Having had to give up on its liver disease ambitions due to a lack of funds, Hepion Pharmaceuticals has decided that its best option is to merge into Israeli biotech Pharma Two B.
Despite trying to slash its operating costs in half at the end of last year, Hepion announced in April that it was halting work on a phase 2 trial for its lead cyclophilins inhibitor in metabolic dysfunction-associated steatohepatitis (MASH), which it attributed to “resource constraints.”
Throughout this period, the Nasdaq-listed biotech was exploring “strategic options” and has now made a decision—it will give up on its liver disease ambitions and merge into the privately owned Pharma Two B.
The merged entity will carry the Pharma Two B name and list its shares on Nasdaq under the ticker symbol “PHTB.” The company will be focused on Pharma Two B’s late-stage asset, a pramipexole-rasagiline fixed-dose combination for Parkinson’s called P2B001.
“As we advance P2B001’s development following the successful completion of our phase 3 clinical trial, we believe it is the right time to enter the public equity markets,” Pharma Two B CEO Dan Teleman said in the release.
“Our company is in a stage that we believe meets the public market and investors’ expectations,” Teleman added. “We are excited about Pharma Two B’s next growth phase, moving P2B001 towards an NDA submission targeted for the first half of 2026 and making this potential treatment available to patients.”
John Brancaccio, executive chairman of Hepion’s board, explained in the release that the merger was the culmination of a “review of multiple strategic alternatives to identify paths to provide value to our stockholders.”
“We believe the transaction we are announcing today with Pharma Two B presents an excellent opportunity for our shareholders to become a part of a company poised to file an NDA in a therapeutic area with a major unmet medical need,” Brancaccio added.
The merger is likely to have a pro-forma equity value of around $58.5 million. The merged company will be led by Pharma Two B’s management, and the release made no mention of whether the Rehovot, Israel-based biotech will retain Hepion’s workforce.
Alongside the merger—which is expected to close in the fourth quarter of 2024—Pharma Two B has agreed to sell $11.5 million of its ordinary shares and accompanying series A and B wants to a syndicate of new and existing investors. This money will go towards the development of P2B001 as well as repaying up to $2.9 million of Hepion’s outstanding senior unsecured notes.
Once this financing is taken into account, Pharma Two B shareholders will own around 44.5% of the combined company, Hepion’s shareholders will own 7.8% and the remaining 47.7% will be owned by the participating investors.
P2B001 combines low doses of the dopamine agonist pramipexole and the monoamine oxidase-B inhibitor rasagiline in an attempt to trigger better safety and efficacy outcomes than either of the approved drugs can achieve as a monotherapy. Pharma Two B’s approach is underpinned by a belief that the drugs have complementary mechanisms of action.