NLS Pharmaceutics and Kadimastem Announce Binding Term Sheet to Merge
NLS Pharmaceutics and Kadimastem have announced a binding term sheet for a merger, creating a Nasdaq-traded biotechnology company focused on advancing Kadimastem's allogeneic cell therapy platform. The proposed transaction will result in Kadimastem becoming a wholly owned subsidiary of NLS, with Kadimastem's shareholders acquiring an 85% interest in NLS. The combined company is expected to operate under the name Kadimastem and trade on the Nasdaq Capital Market. Both companies have received commitments of support from shareholders representing over 40% of their respective outstanding shares. The merger aims to create a company with product candidates in advanced stages of clinical development, particularly in the areas of neurodegenerative diseases and potential diabetes cure.
NLS Pharmaceutics e Kadimastem hanno annunciato un accordo vincolante per una fusione, creando un'azienda biotecnologica quotata al Nasdaq, focalizzata sullo sviluppo della piattaforma di terapia cellulare allogenica di Kadimastem. La transazione proposta comporterà che Kadimastem diventi una controllata interamente posseduta da NLS, con gli azionisti di Kadimastem che acquisiranno un 85% di partecipazione in NLS. La società risultante si prevede opererà con il nome di Kadimastem e sarà quotata sul Nasdaq Capital Market. Entrambe le aziende hanno ricevuto impegni di supporto da parte di azionisti che rappresentano oltre il 40% delle rispettive azioni in circolazione. La fusione mira a creare un'azienda con candidati prodotto in fasi avanzate di sviluppo clinico, in particolare nel campo delle malattie neurodegenerative e nella potenziale cura del diabete.
NLS Pharmaceutics y Kadimastem han anunciado un acuerdo vinculante para una fusión, creando una empresa de biotecnología cotizada en Nasdaq, centrada en el avance de la plataforma de terapia celular alogénica de Kadimastem. La transacción propuesta resultará en que Kadimastem se convierta en una subsidiaria de propiedad total de NLS, con los accionistas de Kadimastem adquiriendo un 85% de participación en NLS. Se espera que la empresa combinada opere bajo el nombre de Kadimastem y se negocie en el Nasdaq Capital Market. Ambas empresas han recibido compromisos de apoyo de accionistas que representan más del 40% de sus acciones en circulación. La fusión tiene como objetivo crear una empresa con candidatos a productos en etapas avanzadas de desarrollo clínico, particularmente en las áreas de enfermedades neurodegenerativas y una posible cura para la diabetes.
NLS 제약과 카디마스탐(Kadimastem)은 합병을 위한 구속력 있는 조건서를 발표하며, 카디마스탐의 동종 세포 치료 플랫폼을 발전시키는 데 초점을 맞춘 나스닥 상장 생명공학 회사를 설립합니다. 제안된 거래는 카디마스탐이 NLS의 완전 소속 자회사가 되는 결과를 초래하며, 카디마스탐의 주주들은 NLS의 85% 지분을 인수하게 됩니다. 결합된 회사는 카디마스탐이라는 이름으로 운영될 것으로 예상되며, 나스닥 자본 시장에서 거래됩니다. 두 회사는 각각의 유통 주식의 40% 이상을 대표하는 주주들로부터 지원 약속을 받았습니다. 합병의 목표는 신경 퇴행성 질환 및 잠재적인 당뇨병 치료 분야에서 임상 개발의 고급 단계에 있는 제품 후보를 갖춘 회사를 만드는 것입니다.
NLS Pharmaceutics et Kadimastem ont annoncé un protocole d'accord contraignant pour une fusion, créant une entreprise de biotechnologie cotée au Nasdaq, axée sur l'avancement de la plateforme de thérapie cellulaire allogène de Kadimastem. La transaction proposée aboutira à ce que Kadimastem devienne une filiale entièrement détenue par NLS, les actionnaires de Kadimastem acquérant un 85% d'intérêts dans NLS. L'entreprise combinée devrait opérer sous le nom de Kadimastem et se négocier sur le Nasdaq Capital Market. Les deux entreprises ont reçu des engagements de soutien d'actionnaires représentant plus de 40% de leurs actions en circulation. La fusion vise à créer une entreprise avec des candidats produits à des stades avancés de développement clinique, notamment dans les domaines des maladies neurodégénératives et d'un éventuel traitement du diabète.
