North Immunology joins biotech reverse merger boom with Aethlon deal

Dive Brief:

North Immunology, in the early stages of developing a potential competitor for the widely popular inflammatory disease drug Dupixent, plans to go public next year via a reverse merger with Aethlon Medical.
After the merger, the companies expect North Immunology investors to own 95.25% of the new entity, with the rest going to Aethlon shareholders. Those who own Aethlon stock immediately prior to the merger will also get a contingent value right entitling them to potential proceeds from Aethlon’s legacy Hemopurifier business.
The new company will operate as North Immunology and trade on the Nasdaq under the ticker symbol “NRTX,” Aethlon said Thursday. North Immunology’s executives will lead the combined entity, and its directors will populate the board, along with some new independent directors. The companies expect the transaction to close in the first quarter of 2027.

Dive Insight:

Founded by ADAR1 Capital Management, North Immunology is joining a flood of biopharmaceutical companies choosing reverse mergers as a quick route to public markets. Once considered a backdoor for companies with less auspicious outlooks, the deals are now drawing promising startups and sophisticated healthcare investors.

A number of those investors took part in a $180 million private placement also announced on Thursday. The infusion of cash — from firms including Bain Capital, Janus Henderson and Deep Track Capital — should fund the combined company’s operations into the second half of 2028, Aethlon said.

North Immunology is betting that its lead asset, NOR-101, can overcome some of the limitations of Dupixent and other drugs commonly used to treat atopic dermatitis, the most common form of eczema. A presentation on the company’s website notes that available therapies only work in a portion of patients or, in the case of AbbVie’s Rinvoq, have safety concerns.

Like Dupixent, NOR-101 is designed to target IL-13, a protein that drives inflammation. But NOR-101 also zeroes in on IL-18. Going after two different inflammatory pathways may allow the drug to “deliver a best-in-disease therapeutic profile,” Mohit Gupta, North Immunology’s co-founder and chief scientific officer, said in the company’s statement.

Still, it’s early days for the North Immunology medicine, with a Phase 1a study set to begin in the first quarter of next year. And the company will have plenty of competition. Established drugmakers like AbbVie and newer companies including Kymera Therapeutics, Infinimmune and Talawar Therapeutics are all racing to offer improvements on Dupixent, which brought in $17.8 billion for Sanofi and Regeneron last year.