Rafael Holdings finalizes merger with Cyclo Therapeutics

Published 26/03/2025, 11:58
Rafael Holdings finalizes merger with Cyclo Therapeutics

NEWARK, N.J. - Rafael Holdings, Inc. (NYSE: RFL) has successfully completed its business combination with Cyclo Therapeutics, Inc. (NASDAQ: CYTH), as announced today. Following shareholder approval, Rafael Holdings has issued shares of its Class B common stock to Cyclo Therapeutics shareholders, representing approximately 22% of the combined company. Additionally, warrants to purchase Rafael Class B common stock were issued to certain Cyclo warrant holders. According to InvestingPro data, CYTH has demonstrated strong recent momentum with a 7.6% return over the past week and maintains impressive gross profit margins of 91.2%.

The merger marks a strategic advancement for Rafael Holdings in its pursuit of developing clinical stage assets for diseases with high unmet medical needs. The company has identified Trappsol® Cyclo™, a treatment candidate for Niemann-Pick Disease Type C1 (NPC1), as its lead clinical asset. TransportNPC™, the Phase 3 clinical trial for Trappsol® Cyclo™, has been fully enrolled, with 48-week interim analysis results anticipated in mid-2025. InvestingPro analysts project profitability for the company this year, despite current challenges with cash burn rates. Get access to 10+ additional exclusive ProTips and comprehensive financial analysis with an InvestingPro subscription.

Bill Conkling, President and CEO of Rafael Holdings, expressed optimism regarding the merger’s completion and the progress of the clinical trial. N. Scott Fine, CEO of Cyclo Therapeutics, also conveyed satisfaction with the merger, emphasizing the strengthened commitment to deliver trial results for shareholders and NPC patients.

Niemann-Pick Disease Type C1 is a rare, fatal genetic disorder for which Trappsol® Cyclo™ is being evaluated. The TransportNPC™ trial is a double-blind, placebo-controlled study involving pediatric and adult patients.

Rafael Holdings’ portfolio includes a 100% interest in Cyclo Therapeutics, LLC, and majority interests in several other pharmaceutical and medical device companies. Cyclo Therapeutics’ dedication to developing life-changing medicines for patients with diseases is now bolstered by the merger. With a market capitalization of $20.7 million and year-to-date price return of 22.1%, the company shows promising market performance despite its current financial health score indicating some challenges.

Legal advisement for the transaction was provided by Schwell Wimpfheimer & Associates for Rafael Holdings and Fox Rothschild LLP for Cyclo Therapeutics. Cassel Salpeter & Co. served as the financial advisor to the Cyclo Therapeutics Board of Directors’ special committee.

This merger is a strategic move for both companies, aiming to leverage their combined resources to advance clinical trials and bring potential treatments to market. The information for this report is based on a press release statement.

In other recent news, Cyclo Therapeutics announced that its shareholders have approved a merger agreement with Rafael Holdings, a move that will result in Cyclo Therapeutics becoming a wholly owned subsidiary of Rafael. The merger, which received significant support from shareholders, is expected to close on March 25, 2025, pending the satisfaction of customary closing conditions. In addition, Cyclo Therapeutics secured $2.5 million in funding through a convertible promissory note with Rafael Holdings, adding to a total of $18 million in convertible debt agreements since June 2024. This funding is intended for working capital and general corporate purposes. Cyclo Therapeutics also reported positive findings from a Phase 3 trial of Trappsol® Cyclo™ for treating Niemann-Pick Disease Type C1, with promising results presented at the WORLDSymposium™. The company is currently facing a potential Nasdaq delisting due to not holding its annual shareholder meeting within the required timeframe, and it must submit a compliance plan by February 24, 2025. Cyclo Therapeutics has also extended its merger agreement deadline with Rafael Holdings to March 31, 2025, to allow more time for SEC review. These developments reflect the company’s ongoing strategic and financial activities as it progresses through its merger process and clinical trials.

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