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EpiCept Stockholders Overwhelmingly Approve Merger with Israeli Immune Pharmaceuticals

Merger Expected to close in August 2013

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/ By Gali Weinreb /

Immune Pharmaceuticals Ltd., a developer of treatments for inflammatory diseases has carried out a reverse merger with US pain and cancer treatment developer EpiCept Corporation (Bulletin Board; OMX: EPCT) and listed on Wall Street. The merged company will be called Immune Pharmaceuticals Inc., and will be listed on Nasdaq and in Stockholm, after EpiCept shareholders approved the merger and a 1:40 reserves stock split last week.

EpiCept’s share price fell 5.2% on Friday to $0.09, giving a market cap of $10.1 million.

Immune Pharmaceuticals’ shareholders will receive 81% of the merged company, and EpiCept shareholders will receive 19%. Immune Pharmaceuticals has also raised $4, 125, 000, so its current and new shareholders will receive 84% of the merged company. EpiCept is also carrying out a private placement, for an unknown amount.

Immune Pharmaceuticals chairman and CEO Daniel Tepper, who will manage the merged company, declined to tell “Globes” the size of the planned placement, but said that it would be much larger than the $4.13 million raised, and that the proceeds would be enough for two years. The private placement will be carried out in stages during September.




Immune Pharmaceuticals’ lead product is an antibody for the treatment of inflammatory diseases, bertilimumab, which it licensed from Canada’s iCo Therapeutics Inc. (TSX: ICO) in June 2011 for the treatment of inflammatory diseases and cancer. It bought the rights for oral and direct delivery into the bloodstream versions of the drug, which is similar to blockbuster drugs Humira (made by AbbVie Inc. (Nasdaq: ABBV) for the treatment of rheumatoid arthritis, chronic plaque psoriasis, and Crohn’s disease) and Remicade (made by Janssen Biotech Inc. for treatment of Crohn’s Disease and rheumatoid arthritis).
The company has also leased from Yissum Technology Transfer Company of the Hebrew University of Jerusalem injectable applications of NanomAb antibody nanoparticle conjugate technology developed by Prof. Shimon Benita.

Immune Pharmaceuticals plans to begin a Phase II clinical trial of bertilimumab for the treatment of moderate-to-severe ulcerative colitis, and later this year to expand the study to the treatment of bullous pemphigoid, a rare auto-immune condition that affects the skin and causes the formation of blisters. The study will also examine bertilimumab’s suitability for patients on the basis of their genetic profile. If the drug reaches market with this test, it could become the first personalized anti-inflammatory drug. Currently, such studies are only conducted on cancer drug candidates.

The study will begin in Israel and Europe, and Immune Pharmaceuticals is in talks with the US Food and Drug Administration (FDA) to expand the study to the US. The Israeli centers of the study are due to open in 2014, and the results on 90 patients (including 30 patients in the control group) are due by the end of the year. There will be no interim results report.

If the study results are positive, which Tepper defines as a difference of at least 20% in the immune response in the treatment group, a combined Phase II/III clinical trial may be held. “Big pharma and biotech companies are showing great interest in the product, and are waiting for the results, ” he says.
Tepper says that Immune Pharmaceuticals has raised $8.5 million to date from private investors, mostly Israelis or people with an Israeli connection and prior experience in investment in the life sciences.

“Globes”: What caused you to merge with a US company instead of holding an IPO in Israel or the US, or merging with an Israeli company?
Tepper: “The Israeli capital market does not sufficiently value life sciences companies, unless they are also listed in the US. A Wall Street offering could have been an option, but when we planned the merger, the IPO option was closed, and we’re now deep in the present process. Since we merged with an active company, not a stock market shell, immediately upon the closing of the merger, we can apply to the primary market and we believe that the listing will be accepted. Then we can also examine the option of a public offering.”
Does EpiCept have interesting products?

“It has a cream for the treatment of neuropathic pain which is undergoing a Phase III clinical trial. It’s a nice product, but Immune Pharmaceuticals’ anti-inflammatory antibody is much more interesting, and we want to commercialize the pain product to finance Immune’s activities.”
Immune Pharmaceuticals hopes to use proceeds from the US offering to expand its R&D laboratory in Jerusalem. “We hope to operate out of the Hadassah campus to create synergy with Hebrew University, ” says Tepper.
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