Rafael Holdings has signed a definitive merger agreement with Cyclo Therapeutics, aiming to enhance the development of Trappsol Cyclo, a treatment for Niemann-Pick disease type C1.

The merger will result in Rafael issuing shares of its Class B common stock to Cyclo’s shareholders, with an exchange ratio that values the latter at $0.95 per share.

The valuation of Rafael will be based on its cash value, marketable securities and certain other investments, minus some current liabilities.

This calculation will also include the funding provided to Cyclo's operations through convertible notes until the merger's completion.

Post-merger, Rafael is committed to financing the TransportNPC clinical trial until the 48-week interim analysis.

Both companies’ boards of directors have given their approval for the deal.

The merger is anticipated to conclude later this year.

Rafael began its strategic investment in Cyclo in March 2023, leading another financing round in the fall of the same year.

The company has continued to support Cyclo into 2024 through convertible debt financings.

Rafael Holdings president and CEO Bill Conkling stated: “The proposed merger with Cyclo Therapeutics is a major step forward in our strategy to invest in, develop and commercialise clinical stage assets in areas of high unmet medical need.

“Cyclo Therapeutics continues to make substantial progress in advancing its lead asset, Trappsol Cyclo, announcing the completion of enrolment in its pivotal TransportNPC Phase III clinical study for the treatment of Niemann-Pick disease type C1 at the end of May 2024.

“We are impressed with the execution by the Cyclo Therapeutics team in fully enrolling a comprehensive clinical trial in NPC and we eagerly await the 48-week interim analysis in the middle of 2025.”