NLS Pharmaceutics und Kadimastem haben ein verbindliches Rahmenabkommen für eine Fusion bekannt gegeben, um ein an der Nasdaq gehandelte Biotechnologieunternehmen zu gründen, das sich auf die Weiterentwicklung der allogenen Zelltherapieplattform von Kadimastem konzentriert. Die vorgeschlagene Transaktion wird dazu führen, dass Kadimastem eine hundertprozentige Tochtergesellschaft von NLS wird, wobei die Aktionäre von Kadimastem einen 85% Anteil an NLS erwerben. Das kombinierte Unternehmen wird voraussichtlich unter dem Namen Kadimastem operieren und an Nasdaq Capital Market gehandelt werden. Beide Unternehmen haben Unterstützung von Aktionären erhalten, die mehr als 40% ihrer jeweiligen ausgegebenen Aktien repräsentieren. Das Ziel der Fusion besteht darin, ein Unternehmen mit Produktkandidaten in fortgeschrittenen klinischen Entwicklungsphasen zu schaffen, insbesondere im Bereich neurodegenerativer Erkrankungen und potenzieller Heilung für Diabetes.
- Merger creates a Nasdaq-traded biotechnology company with advanced clinical-stage product candidates
- Kadimastem's shareholders will acquire 85% interest in NLS, indicating strong confidence in Kadimastem's technology
- Over 40% shareholder support from both companies for the transaction
- Potential for accelerated development of allogeneic cell therapy platform
- Expanded market presence and potential for increased investor interest
- Significant dilution for existing NLS shareholders, retaining only 15% ownership
- Potential integration challenges and costs associated with merging two companies
- Uncertainty regarding regulatory approvals and successful completion of the transaction
Insights
The proposed merger between NLS Pharmaceutics and Kadimastem marks a significant development in the biotechnology sector, potentially creating a formidable player in the allogeneic cell therapy space. This strategic move could accelerate the advancement of Kadimastem's cell therapy platform, particularly in treating neurodegenerative diseases and diabetes.
Several key points warrant attention:
- Market Position: The merged entity will gain access to Nasdaq, enhancing its visibility and potentially improving access to capital. This could be important for funding ongoing clinical trials and future commercialization efforts.
- Pipeline Strength: The combination of NLS's expertise in biopharmaceuticals with Kadimastem's cell therapy platform could create a diversified and robust product pipeline. This synergy may mitigate risk and increase the chances of successful product development.
- Shareholder Support: With over
40% of shareholders from both companies backing the merger, there's a strong foundation for the deal's completion. However, investors should note that final approval is still pending. - Ownership Structure: The
85% ownership by Kadimastem shareholders suggests they see significant value in this merger, potentially indicating confidence in the combined entity's future prospects.
While the merger appears promising, investors should be aware of potential challenges, including integration risks and the inherent uncertainties in clinical-stage biotech companies. The success of the merged entity will largely depend on the progress of its clinical trials and its ability to navigate the complex regulatory landscape of cell therapies.
This merger announcement between NLS Pharmaceutics and Kadimastem presents an intriguing financial proposition for investors. Here's my breakdown of the key financial implications:
- Valuation Dynamics: The
85% ownership allocation to Kadimastem shareholders implies a significant premium to NLS's current market value. This suggests that Kadimastem's assets and potential are being highly valued in this deal. - Capital Market Access: By merging with Nasdaq-listed NLS, Kadimastem gains a backdoor listing on a major U.S. exchange. This could potentially lower the cost of capital and provide better liquidity for shareholders.
