EDISON, NJ - Hepion Pharmaceuticals Inc. (NASDAQ:HEPA), a biopharmaceutical company, has announced its intention to merge with Pharma Two B Ltd., a late-stage biotechnology firm developing a novel treatment for Parkinson’s Disease. Hepion's board has unanimously recommended that shareholders vote in favor of the merger at the upcoming Special Meeting on December 12, 2024.
The merger is seen as a strategic move for Hepion, which has faced challenges in advancing its clinical trials due to financial constraints and a lack of interest from the investment community for additional financing. Recent financial data reveals concerning metrics, with an EBITDA of -$25.32 million and a weak overall financial health score according to InvestingPro's comprehensive analysis. Subscribers to InvestingPro gain access to 11 additional key insights about Hepion's financial position and future prospects. The proposed merger would allow Hepion's shareholders to benefit from the potential success of Pharma Two B's product candidate, P2B001.
While Pharma Two B has no current plans to further Hepion's drug pipeline, Hepion is exploring options to monetize these assets for shareholder benefit. The company has not yet received formal interest in these assets, and there is no guarantee of a sale or its potential value.
In the event that the proposed merger does not gain shareholder approval, Hepion warns of severe consequences, including a potential delisting from Nasdaq and bankruptcy, due to its limited financial resources. The company's current ratio of 1.3 indicates a tight liquidity position, while its rapid cash burn rate raises concerns about long-term sustainability without additional funding or strategic alternatives. The company emphasizes the urgency of the situation and the impact the vote could have on shareholder investments.
The proxy solicitation firm Campaign Management, LLC has been engaged to assist with the voting process. Hepion's management is urging shareholders to vote in favor of the merger to secure a stake in the promising prospects of Pharma Two B's Parkinson’s Disease treatment, which is closer to FDA New Drug Application filing than any of Hepion's current drug candidates.
This merger proposal comes after a thorough review of strategic alternatives aimed at maximizing shareholder value and ensuring the continued pursuit of treatments for critical diseases. Hepion's management is advocating for shareholder support to realize the potential of a combined entity with Pharma Two B. The information is based on a press release statement from Hepion Pharmaceuticals.
In other recent news, Hepion Pharmaceuticals is facing a potential delisting from Nasdaq due to non-compliance with listing requirements, specifically a reported stockholders' deficit and a stock price below the required threshold. The company has until early January 2025 to submit a plan to regain compliance. In addition to this, Hepion Pharmaceuticals and Pharma Two B Ltd. have jointly filed for a proposed merger, a significant development in their plans to operate under the Pharma Two B name. The merger, expected to close in the fourth quarter of 2024, will shift the focus to Pharma Two B's lead product candidate, P2B001, a treatment for Parkinson's Disease. Concurrent with the merger's closing, an $11.5 million private financing will adjust the ownership distribution, with Pharma Two B equity-holders owning approximately 85% of the combined entity, and Hepion shareholders, the remaining 15%. Significant changes have also occurred in Hepion Pharmaceuticals' executive leadership, with John Cavan stepping down from his roles as interim CEO and CFO, and John Brancaccio, the company's executive chairman, assuming these roles in the interim. These are the recent developments for both companies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.