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KIRYAT ONO, ISRAEL and EDISON, N.J. - Pharma Two B Ltd., a pharmaceutical company focused on developing treatments for neurological disorders, and Hepion Pharmaceuticals (NASDAQ:HEPA), Inc., a biopharmaceutical company targeting chronic liver diseases, have jointly filed a registration statement with the U.S. Securities and Exchange Commission (SEC). This filing is a significant step towards their proposed merger, aiming to create a combined entity that will operate under the Pharma Two B name and is anticipated to close in the fourth quarter of 2024.
The registration statement, which includes a proxy statement and prospectus, is part of the process to facilitate Pharma Two B's transition to a publicly traded company on the Nasdaq exchange under the ticker symbol PHTB. The merger is subject to approval by shareholders of both companies, regulatory authorities, and other customary closing conditions.
Pharma Two B's leading product candidate, P2B001, is an investigational treatment for Parkinson's Disease (PD) that has shown promising results in Phase 3 clinical trials. P2B001 is a novel, fixed-dose combination of pramipexole and rasagiline, designed to minimize side effects associated with current PD treatments. The company holds worldwide patents for P2B001's pharmaceutical composition and method of treatment.
Hepion Pharmaceuticals has been developing rencofilstat, a cyclophilin inhibitor with potential benefits for various chronic liver diseases, including non-alcoholic steatohepatitis (NASH) and hepatocellular carcinoma (HCC). Following a strategic restructuring in December 2023 and winding down its ASCEND-NASH clinical trial in April 2024, Hepion is seeking to maximize shareholder value through this merger.
Financial advisors for the transaction include A.G.P./Alliance Global Partners (NYSE:GLP) for Hepion and Laidlaw & Company (UK) Ltd. for Pharma Two B. Legal advisors include Sheppard, Mullin, Richter & Hampton LLP, Lipa Meir & Co., Sullivan & Worcester LLP, Meitar Law Offices, and Goodwin Procter LLP.
The announcement of this filing provides investors and stakeholders with important information about the proposed merger and the strategic direction of the combined company. It is important to note that the registration statement has yet to become effective and details may change. This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy securities.
In other recent news, Hepion Pharmaceuticals has undergone significant changes, with a major shift in executive leadership and a definitive merger agreement. The company announced an alteration in its executive team, with John Cavan stepping down from his roles as interim Chief Executive Officer and Chief Financial Officer for personal reasons. John Brancaccio, the company's executive chairman, has taken on these roles in the interim.
In addition to the leadership changes, Hepion Pharmaceuticals has also announced a merger agreement with Pharma Two B Ltd., an Israeli firm developing a treatment for Parkinson's disease. The merger, part of a series of strategic alternatives pursued by Hepion's Board of Directors, is expected to close in the fourth quarter of 2024. Upon completion, Pharma Two B equity-holders will own approximately 85% of the combined entity, with Hepion shareholders holding the remaining 15%.
The combined company will retain the Pharma Two B name and focus on advancing P2B001, a treatment for Parkinson’s disease, towards a New Drug Application submission planned for the first half of 2026. Concurrent with the merger's closing, an $11.5 million private financing will adjust the ownership distribution. Hepion has also sold $2.9 million in Senior Unsecured Notes to institutional investors, with $600.0 thousand advanced to Pharma Two B. These are recent developments that highlight the strategic moves by both companies.
InvestingPro Insights
As Hepion Pharmaceuticals (HEPA) prepares for its merger with Pharma Two B, investors are closely watching the company's financial health and market performance. According to InvestingPro data, Hepion has a market capitalization of $4.27 million, which reflects its size within the biopharmaceutical industry. The stock has experienced significant volatility, with a 1-year price total return of -90.0%, indicating that the share price has faced considerable downward pressure over the past year.
Moreover, Hepion's balance sheet reveals a critical strength and a potential concern. The company holds more cash than debt, which is reassuring for investors concerned about financial stability, especially in the context of a merger. However, an InvestingPro Tip points out that Hepion is quickly burning through cash, which could be a matter of concern regarding its long-term financial runway and the successful integration with Pharma Two B.
The company's stock price movements have been quite volatile, which may influence investor sentiment and the perception of risk associated with the stock. This is particularly relevant as the proposed merger could bring about significant changes to the company's operations and financial outlook. For those interested in a deeper analysis, InvestingPro provides additional tips on Hepion Pharmaceuticals, which can be found at InvestingPro.
These insights are crucial for investors and stakeholders to understand the financial nuances as they consider the implications of the upcoming merger with Pharma Two B. The combined entity's future will be shaped by both companies' existing financial health and market performance, making these metrics and tips essential for an informed investment decision.
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