F-1: Scinai Immunotherapeutics Files for $15M ADS Resale

Scinai Immunotherapeutics Ltd. filed an F-1 registration statement for the resale of up to 4,800,000 American Depositary Shares by YA II PN, Ltd., potentially raising up to $15.0 million for the company.

Summary

• Scinai Immunotherapeutics Ltd. has filed an F-1 registration statement for the resale of up to 4,800,000 American Depositary Shares (ADSs) by YA II PN, Ltd., a selling shareholder.
• The company will not receive proceeds from the selling shareholder's resale but may receive up to $15.0 million in gross proceeds from direct sales of ADSs to YA under a Standby Equity Purchase Agreement (SEPA) over 36 months.
• Each ADS represents 4,000 ordinary shares, and 35,461 ADSs were issued to YA as a commitment fee for the SEPA.
• The company is an early-stage biopharmaceutical firm with two units: in-house development of inflammation and immunology (I&I) therapeutic products (NanoAbs) and a Contract Development and Manufacturing Organization (CDMO).
• The COVID-19 NanoAb program was suspended, and related patents abandoned, due to emerging variants and limited market interest.
• Preclinical studies for an anti-IL-17A/F NanoAb (SCN-1) for plaque psoriasis showed successful in-vivo results, demonstrating non-inferior anti-inflammatory effects compared to standard treatments.
• Positive regulatory feedback for SCN-1's Phase 1/2a clinical trial program was received from Germany's Paul Erlich Institute (PEI), with the trial expected to commence in H2 2026 and readout in 2027.
• Two applications for Euro 15 million grants (total Euro 30 million) from the Strategic Technologies for Europe Platform (STEP) were submitted on September 5, 2025, for SCN-1 and a novel tri-specific antibody, with decisions expected in Q1 2026.
• A binding option agreement was signed on March 27, 2025, to acquire Pincell srl, owner of PC111, a monoclonal antibody for rare skin diseases like pemphigus, Stevens-Johnson Syndrome (SJS), and Toxic Epidermal Necrolysis (TEN).
• PC111 has Orphan Drug Designation in Pemphigus from the European Medicines Agency and demonstrated the ability to block blister formation without steroids in a humanized FasL mouse model.
• An application for a Euro 12 million non-dilutive grant for PC111 development was not selected for funding on September 18, 2025, but an appeal is planned.
• The company has a history of operating losses and does not anticipate achieving overall profitability in the near term.
• As of June 30, 2025, cash and cash equivalents were $989 thousand (actual), increasing to $12,402 thousand on a pro forma as adjusted basis, reflecting recent and anticipated capital.
• An EIB loan of approximately EUR 26.6 million (equivalent to $31.35 million as of September 18, 2025) was converted into 1,000 preferred shares on August 21, 2024, with a stated redemption value of $34 million.

Sentiment

Score: 6

Explanation: The filing outlines a financing mechanism that provides potential capital runway, crucial for a biotech company with a history of losses. Positive preclinical data and regulatory feedback for SCN-1, along with the strategic acquisition option for PC111, show pipeline progress. However, the rejection of a significant grant for PC111 and the inherent dilution risk from the equity purchase agreement temper the overall sentiment. The long timelines for clinical trials and the competitive landscape also contribute to a cautious outlook.

Positives

• Secured a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $15.0 million in gross proceeds, providing a potential source of capital.
• Successful in-vivo preclinical study results for the anti-IL-17A/F NanoAb (SCN-1) for plaque psoriasis, demonstrating non-inferior anti-inflammatory effect compared to topical corticosteroids and systemic biologics.
• Received positive regulatory feedback from the Paul Erlich Institute (PEI) for the SCN-1 drug development program, comparable to a pre-IND meeting with the FDA.
• Applied for two Euro 15 million STEP grants (total Euro 30 million) which, if awarded, are expected to cover approximately 80% of the budget for two key drug candidates (anti-IL-17A/F NanoAb and tri-specific antibody).
• Binding option agreement to acquire Pincell srl, adding PC111, a monoclonal antibody for rare skin diseases with high unmet medical needs (pemphigus, SJS, TEN).
• PC111 has received Orphan Drug Designation in Pemphigus by the European Medicines Agency.
• PC111 does not suppress the immune system, potentially offering a safer profile compared to other inflammatory treatments.
• The CDMO business unit generates revenue and provides a complementary income source.
• Conversion of approximately EUR 26.6 million ($31.35 million) EIB loan into 1,000 preferred shares, reducing debt.

Negatives

• The company will not receive any proceeds from the immediate resale of ADSs by the Selling Shareholder.
• The grant application for Euro 12 million for PC111 development was not selected for funding, though an appeal is planned.
• Suspended the COVID-19 NanoAb program and abandoned related patents due to emerging variants and limited market interest and funding.
• History of operating losses and no expectation of near-term overall profitability.
• Significant dilution risk for existing shareholders from the sale and issuance of ADSs under the Purchase Agreement.
• Potential for significant declines in share price due to resale of a substantial number of shares.
• Inability to draw sufficient funds when needed under the Purchase Agreement due to market conditions or other factors.
• The company will require substantial additional financing to achieve its goals.
• The IL-17 field is highly competitive.

