With just weeks to go before the FDA decides whether to approve the first treatment for a rare genetic condition, Rafael Holdings is merging with Cyclo Therapeutics to try to push their own candidate over the line.
Cyclo’s lead asset is Trappsol Cyclo, a formulation of hydroxypropyl beta cyclodextrin that is being evaluated in a phase 3 trial in Niemann-Pick disease type C1 (NPC). The rare, genetic lysosomal storage disease prevents the body from moving and using cholesterol and other lipids in cells. This leads to a buildup of cholesterol and other lipids in the liver, spleen or lungs.
After the deal closes, which is expected in late 2024, Rafael said it will continue to fund the phase 3 trial of Trappsol Cyclo through to its 48-week interim analysis. Enrollment in the study was completed in May, and Cyclo has previously said the top-line readout is likely in the first half of 2025.
The expectation among Cyclo’s leadership is that this phase 3 data will be the evidence needed to get Trappsol Cyclo approved as “a much-needed treatment option for the treatment of NPC1,” they said in a second-quarter update last week.
Rafael’s interest in Cyclo dates back to March 2023, when the holding company made its first investment in the biotech. Since then, Rafael scooped up $5 million worth of Cyclo’s stock in June 2023 and contributed to a $2.4 million raise via a private offering of Cyclo’s stock in October of that year.
Now, the companies have announced a merger where Rafael will provide Cylo’s shareholders with shares of its class B common stock based on valuing the biotech's shares at 95 cents apiece. Cyclo's shares closed at $1.26 yesterday and were trading down about 17% before the market open Thursday in the wake of the news
“The proposed merger with Cyclo Therapeutics is a major step forward in our strategy to invest in, develop and commercialize clinical stage assets in areas of high unmet medical need,” Rafael’s CEO Bill Conkling said in the Aug. 22 release.
In this morning’s release, Cyclo’s CEO N. Scott Fine said the biotech’s partnership with Rafael over the last year and a half has “enabled Cyclo to get to where we are today.”
“We are extremely pleased to announce our merger agreement with Rafael Holdings and believe that the strength of Rafael’s balance sheet and its strong management team will solidify our commitment to deliver the results of the TransportNPC trial for our shareholders and patients.”
Beyond Cyclo, Rafael’s interests include a majority investment in cancer-metabolism-focused Cornerstone Pharmaceuticals and a majority equity interest in LipoMedix Pharmaceuticals, which is working on liposome-delivered oncology therapies.
There are currently no FDA-approved therapies for NPC, although Johnson & Johnson’s Zavesca is approved in Europe, Japan and certain other countries. But the race has heated up this month after an FDA advisory committee gave its backing to Zevra Therapeutics’ arimoclomol ahead of a regulatory decision next month.
Arimoclomol was originally submitted to the FDA in July 2020 but was rejected almost a year later because the agency questioned aspects of the single clinical trial used to support the application. Zevra returned to the FDA in December 2023 with a rescored scale and more results from the study, including data from an open-label expansion phase.