Aethlon Medical has entered into a definitive agreement to merge with privately held biotechnology company North Immunology in an all-stock transaction, alongside an oversubscribed $180 million private placement intended to fund development of North’s lead atopic dermatitis program through multiple clinical readouts.
Following completion of the transaction, the combined company will operate as North Immunology and is expected to trade on the Nasdaq Capital Market under the ticker symbol NRTX.
North Immunology is developing bispecific antibodies that target multiple inflammatory pathways in immune and inflammatory diseases. Its lead program, NOR-101, is a half-life-extended bispecific antibody targeting IL-13 and IL-18 and is being developed initially for atopic dermatitis.
The company’s strategy is intended to address both type 2 and non-type 2 inflammatory pathways involved in atopic dermatitis rather than focusing exclusively on type 2 inflammation.
North believes that approach could potentially produce a broader therapeutic effect, although NOR-101 remains investigational and has not yet been evaluated in human clinical studies.
The concurrent private placement is expected to generate approximately $180 million in gross proceeds, including the conversion of roughly $34 million of North Immunology convertible promissory notes and associated amounts.
Participants include Bain Capital Life Sciences, Janus Henderson Investors, Deep Track Capital, Longitude Capital, Soleus Capital, Invus, Sirenia Capital Management, funds managed by Farallon Capital Management, Adage Capital Partners and TCGX.
North expects the financing to fund operations into the second half of 2028.
The company plans to begin a Phase 1a clinical study of NOR-101 during the first quarter of 2027, with interim pharmacokinetic and safety data expected by mid-2027.
North then plans to initiate Phase 1b and Phase 2b studies in atopic dermatitis during 2027, with topline results from both studies expected in 2028.
Preclinical work cited by North includes non-human primate pharmacokinetic data showing approximately a 42-day half-life and encouraging bioavailability, according to the company. Human studies will be required to determine whether those characteristics translate clinically.
Under the merger agreement, existing Aethlon shareholders are expected to own approximately 4.75% of the combined company at closing, while pre-merger North Immunology shareholders, including investors participating in the private placement, are expected to own approximately 95.25%.
The combined company is expected to have a pro forma equity value of approximately $346.5 million, including the private placement.
Aethlon shareholders immediately before closing are also expected to receive contingent value rights tied to potential proceeds from a sale, licensing transaction, transfer, divestiture or other monetization of Aethlon’s legacy Hemopurifier business.
Aethlon’s Hemopurifier is a clinical-stage therapeutic device being developed to remove cancer-promoting exosomes and life-threatening viruses from the circulatory system and for potential applications in organ transplantation.
The transaction has been approved by both companies’ boards and is expected to close in the first quarter of 2027, subject to shareholder approvals, effectiveness of an SEC registration statement, Nasdaq approval of the combined company’s listing application and other customary closing conditions.
North Immunology’s existing management team will lead the combined company. Its current board, chaired by co-founder Daniel Schneeberger, M.D., MBA, is expected to join the combined company’s board alongside new independent directors.
North Immunology was founded and incubated by ADAR1 Capital Management and is focused on developing bispecific antibodies for immune and inflammatory diseases.
For North, the merger provides both a Nasdaq listing and financing to move NOR-101 from preclinical development into human studies. For Aethlon, the structure gives existing shareholders an ownership interest in the combined biotechnology company while preserving potential additional value from its legacy assets through the CVRs.
Maxim Group is serving as financial advisor to Aethlon, with Procopio, Cory, Hargreaves & Savitch serving as legal counsel. Wedbush Securities is serving as North Immunology’s exclusive strategic financial advisor, while Gibson Dunn is providing legal counsel. Jefferies, Leerink Partners, BofA Securities and UBS Investment Bank are serving as placement agents for the private financing.
KEY QUOTES:
“Monoclonal antibodies targeting type 2 inflammation have transformed the treatment of AD, yet the vast majority of patients still live with substantial disease burden. By simultaneously targeting type 2 and non-type 2 inflammatory pathways that drive AD, we believe NOR-101 has the potential to deliver a best-in-disease therapeutic profile.”
Mohit Gupta, Co-Founder and Chief Scientific Officer of North Immunology
“This merger and significant financing is expected to provide the capital and public-company platform needed to advance NOR-101 into clinical development. We are encouraged by NOR-101’s preclinical profile, including the promising bioavailability and approximately 42-day half-life observed in our non-human primate PK study. We look forward to executing on our clinical development plan, with multiple data readouts expected through 2028.”
Jonathan Barr, CEO of North Immunology
“We believe Aethlon stockholders will have a compelling opportunity to participate in the development of North Immunology’s pipeline through their ownership interest in the combined company, while also retaining the potential to realize value from Aethlon’s legacy assets through the contingent value rights.”
James Frakes, Chief Executive Officer of Aethlon Medical
“I am proud of the rapid progress our team has made in advancing NOR-101 since we founded the Company. We look forward to dosing our first clinical trial participant and building on this momentum as North enters its next stage of growth.”
Daniel Schneeberger, M.D., MBA, Co-Founder and Board Member of North Immunology and Managing Partner of ADAR1 Capital Management
