Aethlon Medical Merges With North Immunology to Advance NOR-101 for Atopic Dermatitis

Key Points

• Aethlon Medical will merge with privately held North Immunology in an all-stock transaction.
• The combined company will operate as North Immunology, Inc. and is expected to trade on Nasdaq under the new ticker symbol (NASDAQ: $NRTX).
• The transaction includes an oversubscribed private placement expected to provide approximately $180 million in gross proceeds.
• The financing is expected to fund operations into the second half of 2028.
• North Immunology’s lead program, NOR-101, is an experimental long-acting bispecific antibody being developed for atopic dermatitis and other immune-mediated diseases.
• A Phase 1a study of NOR-101 is expected to begin in the first quarter of 2027, with early safety and pharmacokinetic data anticipated by mid-2027.

Aethlon Medical (NASDAQ: AEMD) has entered into a definitive agreement to merge with North Immunology, a privately held biotechnology company developing new treatments for inflammatory and immune-related diseases.

The all-stock merger and concurrent financing are intended to provide the combined company with the funding and public-company platform needed to advance NOR-101, North Immunology’s lead drug candidate for atopic dermatitis.

NOR-101 Targets Two Inflammatory Pathways in Atopic Dermatitis

NOR-101 is a half-life extended bispecific antibody designed to target both interleukin-13, or IL-13, and interleukin-18, or IL-18.

North Immunology said the drug candidate is designed to inhibit both type 2 and non-type 2 inflammation. The company believes targeting these two pathways could potentially provide a stronger treatment approach for people with atopic dermatitis, a chronic inflammatory skin condition.

The company reported that non-human primate pharmacokinetic testing showed NOR-101 had promising bioavailability and an approximate 42-day half-life. NOR-101 remains in preclinical development and has not been approved for any use.

$180 Million Private Placement Funds Development Through 2028

The proposed merger includes an oversubscribed private placement expected to provide approximately $180 million in gross proceeds.

The financing includes converting approximately $34 million in outstanding North Immunology convertible promissory notes, including related accrued interest, premiums, and fees. The company expects the funding to support operations into the second half of 2028.

Healthcare-focused institutional investors backed the financing, including Bain Capital Life Sciences, Janus Henderson Investors, Deep Track Capital, Longitude Capital, Soleus Capital, Invus, Sirenia Capital Management, Farallon Capital Management funds, Adage Capital Partners, and TCGX.

Phase 1 Trial Planned for Early 2027

North Immunology expects to begin a Phase 1a clinical trial of NOR-101 in the first quarter of 2027.

The company expects interim pharmacokinetic and safety data by mid-2027. It also plans to begin Phase 1b and Phase 2b studies in atopic dermatitis during 2027, with topline data from both studies expected in 2028.

Clinical trials assess the safety, dosage, biological activity, and potential effectiveness of a treatment. NOR-101’s clinical safety and effectiveness have not yet been established.

Aethlon Holders Expected to Own 4.75% of Combined Company

At the close of the merger, pre-merger Aethlon Medical stockholders are expected to own about 4.75% of the combined company. Pre-merger North Immunology stockholders, including investors 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 of record immediately before closing are also expected to receive contingent value rights tied to potential net proceeds from a future sale, license, transfer, divestiture, or other monetization of Aethlon’s legacy Hemopurifier® business.

Merger Expected to Close in First Quarter of 2027

Both boards have approved the transaction, which is expected to close in the first quarter of 2027.

Closing remains subject to shareholder approvals, the effectiveness of an SEC registration statement, Nasdaq approval for the initial listing, and other customary conditions.

Following closing, North Immunology’s current leadership team is expected to manage the combined company. North Immunology’s existing board, chaired by co-founder and ADAR1 Capital Management managing partner Daniel Schneeberger, is also expected to serve as the foundation of the new board alongside new independent directors.