Rafael Holdings, Inc. and Cyclo Therapeutics, Inc. announced that they have entered into a definitive merger agreement to combine the two companies to focus on the development of Trappsol® Cyclo™ for the treatment of Niemann-Pick Disease Type C1. The companies are building on a year-long history of strategic collaboration and investment.
The merger involves Rafael Holdings issuing Class B common stock to Cyclo Therapeutics shareholders, valuing Cyclo shares at $0.95 each. In addition, the cash value will take into account the funding of Cyclo’s operations by Rafael with convertible notes through closing.
Cyclo Therapeutics is a clinical-stage biotechnology company that focuses on the use of cyclodextrins in drug development. The company’s lead therapeutic asset, Trappsol® Cyclo™, an orphan drug designated product in the United States and Europe, is the subject of four formal clinical trials for Niemann-Pick Disease Type C, a rare and fatal genetic disease. The company is also conducting a Phase 2b clinical trial using Trappsol® Cyclo™ intravenously in early Alzheimer’s disease. According to its full year (FY) 2023 earnings report, Cyclo’s revenue during FY 2023 was approximately $1.1 million, and EBITDA was a loss of $20 million.
Rafael Holdings primarily engages in holding interests in clinical and early-stage pharmaceutical companies, and commercial real estate assets in the United States and Israel. It operates in two segments, healthcare and real estate. The company engages in the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells. Its lead drug candidate is CPI-613 (devimistat), currently under Phase III clinical study for the treatment of metastatic pancreatic cancer and acute myeloid leukemia.
According to sources on August 22, Rafael Holdings made its first strategic investment in Cyclo Therapeutics in March 2023 to help drive treatment innovation for patients with the debilitating diagnosis of Niemann-Pick Disease Type C1. Rafael Holdings led another financing round in the fall of 2023 and has continued to support Cyclo Therapeutics via convertible debt financings in 2024.
Following the closing, Rafael Holdings intends to fund the TransportNPC™ clinical trial to its 48-week interim analysis. The boards of directors of Rafael Holdings and Cyclo Therapeutics have approved this transaction and expect it to close in late 2024.
Cassel Salpeter & Co. is acting as financial advisor to Cyclo Therapeutics in connection with the transaction. Schwell Wimpfheimer & Associates is serving as legal advisor to Rafael Holdings and Fox Rothschild LLP is serving as legal advisor to Cyclo Therapeutics. The exact purchase price for the deal was not disclosed.
According to data captured in the LevinPro HC database, this acquisition represents the 97th Biotechnology transaction of the year. There were 161 Biotechnology deals announced during 2023, and 144 announced during 2022.
