ZURICH, SWITZERLAND and NESS ZIONA, ISRAEL - NLS Pharmaceutics Ltd. (NASDAQ:NLSP) and Kadimastem Ltd. (TASE:KDST.TA) have announced a definitive merger agreement aimed at advancing treatments for neurodegenerative diseases and diabetes. The transaction, expected to close in January 2025, is subject to shareholder and regulatory approvals.
The combined entity will focus on NLS's Dual Orexin Agonist platform and Kadimastem's allogeneic cell therapy program. Following the merger, NLS plans to divest certain legacy assets, with net proceeds distributed to its shareholders and warrant holders as outlined in a contingent value agreement.
NLS will issue common stock to Kadimastem's shareholders, with an estimated post-transaction share split of 80% for Kadimastem stakeholders and 20% for NLS stakeholders. This split is adjustable based on the companies' closing cash and indebtedness.
Alex Zwyer, CEO of NLS, expressed confidence in the merger's potential to enhance shareholder value and advance their therapeutic platforms. Kadimastem's Executive Chairman & President, Ronen Twito, highlighted the benefits of exposure to U.S. capital markets and the upcoming Phase 2a clinical trial of AstroRx®, a candidate for ALS treatment.
Professor Michel Revel, CSO of Kadimastem, sees the merger as a significant opportunity to further develop their product candidates, including a treatment for diabetes and ALS.
The merger combines NLS's expertise in central nervous system disorders with Kadimastem's cell therapy products derived from Human Embryonic Stem Cells. Kadimastem's IsletRx aims to treat and potentially cure insulin-dependent diabetes, while AstroRx® is in clinical development for ALS treatment.
The companies caution that the forward-looking statements in the press release are subject to various risks and uncertainties, which could cause actual results to differ materially from those anticipated.
This news is based on a press release statement and provides a factual summary of the planned merger between NLS Pharmaceutics and Kadimastem.
In other recent news, NLS Pharmaceutics has been busy with a series of significant developments. The Swiss biopharmaceutical company announced a 1-for-40 reverse share split, which was approved by shareholders and is expected to reduce the number of outstanding common shares from approximately 46.88 million to around 1.17 million. This restructuring move is part of the company's ongoing efforts to manage its capital structure and aims to increase the per-share trading price of the company's common shares.
Additionally, NLS Pharmaceutics has announced a strategic merger with Kadimastem Ltd, resulting in Kadimastem becoming a wholly owned subsidiary of NLS. This merger is set to enhance the development of Kadimastem's cell therapy platform. The company has also reported successful preclinical results for compounds targeting Parkinson's Disease, with plans to develop two new successors, AEX-230 and AEX-231, for neurodegenerative disorders.
In terms of financial developments, NLS Pharmaceutics has entered into an agreement to issue and sell over 3 million common shares and issue warrants in a private placement, with H.C. Wainwright & Co. managing the offering. These are among the recent developments that continue to shape the trajectory of NLS Pharmaceutics.
InvestingPro Insights
As NLS Pharmaceutics Ltd. (NASDAQ:NLSP) prepares for its merger with Kadimastem Ltd., investors should be aware of several key financial metrics and trends that could impact the company's future. According to InvestingPro data, NLSP's market capitalization stands at a modest $6.83 million, reflecting its current position in the biotech sector.
The company's financial health presents some challenges. InvestingPro Tips highlight that NLSP is not profitable over the last twelve months, with an adjusted operating income of -$6.31 million. This aligns with the broader context of the merger, as the company seeks to strengthen its position and advance its therapeutic platforms.
Investors should note that NLSP's stock has experienced significant volatility. An InvestingPro Tip indicates that the stock price has fallen substantially over the last year, with a one-year price total return of -85.94%. This decline is particularly relevant given the upcoming merger, as it may affect the final share distribution between NLS and Kadimastem stakeholders.
Despite these challenges, there may be potential upside. The InvestingPro Fair Value for NLSP is estimated at $4.23, compared to its previous closing price of $3.60. This suggests that the stock might be undervalued, which could be of interest to investors considering the company's future prospects post-merger.
For those seeking a more comprehensive analysis, InvestingPro offers additional insights, with 10 more tips available for NLSP. These additional tips could provide valuable context for understanding the company's position as it moves towards this significant corporate action.
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