The merged company plans to focus on NLS’s Dual Orexin Agonist (DOA) platform and Kadimastem’s allogenic cell therapy program. Image credit: Lightspring / Shutterstock.

Switzerland-based NLS Pharmaceutics and Israel-headquartered Kadimastem have signed a definitive merger agreement, with plans to form a joint biopharmaceutical aimed at developing therapies for neurogenerative diseases and diabetes.

As per the 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, contingent on cash and debt for both companies at closing. The deal is expected to close in January 2025.

Following the announcement, stock prices for both companies surged. Kadimastem’s stock was up by over 22% in trading today (5 November) at the Tel Aviv Stock Exchange. Meanwhile, NLS’s stock closed at $4.39 on Nasdaq yesterday, up by 21.9% compared to the market close on the previous working day (1 November).

NLS plans to divest some of its legacy assets, including extended-release formulations of mazindol, which is marked as Quilience and Nolazol for treating narcolepsy. The company plans to distribute the net proceeds from these sales to its shareholders and warrant holders as outlined in a contingent value agreement.

The merged company plans to focus on NLS’s Dual Orexin Agonist (DOA) platform and Kadimastem’s allogeneic cell therapy program. The combined entity plans to start a Phase IIa US-based trial evaluating Kadimastem’s cell therapy AstroRx as a treatment for amyotrophic lateral sclerosis (ALS), following the deal close. AstroRx is an allogeneic cell therapy derived from embryonic astrocytes, a type of glial cell that makes up the central nervous system.

In February 2023, Kadimastem reported positive data from an open-label Phase I/IIa trial (NCT03482050) of AstroRx in 10 ALS patients. Clinical benefit was seen three months post administration of AstroRx. The two doses of the therapy were well tolerated, with the company reporting no treatment-emergent adverse events.

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The companies also intend to file for a pre-investigational new drug application (IND) with the US Food and Drug Administration (FDA) meeting for Kadimastem’s islet cell therapy, IsletRx, as a treatment for insulin-dependent diabetes.

The planned merger was first announced in July, however, the companies initially planned for Kadimastem to become a wholly owned subsidiary of NLS.  Kadimastem’s executive chairman & president, Ronen Twito, voiced their enthusiasm for the merger deal noting “[we] believe that the exposure of the combined company’s assets to the US capital markets through our new Nasdaq listing will enable us to develop our portfolio and increase Kadimastem shareholder value.”

Cell & Gene Therapy coverage on Pharmaceutical Technology is supported by Cytiva. Editorial content is independently produced and follows the highest standards of journalistic integrity. Topic sponsors are not involved in the creation of editorial content.