- Synergy Potential: While specific financial synergies aren't detailed, the combination of NLS's biopharmaceutical expertise with Kadimastem's cell therapy platform could lead to operational efficiencies and shared R&D costs.
- Funding Outlook: The merged entity may be in a stronger position to attract investment, important for funding the capital-intensive process of bringing cell therapies to market.
Investors should closely monitor upcoming financial disclosures for details on the combined entity's cash position, burn rate and funding requirements. The success of this merger will ultimately hinge on the company's ability to advance its clinical pipeline efficiently and navigate the complex regulatory landscape of cell therapies.
The proposed transaction will create a Nasdaq-traded, biotechnology company with product candidates in advanced stages of clinical development and focused on advancing Kadimastem's allogeneic cell therapy platform
Each of Kadimastem and NLS Pharmaceutics has received commitments of support for the transaction from shareholders representing more than
ZURICH, SWITZERLAND and NESS ZIONA, ISRAEL / ACCESSWIRE / July 29, 2024 / NLS Pharmaceutics Ltd. (NASDAQ:NLSP) ("NLS"), a biopharmaceutical company. and Kadimastem Ltd ("KDST.TA", "Kadimastem"), a clinical-stage cell therapy company developing and manufacturing "off-the-shelf" allogeneic cell products for the treatment of neurodegenerative diseases and potential cure of diabetes, announced today that they have entered into a binding term sheet for a transaction under which Kadimastem is anticipated to become a wholly owned subsidiary of NLS, and Kadimastem's shareholders will acquire an
About the Proposed Transaction
The proposed Transaction will be affected through a reverse triangular structure in which Kadimastem will become a wholly owned subsidiary of NLS. In consideration, NLS will issue its shares to the Kadimastem shareholders who, after completing the Transaction, will hold
The Transaction is subject to approval by Nasdaq and is structured so that NLS will remain an SEC reporting company whose shares are listed on the Nasdaq Capital Market. All but one of the NLS officers and directors is expected to resign from their positions at NLS.
Following the Transaction, the parties expect to continue developing NLS's promising, first-in class Dual Orexin Agonist platform ("DOXA") within the merged company. The remaining NLS assets are expected to be divested subject to a contingent value rights ("CVR") agreement, the proceeds of which will be distributed entirely to the current shareholders of NLS.
At the closing of the Transaction, Kadimastem will be required to have
The binding term sheet has been approved by the boards of directors of both companies. The definitive agreement will include customary closing conditions, including certain regulatory approvals, and approval from the shareholders of both NLS and Kadimastem Each of Kadimastem and NLS has received commitments of support for the Transaction from shareholders representing more than
In addition, as a condition to the consummation of the Transaction, the liabilities of NLS to its vendors and insiders will be settled and removed from its balance sheet.
The definitive agreement is expected to be executed in September 2024. The Transaction is expected to close before December 31, 2024.
‟We are pleased to be working together with Kadimastem as our pipelines hold significant synergies, especially in the area of diabetes which is often associated with sleep-wake dysregulation manifesting as insomnia, excessive daytime sleepiness and altered sleep architecture,″ said Alex Zwyer, Chief Executive Officer of NLS. ‟The merger with Kadimastem reflects the continued commitment of our management team and board of directors to deliver long-term value to our stockholders. In particular, NLS shareholders will have the opportunity to benefit from the equity of the merged company and, through the contingent value rights agreement, from the value of our legacy assets, including Mazindol.″
Professor Michel Revel, Kadimastem's CSO said, "I'm thrilled about this merger, and believe the combined company presents a great opportunity to enhance our portfolio and product candidates. In the past, I had the privilege of working on a medicine for multiple sclerosis, Rebif®, taking it from the lab to the market and transforming it into a blockbuster product. Similarly, I see tremendous potential here to develop our AstroRx® product candidate for ALS patients, as well as advancing our diabetes product IsletRx. Together with the assets from NLS. The completion of the Transaction is expected to promote and expand the development of Kadimastem's groundbreaking technological platform."
