E Immune Pharma To Unlock Value And Create Two Separate Pure Play Companies; Cytovia, Immune

Biotechnology company Immune Pharmaceuticals (IMNP ) focuses on acquiring, developing, and commercializing innovative treatments in inflammatory disease and oncology therapeutics. In April 2017, the company announced a restructuring, forming its oncology subsidiary, Cytovia, Inc. With this restructuring, both Immune and Cytovia, unlike the previously diversified Immune, will be pure player brands with better “operational focus, ability to attract investors and create shareholder value,” Immune reports. Cytovia will focus exclusively on the development and commercialization of novel immuno-oncology therapeutics and Immune will focus on clinical proof of concept development for its immuno-inflammatory and dermatology portfolio. The company reports that this new strategy will allow for specialization of both companies’ business profile, and better position them to maximize their resources and further enrich their pipelines.

The restructuring was prompted by “the disconnect between the intrinsic value of each of the key assets of the company and the stock price/market valuation.” Prior to the restructuring, Cytovia had limited resources available to pursue development in oncology under the diversified company. The move also comes amidst Immune’s recent struggles to maintain Nasdaq compliance, which the company announced in June 2017 had been resolved.

Immune’s lead asset, Bertilimumab, is a novel personalized therapy currently undergoing clinical trials for ulcerative colitis and bullous pemphigoid, diseases that lack treatment options. Immune is also in the preclinical stage for Nanocyclo, a topical treatment for psoriasis and atopic dermatitis. Immune expects Phase IIa clinical trials for Nanocyclo later in 2017.

Presently, Cytovia remains a subsidiary of Immune. Shareholders are eager for confirmation from Immune of a potential spinoff transaction. Upon such a transaction, Cytovia would be financed independently and IMNP shareholders would receive proportional shares into the spinoff company. This strategy would allow shareholders to benefit from the growing intellectual portfolios and pipelines of the two separate companies that hope to thrive in their respective domains. Immune, under that scenario, could be recapitalized and thus be able to accelerate development of its key drugs.

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Disclosure: The author of this article owns shares mentioned in this article. 

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Craig Newman 2 months ago Member's comment

Only time will tell if this is good for $IMNP.

Ayelet Wolf 2 months ago Member's comment

Sounds like a wise move.

Adarsh Patel 2 months ago Contributor's comment

This article was extremely descriptive in defining the possible paths of Cytovia. In your personal opinion, do you think its smarter for Cytovia to follow the path of Celator or Tesaro?