Rafael Holdings and Cyclo Therapeutics Join Forces to Advance Treatment Development
Cyclo Therapeutics is currently conducting its TransportNPC™ Phase 3 clinical trial for Trappsol Cyclo™, which aims to treat Niemann-Pick Disease Type C1, a rare and serious genetic condition. The trial has reached full enrollment, and interim analysis results are expected in the coming years.
Rafael Holdings, Inc. (NYSE: RFL) and Cyclo Therapeutics, Inc. (Nasdaq: CYTH) have finalized a merger agreement designed to accelerate the development of Trappsol Cyclo™ for Niemann-Pick Disease Type C1. Once the merger is successfully completed, Rafael Holdings will distribute shares of its Class B common stock to Cyclo Therapeutics shareholders, based on a predetermined exchange ratio that values Cyclo Therapeutics shares at $0.95 each. This merger considers the cash reserves of Rafael, along with its marketable securities and certain investments, after accounting for specific liabilities. Additionally, funds designated for Cyclo’s operations will be managed through Rafael’s convertible notes until the merger is finalized. After the merger concludes, Rafael Holdings plans to continue financing the TransportNPC™ clinical trial, leading up to its 48-week interim analysis.
The boards of directors from both companies have approved the merger and expect to close it later this year, pending shareholder approval, the effectiveness of a registration statement for Rafael's Class B common stock, and other standard closing conditions.
Rafael Holdings made its initial strategic investment in Cyclo Therapeutics in early 2023 to support innovative treatments for Niemann-Pick Disease Type C1. Further financial support was provided during a funding round in the fall of 2023, leading to ongoing assistance for Cyclo Therapeutics through convertible debt financing this year.
Bill Conkling, President and CEO of Rafael Holdings, remarked, "The proposed merger with Cyclo Therapeutics represents a crucial step in our strategy to invest in and develop clinical-stage assets that address significant unmet medical needs. Cyclo Therapeutics has made impressive strides with their Trappsol Cyclo™ program, successfully enrolling participants in a pivotal Phase 3 clinical study." He further highlighted their commitment to prioritizing Trappsol Cyclo™ as their primary clinical program, emphasizing its potential to enhance treatment options for patients affected by NPC.
N. Scott Fine, CEO of Cyclo Therapeutics, expressed appreciation for the partnership with Rafael Holdings, noting its critical role in achieving this milestone. He emphasized confidence in Rafael’s strong financial position and expertise, reaffirming their dedication to delivering successful results from the TransportNPC™ trial for both shareholders and patients.
Cassel Salpeter & Co. is acting as the financial advisor to Cyclo Therapeutics for this transaction. Legal counsel is being provided by Schwell Wimpfheimer & Associates for Rafael Holdings and by Fox Rothschild LLP for Cyclo Therapeutics.
About Rafael Holdings, Inc.
Rafael Holdings is a holding company that invests in various clinical and early-stage pharmaceutical companies, including its merger with Cyclo Therapeutics, which focuses on developing innovative treatments for serious diseases through their lead asset, Trappsol Cyclo™. Rafael's investment portfolio includes significant stakes in Cornerstone Pharmaceuticals, LipoMedix Pharmaceuticals Ltd., the Barer Institute Inc., Day Three Labs, and Rafael Medical Devices, LLC. Their strategic approach is centered on enhancing their investments through opportunities that address critical medical needs, with the merger sharpening their focus on Trappsol Cyclo™ as the primary clinical project.
About Cyclo Therapeutics, Inc.
Cyclo Therapeutics is dedicated to developing transformative therapies through scientific innovation for patients suffering from severe conditions. Their lead product, Trappsol Cyclo™, has received orphan drug designation and is being investigated in multiple clinical trials targeting Niemann-Pick Disease Type C. Additionally, they are conducting a Phase 2b trial utilizing Trappsol Cyclo™ as a treatment for early Alzheimer's Disease, building on positive outcomes from an expanded access program. The company is also pursuing development for other indications, reflecting its commitment to advancing therapeutic options.
Frequently Asked Questions
What is the main focus of the merger between Rafael Holdings and Cyclo Therapeutics?
The merger primarily aims to enhance the development of Trappsol Cyclo™ for the treatment of Niemann-Pick Disease Type C1.
What are the terms of the share exchange in the merger?
Rafael Holdings plans to exchange shares of its Class B common stock to Cyclo Therapeutics’ shareholders valued at $0.95 per share for Cyclo Therapeutics.
When is the expected closing date for the merger?
The merger is anticipated to close in late 2024, depending on shareholder approvals and other customary conditions.
Who are the financial and legal advisors for the transaction?
Cassel Salpeter & Co. is the financial advisor to Cyclo Therapeutics, with legal services provided by Schwell Wimpfheimer & Associates and Fox Rothschild LLP.
What is the relationship between Rafael Holdings and Cyclo Therapeutics before the merger?
Rafael Holdings has been financially backing Cyclo Therapeutics through strategic investments and convertible debt financing since early 2023.
