellular carcinoma (“HCC”), and other chronic liver diseases, today announced that it has entered into a termination agreement with Pharma Two B Ltd. which terminates the merger agreement between the two parties that was previously entered into on July 19, 2024.

Neither party will be required to pay the other a termination fee as a result of the mutual decision to terminate the agreement.

Hepion also announced that its previously announced special meeting of its stockholders scheduled for December 12, 2024 has been cancelled and that it has withdrawn from consideration by its stockholders the proposals set forth in the Company’s Definitive Proxy Statement on Form F-4 filed with the U.S. Securities and Exchange Commission on November 8, 2024.

About Hepion Pharmaceuticals

Hepion is a biopharmaceutical company headquartered in Edison, New Jersey, previously focused on the development of drug therapy for treatment of chronic liver diseases. This therapeutic approach targets fibrosis, inflammation, and shows potential for the treatment of hepatocellular carcinoma (“HCC”) associated with non-alcoholic steatohepatitis (“NASH”), viral hepatitis, and other liver diseases. Hepion’s cyclophilin inhibitor, rencofilstat, was being developed to offer benefits to address multiple complex pathologies related to the progression of liver disease. In December 2023, Hepion’s board of directors approved a strategic restructuring plan to preserve capital by reducing operating costs. Additionally, Hepion initiated a process to explore a range of strategic and financing alternatives focused on maximizing stockholder value within the current financial environment and NASH drug development landscape. On April 19, 2024, Hepion announced that it has begun wind-down activities in its ASCEND- NASH clinical trial which wind-down activities have since been completed and the trial has been closed. Hepion is continuing efforts, to the extent that cash is available, to provide any value derived from rencofilstat to its shareholders.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Hepion’s future financial or operating performance. When used in this press release, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions identify forward-looking statements. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, our ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; risks associated with delays, uncertainties with respect to lengthy and expensive clinical trials, that results of earlier studies and trials may not be predictive of future trial results; uncertainties of government or third party payer reimbursement; limited sales and marketing efforts and dependence upon third parties; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. Hepion Pharmaceuticals does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in Hepion Pharmaceuticals’ Form 10-K for the year ended December 31, 2023, and other periodic reports filed with the Securities and Exchange Commission.

Contact Information
Hepion Pharmaceuticals
info@hepionpharma.com

FAQ

When was the original merger agreement between Hepion Pharmaceuticals and Pharma Two B signed?

The original merger agreement between Hepion Pharmaceuticals and Pharma Two B was signed on July 19, 2024.

Will there be any termination fees for the cancelled HEPA merger agreement?

No, neither Hepion Pharmaceuticals nor Pharma Two B will be required to pay any termination fees as it was a mutual decision to terminate the agreement.

What stockholder meeting did HEPA cancel due to the merger termination?

Hepion cancelled its special stockholder meeting that was scheduled for December 12, 2024.

What regulatory filings did HEPA withdraw after the merger termination?

Hepion withdrew the proposals set forth in its Definitive Proxy Statement on Form F-4 that was filed with the SEC on November 8, 2024.