Full Press Release Details
NLS Pharmaceutics CEO Issues Letter to Shareholders
Z rich, Switzerland, December 11, 2024 - NLS
Pharmaceutics Ltd. (Nasdaq: NLSP, NLSPW) ("NLS" or the "Company"), a Swiss clinical-stage biopharmaceutical company
focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders,
today announced that its Chief Executive Officer, Alex Zwyer, has issued the following letter to shareholders:
Dear Valued Shareholders,
As we move forward with exciting developments at NLS, I want to update
you on the significant progress we've made, key challenges we've overcome, and the strategic opportunities that lie ahead-especially
as we approach the expected closing of our transformative merger with Kadimastem Ltd. ("Kadimastem"), an advanced clinical-stage
Over the past several months, we've
made substantial progress with our Dual Orexin Receptor Agonist (DOXA) platform, which we believe holds considerable promise in
addressing key challenges in the treatment of sleep and neurodegenerative diseases. Recently, we announced details around our
preclinical program to evaluate two candidates, AEX-41 and AEX-2, two first-in-class non-sulfonamide DOXAs designed to target both
orexin-1 (OX1R) and orexin-2 (OX2R) receptors while concurrently inhibiting cathepsins. This
unique approach aims to address the unmet therapeutic needs in narcolepsy and related neurological disorders.
The preclinical study is being conducted at the
Centre for Neurological Research of Lyon (France), a world-class institution specializing in sleep and neurological research, and aims
to evaluate the potential superiority of AEX compounds over existing therapies in the space by using an internationally validated orexin
knockout (ORX-KO) mouse model of narcolepsy. While existing selective OX2R agonists have demonstrated efficacy in managing narcolepsy
symptoms, DOXA are expected to surpass these benchmarks. By engaging both OX1R and OX2R receptors and addressing broader neurological
pathways, AEX-41 and AEX-2 offer the potential for enhanced therapeutic outcomes, including greater wakefulness stability and improved
sleep quality under real-world conditions.
Earlier in December, we shared preliminary results
from this ongoing study of AEX-41 in narcolepsy models which suggested that the compound shows promise as a therapeutic agent for managing
narcolepsy-related sleep-wake disturbances.
Key findings from the study included:
Final top line results from the ongoing study
are expected to be shared by the end of this year. In addition, the Company's broader development plans include exploring the
application of its DOXA platform also in other neurodegenerative conditions, such as Amyotrophic Lateral Sclerosis (ALS).
Overcoming Obstacles
Despite significant challenges over the past few
months, we have successfully positioned NLS for the next phase of growth:
- Financial growth and Nasdaq Compliance:
After a period of risk regarding our Nasdaq listing, we are pleased to have regained full compliance with all Nasdaq continued listing
requirements. This achievement was a result of our successful efforts to improve our balance sheet, including settlement agreements with
vendors and successfully fundraising from private as well as institutional investors. Full compliance allows us, and eventually the combined
company, continued access and exposure to the U.S. capital markets.
- Financial Restructuring: In addition, we have made important
strides in eliminating all debt and strengthening our balance sheet. In October 2024, we closed a $3.2 million private placement and in
December we announced a second private placement raising up to $1 million at a price of $3.10, representing a 15% premium to the market,
subject to certain closing conditions including shareholder approval. The two private placements together (if closed), with our existing
cash position, extends our runway to approximately 18 months. This new influx of capital also gives us flexibility to execute our strategy
including the development of the DOXA compounds and complete the merger process smoothly.
Merger with Kadimastem Ltd.
In addition to solving our listing and financial
challenges, we also announced a potential merger with Kadimastem, a company we believe offers compelling strategic benefits, not only
for the combined company but also for our shareholders. Kadimastem's expertise in the development of innovative cell-based therapies
will allow the DOXA program to thrive, and once the merger is finalized, these programs will become part of the merged company's
broader pipeline of neurodegenerative and diabetes candidates.
While Kadimastem will assume ownership of the
active pipeline assets, including the DOXA program, NLS shareholders will retain an exclusive opportunity to benefit financially from
the potential sale of our legacy assets, including Mazindol, through the contingent value rights (CVR) agreement associated with the merger.
Mazindol, which has long been part of our portfolio,
is a key asset that received significant attention from private companies and therefore we believe holds significant potential for future
value generation post-merger. We remain committed to maximizing this opportunity.
Looking Ahead: A Focused Strategy on Value Creation
The recent months have been a time of great challenge
and achievement for NLS. As the merger is expected to close by the end of January 2025 and the integration process begins, we remain grateful
for your continued support. We are committed to maximizing shareholder value through the potential sale of our legacy assets in the CVR
and the combined company's strengthened neurodegenerative and diabetes focused advanced clinical pipeline. With this strategy in
place, we look forward to a future that is focused on value creation and the success of the DOXA program under Kadimastem's leadership.
Thank you for your ongoing support as we move
forward with this exciting next chapter.
About NLS Pharmaceutics Ltd.
NLS Pharmaceutics Ltd. is a global development-stage
biopharmaceutical company, working with a network of world-class partners and internationally recognized scientists. NLS is focused on
the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders. Headquartered
in Switzerland and founded in 2015, NLS is led by an experienced management team with a track record of developing and commercializing
product candidates. For more information, please visit www.nlspharma.com.
Safe Harbor Statement
This press release contains expressed or implied forward-looking statements
pursuant to U.S. Federal securities laws. For example, NLS and Kadimastem are using forward-looking statements when they discuss the DOXA
platform, the potential safety and efficacy of AEX-41 and AEX-2, plans to expand its research and timing thereof, NLS' pipeline,
the expected timing of the closing, and benefits of, the merger agreement, the expected closing of the transaction and the potential benefits
of the transaction to NLS and Kadimastem and their respective shareholders, the expected timing of the release of topline results from
NLS' study, the potential closing of the private placement and NLS' expected cash runway. These forward-looking statements
and their implications are based on the current expectations of the management of NLS and Kadimastem, and are subject to a number of factors
and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following
factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: risks related
to the companies' ability to complete the merger on the proposed terms and schedule, including risks and uncertainties related to
the satisfaction of the closing conditions related to the merger agreement and risks and uncertainties related to the failure to timely,
or at all, obtain shareholder approvals for the transaction; unexpected costs, charges or expenses resulting from the transaction and
potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger;
changes in technology and market requirements; either or both companies may encounter delays or obstacles in launching and/or successfully
completing their clinical trials; the companies' products may not be approved by regulatory agencies; their technologies may not
be validated as they progress and their methods may not be accepted by the scientific community; either of both of the companies may be
unable to retain or attract key employees whose knowledge is essential to the development of their products; unforeseen scientific difficulties
may develop with the products being advanced by the companies; their products may wind up being more expensive than anticipated; results
in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate
with the results of human clinical trials; the companies' patents may not be sufficient; their products may harm recipients; changes
in legislation may adversely impact either or both of the companies; inability to timely develop and introduce new technologies, products
and applications; and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or
performance of candidate products to differ materially from those contemplated in such forward-looking statements. Except as otherwise
required by law, neither Kadimastem nor NLS undertakes any obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information
about the risks and uncertainties affecting NLS is contained under the heading "Risk Factors" in NLS' annual report
on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC"), which is available
on the SEC's website, www.sec.gov, and in subsequent filings made by NLS with the SEC.
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This communication is not intended to and shall