ZURICH, SWITZERLAND AND NESS ZIONA, ISRAEL - NLS Pharmaceutics Ltd. (NASDAQ:NLSP), a micro-cap pharmaceutical company with a current market capitalization of $3.24 million, and Kadimastem Ltd., a company engaged in developing cell therapy products for neurodegenerative diseases and diabetes, have announced plans to close their merger by the end of January 2025. According to InvestingPro data, NLSP has faced significant challenges, with its stock declining nearly 89% over the past year. This strategic move follows their recent request for a Pre-Investigational New Drug (Pre-IND) meeting with the U.S. Food and Drug Administration (FDA) for iTOL102, a novel therapy for Type 1 Diabetes.
The Pre-IND submission, a collaborative effort with Miami-based regenerative medicine company iTolerance, Inc., represents a significant step towards clinical development of iTOL102. InvestingPro analysis reveals the company's weak financial health score of 1.58, with current liabilities exceeding liquid assets - crucial factors as the company pursues this development pathway. The investigational biologic combines allogeneic human stem cell-derived pancreatic islets with an immunomodulator, aiming to potentially cure Type 1 Diabetes. This follows a successful Initial Targeted Engagement for Regulatory Advice on CBER/CDER Products (INTERACT) meeting earlier this year.
The iTOL102 product was evaluated at the Diabetes Research Institute at the University of Miami School of Medicine, where it demonstrated functional insulin release and disease reversal in an animal model. The treatment combines iTolerance's proprietary SA-FasL microgel (iTOL-100), an immune modulator, with Kadimastem's IsletRx, insulin-producing islet cells derived from human pluripotent stem cells.
Ronen Twito, Executive Chairman and CEO of Kadimastem, emphasized the importance of the FDA submission in the development of iTOL102 and the potential market introduction of this therapy. Dr. Anthony Japour, CEO of iTolerance, highlighted the combined effort to address the critical need for a diabetes cure without lifelong immunosuppression.
Alexander Zwyer, CEO of NLS Pharmaceutics, expressed optimism about the merger's impact on the company's pipeline and growth trajectory. The merger is subject to conditions, including shareholder approval from both companies.
NLS Pharmaceutics is known for developing therapies for central nervous system disorders, while Kadimastem focuses on cell therapy products derived from human embryonic stem cells. iTolerance is developing technologies to enable cell therapy without the need for chronic immunosuppression. With a current ratio of 0.15, InvestingPro subscribers can access 8 additional key insights about NLSP's financial position and market performance, essential for understanding the company's development capabilities.
The information in this article is based on a press release statement and is intended for informational purposes only.
In other recent news, NLS Pharmaceutics Ltd. has made significant strides in its biopharmaceutical research and financial restructuring. The company has made substantial progress in its preclinical studies of Dual Orexin Receptor Agonists (DOXAs), which show potential in treating sleep and neurodegenerative diseases. Preliminary results suggest that one of the compounds, AEX-41, may improve wakefulness and sleep quality in narcolepsy models.
Financially, NLS has eliminated debt and strengthened its balance sheet through private placements totaling $4.2 million. Despite a concerning current ratio of 0.15, as noted by InvestingPro analysts, the company has regained Nasdaq compliance and extended its operational runway to approximately 18 months.
The company has also announced a merger with Kadimastem Ltd., a strategic move expected to combine NLS's DOXA program with Kadimastem's cell-based therapies for neurodegenerative and diabetes conditions. Post-merger, NLS plans to divest certain legacy assets, with net proceeds distributed to its shareholders and warrant holders.
Moreover, NLS Pharmaceutics has set terms for a $1 million private placement offering and implemented a 1-for-40 reverse share split. The latter move reduced the number of outstanding common shares from approximately 46.88 million to around 1.17 million. These developments underscore NLS Pharmaceutics' commitment to advancing treatments for neurodegenerative diseases and managing its capital structure.
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