Ronen Twito, Kadimastem's Executive Chairman and President, commented, "The merger with NLS will enhance our visibility to the market as a Nasdaq listed company and strengthen our portfolio with the addition of DOXA. Moreover, as previously reported, our AstroRx® product candidate for Amyotrophic Lateral Sclerosis, also known as ALS, treatment received FDA approval for a Phase IIa multi-site clinical trial in the U.S. In addition, our joint development of a diabetes product with iTolerance, a U.S.-based company, proceeding towards pre-Investigational New Drug submission to the FDA. We believe that the exposure of the merged company to the U.S. capital markets will enable us to develop the company's clinical assets and increase shareholder value."
About Kadimastem
Kadimastem is a clinical stage cell therapy company whose shares are listed on the Tel Aviv Stock Exchange "KDST.TA". Kadimastem is developing "off-the-shelf", allogeneic, proprietary cell products based on its technology platform for the expansion and differentiation of Human Embryonic Stem Cells (hESCs) into functional cells. AstroRx®, Kadimastem‘s lead product, is an astrocyte cell therapy in clinical development for the treatment for ALS and in pre-clinical studies for other neurodegenerative indications
IsletRx is Kadimastem‘s treatment for diabetes. IsletRx is comprised of functional pancreatic islet cells producing and releasing insulin and glucagon. IsletRx is intended to treat and potentially cure patients with insulin-dependent diabetes.
Kadimastem was founded by Professor Michel Revel, CSO of Kadimastem, who is Professor Emeritus of Molecular Genetics at the Weizmann Institute of Science. Professor Revel received the Israel Prize for the invention and development of Rebif®, a multiple sclerosis drug sold worldwide.
About NLS Pharmaceutics Ltd.
NLS Pharmaceutics Ltd. is a global development-stage biopharmaceutical company, working with a network of world-class partners and internationally recognized scientists. NLS is focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders. Headquartered in Switzerland and founded in 2015, NLS is led by an experienced management team with a track record of developing and commercializing product candidates. For more information, please visit www.nlspharma.com.
Safe Harbor Statement
This press release contains expressed or implied forward-looking statements pursuant to U.S. Federal securities laws. For example, NLS is using forward-looking statements when it discusses the expected execution of a definitive agreement, and the expected timing of the execution of the definitive agreement and closing of the Transaction, the expected structure of the Transaction, the potential benefits of NLS' and Kadimastem's products and product candidates, the positive effects observed by Kadimastem's compounds, the potential development of additional compounds and that the new product candidates are expected to further enhance the understanding and treatment of neurodegenerative processes. These forward-looking statements and their implications are based on the current expectations of the management of NLS and Kadimastem, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements; changes in technology and market requirements; either or both companies may encounter delays or obstacles in launching and/or successfully completing their clinical trials; the companies' products may not be approved by regulatory agencies; their technologies may not be validated as they progress and their methods may not be accepted by the scientific community; either of both of the companies may be unable to retain or attract key employees whose knowledge is essential to the development of their products; unforeseen scientific difficulties may develop with the products being advanced by the companies; their products may wind up being more expensive than anticipated; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; the companies' patents may not be sufficient; their products may harm recipients; changes in legislation may adversely impact either or both of the companies; inability to timely develop and introduce new technologies, products and applications; and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of candidate products to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, neither Kadimastem nor NLS undertakes any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting NLS is contained under the heading "Risk Factors" in NLS' annual report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC), which is available on the SEC's website, www.sec.gov, and in subsequent filings made by NLS with the SEC.
Kadimastem Contact:
Sarah Bazak
Business Operations Manager
s.bazak@kadimastem.com
NLS Contact:
Investor Relations Contact
InvestorRelations@nls-pharma.com
www.nlspharma.com
SOURCE: NLS Pharmaceutics AG
View the original press release on accesswire.com
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