Edison-based Hepion Pharmaceuticals Inc., a clinical-stage biopharmaceutical company that develops treatments for chronic liver diseases, recently announced it entered into a definitive merger agreement with Pharma Two B Ltd. 

Pharma Two B is an Israeli-based late-clinical stage private company that is developing a candidate for the treatment of Parkinson’s disease, P2B001.

The merger has an estimated pro-forma implied equity value of $58.5 million, Hepion announced July 22. 

If the deal closes, Hepion would become a wholly-owned subsidiary of Pharma Two B, which the combined company would operate as. The company would also apply for listing on the Nasdaq Stock Market under the ticker symbol “PHTB.” 

In December 2023, Hepion initiated a restructuring plan aimed at preserving capital, starting with cutting operating costs by about 60%. At that time, the company also said it was exploring options such as a merger or acquisition. 

Now’s the time 

In a statement, Pharma Two B CEO Dan Teleman said the company believes “it is the right time to enter the public equity markets.” 

“Our company is in a stage that we believe meets the public market and investors’ expectations. We are excited about Pharma Two B’s next growth phase, moving P2B001 towards [a New Drug Application to the U.S. Food and Drug Administration] targeted for the first half of 2026 and making this potential treatment available to patients,” Teleman added. 

Teleman explained that P2B001, which completed its Phase 3 clinical trial, is an “easy-to-use” treatment that has “a lower incidence of excessive daytime sleepiness—a common side effect of currently available dopamine agonist treatments in Parkinson’s disease patients.” 

Hepion Executive Chairman John Brancaccio said the merger “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.”

According to a Fierce Bio tech report, Hepion will “give up on its liver disease ambitions” to merge with Pharma Two B.

Hepion winds down study

Hepion’s primary drug candidate, Rencofilstat, has been shown to reduce liver fibrosis and hepatocellular carcinoma tumor burden in studies.   

In April 2024, Hepion announced it was winding down a Phase 2b study evaluating the safety and efficacy of Rencofilstat after pausing enrollment in April 2023, with 151 subjects randomized. To date, about 80 subjects completed their Day 365 visits and can be evaluated for safety and efficacy. An additional 40 subjects will provide more data, the companies said. 

Deal details 

The merger expects to close in the fourth quarter of 2024, subject to approval by Hepion’s stockholders, regulatory approval and other customary closing conditions. 

Pharma Two B also entered into a securities purchase agreement for an $11.5 million private placement of ordinary shares and accompanying Series A and Series B warrants with life science investors. The agreement is expected to close immediately after the merger is finalized. 

The Pharma Two B management team will lead the combined company. In December, Hepion CEO and Director Robert Foster resigned from his positions for personal reasons and Chief Financial Officer John Cavan was appointed interim CEO.  

A.G.P./Alliance Global Partners is serving as financial advisor to Hepion. Sheppard, Mullin, Richter & Hampton LLP is acting as U.S. legal advisor to Hepion, and Lipa Meir & Co.is acting as Israeli legal advisor to Hepion. Sullivan & Worcester LLP is serving as legal advisor to A.G.P.  

Laidlaw & Co. (UK) Ltd. is acting as financial advisor to Pharma Two B, and Meitar Law Offices and Goodwin Procter LLP are acting as its legal advisors.