Summary: NLS Pharmaceutics and Kadimastem are progressing with their merger, having filed a registration statement with the US Securities and Exchange Commission (SEC). This merger aims to create a Nasdaq-traded biotechnology company. Kadimastem will become a wholly owned subsidiary of NLS, and after the transaction, Kadimastem shareholders will hold 85% of the newly merged company. The merger is expected to enhance market position and shareholder value, while also enabling continued development of NLS’ dual orexin receptor agonist platform.
Key Takeaways:
- Merger to Create Nasdaq-Traded Biotechnology Company: The merger between NLS Pharmaceutics and Kadimastem aims to form a publicly traded company with a strong focus on cell therapy and clinical-stage product candidates.
- Kadimastem Will Become a Subsidiary of NLS: Following the transaction, Kadimastem will be a wholly owned subsidiary of NLS, with Kadimastem shareholders controlling 85% of the combined company.
- Strategic Focus on Growth and Innovation: The merger will strengthen both companies’ market positions and provide expanded growth opportunities, particularly in advancing NLS’ dual orexin agonist platform.
NLS Pharmaceutics Ltd, a Swiss clinical-stage biopharmaceutical company developing a dual orexin receptor agonist platform for the treatment of narcolepsy and neurodegenerative disorders, and Kadimastem Ltd, a clinical-stage cell therapy company developing and manufacturing “off-the-shelf” allogeneic cell products, announced that NLS has filed a registration statement on Form F-4 with the US Securities and Exchange Commission (SEC) regarding the previously announced merger between NLS and Kadimastem.
The registration statement contains a prospectus in connection with the proposed merger transaction pursuant to the definitive agreement entered between the companies, as well as a proxy statement for the meeting of NLS shareholders related to certain approvals required in connection with the merger.
As part of the share exchange process related to the merger, NLS is providing information about NLS’ securities offering to Kadimastem shareholders.
This announcement follows the report on Form 6-K dated Nov 5, 2024, which detailed the signing of a binding merger agreement alongside the terms governing the completion of the merger transaction. The closing of the merger is subject to approval by the shareholders of each of NLS and Kadimastem, the declaration of the registration statement as effective by the SEC and other customary requirements and closing conditions.
As previously announced, Kadimastem intends to become a publicly traded company on Nasdaq through the merger.
“We are making significant strides toward achieving our strategic objectives at Kadimastem. The submission of NLS’s Registration Statement related to the merger with the SEC marks a crucial milestone in our journey to conclude the merger,” says Ronen Twito, chairman of the board and chief executive officer of Kadimastem, in a release. “We believe the pending merger will empower us to further unlock the potential of our innovative technologies. Our commitment remains steadfast in delivering value to our shareholders while making a meaningful impact in the field of cell therapy.”
Alex Zwyer, chief executive officer of NLS, adds in a release, “We are excited about the momentum building around the merger. We believe that this strategic partnership is set to strengthen our market position and enhance shareholder value through expanded growth opportunities. We are focused on executing the merger effectively, as we move forward together in the biotechnology sector.”
Proposed Transaction
The proposed transaction will be affected through a reverse triangular structure in which Kadimastem will become a wholly owned subsidiary of NLS. In consideration, NLS will issue common shares to the Kadimastem shareholders who, after completing the transaction, will hold approximately 85% of the issued and outstanding shares of NLS, and the existing shareholders of NLS will hold the remaining 15% of NLS following completion of the merger.
Following the transaction, the parties expect to continue developing NLS’ first-in-class dual orexin agonist platform within the merged company. The remaining NLS assets are expected to be divested subject to a contingent value rights agreement, the proceeds of which will be distributed entirely to the current shareholders of NLS.
The merger has been approved by the boards of directors of both companies. Each of Kadimastem and NLS has received commitments of support with respect to voting for the matters related to the merger from shareholders representing more than 40% of its outstanding shares.
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