Risks

• We are an early-stage biopharmaceutical company with a history of operating losses and may never achieve profitability.
• We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.
• Our failure to meet the continued listing requirements of The Nasdaq Stock Market LLC (Nasdaq) could result in a delisting of the ADSs which could adversely affect the market liquidity of our shares and the market price of our shares could decrease significantly.
• Our business strategy may not be successful.
• We conduct most of our operations in Israel. Conditions in Israel, including Israel's war with Hamas and other terrorist organizations in the Gaza Strip and Israel's conflict with Hezbollah and with Iran, may affect our operations.
• We are highly dependent upon our ability to enter into agreements with partners to develop, commercialize, and market any current and future product candidate(s) or enter into other strategic partnerships.
• Raising additional capital may cause dilution to our existing shareholders, and debt financing, if available, may restrict our operations or require us to relinquish rights to our technologies or product candidate(s).
• Our novel nanosized antibodies, also known as VHH-antibodies, Nanobodies or NanoAbs, represent a relatively new approach to treating diseases, and we must overcome significant challenges in order to successfully develop, commercialize and manufacture product candidates based on this technology.
• Our product candidates are at the preclinical stage, and clinical trials are expensive, time-consuming, and inherently uncertain. Even if we successfully complete preclinical studies, we will not be able to advance our pipeline into clinical trials without raising significant additional capital. There is no assurance that such funding will be available to us on acceptable terms, if at all. If we are unable to secure the capital needed to initiate and conduct clinical trials, our ability to develop our product candidates and achieve regulatory approval would be materially impaired.
• Positive results from earlier preclinical data and clinical trials we conduct may not be predictive of the results in later clinical trials of current and future product candidates, and the results of any clinical trials we conduct may not be replicated in additional clinical trials that we may be required to conduct, which could result in development delays or a failure to obtain marketing approval.
• As part of our portfolio prioritization, and given the continued emergence of new COVID-19 variants and the difficulty of developing broad-spectrum NanoAbs, we suspended this program. In agreement with our partners at MPG and UMG, we made the strategic decision to abandon the related patents. Current market interest in and funding for COVID-19 therapeutics are limited, and resources are being directed toward programs with stronger commercial potential.
• If we are not successful in discovering, developing and commercializing current and future product candidates, our ability to expand our business and achieve our strategic objectives may be impaired.
• Under our collaboration with MPG and UMG, we may in-license up to nine NanoAbs, of which we have in-licensed candidates targeting COVID-19 and IL-17. The IL-17 field is highly competitive, and there is no assurance that we will in-license additional NanoAbs or successfully develop or commercialize those already licensed.
• We face significant competition. If we cannot successfully compete with new or existing product candidate(s), our marketing and sales will suffer, and we may never be profitable.
• Our NanoAbs program is based on an exclusive license from MPG and UMG, and we could lose our rights to this license if a dispute with MPG and/or UMG arises or if we fail to comply with the financial and other terms of the license.
• CDMO services are highly complex and failure to provide quality and timely services to our CDMO clients, could adversely impact our business.
• Our CDMO business is dependent upon the demand for our services by our customers.
• Significant delays in product manufacturing or development and in our ability to produce sufficient quantities to meet the needs of our clients could cause delays in recognizing revenues, which would harm our business, financial condition, operating results and cash flows.
• A disruption to our GMP biologics manufacturing facility in Jerusalem could impede our ability to deliver our CDMO services, which could adversely affect our business.
• It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to the Selling Shareholder, or the actual gross proceeds resulting from those sales.
• Limitations in the Purchase Agreement, including the Ownership Limitation, and our ability to meet the conditions necessary to deliver an Advance Notice, could prevent us from being able to raise funds up to the Commitment Amount.
• The resale by YA of a significant number of shares registered for resale in this offering at any given time, or the perception that these sales may occur, could cause the market price of the ADSs to decline and to be highly volatile.
• We will have broad discretion in how to use the net proceeds of this offering, and we may not use these proceeds in a manner currently contemplated.
• The sale of a substantial amount of ADSs, including resale of the ADSs held by the selling shareholder in the public market, could adversely affect the prevailing market price of the ADSs and could impair our ability to raise capital through the sale of additional equity securities.

Future Outlook

The company expects to commence a Phase 1/2a clinical trial for its anti-IL-17A/F NanoAb (SCN-1) in plaque psoriasis in the second half of 2026, with results anticipated in 2027. Decisions on two Euro 15 million STEP grants are expected in the first quarter of 2026, which, if awarded, would significantly fund the development of SCN-1 and a novel tri-specific antibody targeting a first-in-human Phase 1/2a trial in 2028. The company also intends to appeal the rejection of a Euro 12 million grant for PC111 development, with a final determination expected before the end of 2025. Despite a history of operating losses, the company aims to advance its pipeline and CDMO business, but does not expect near-term profitability and will require substantial additional financing.

Management Comments

• "We believe that certain aspects of our proposed project [PC111 grant application] were misconstrued or misanalyzed in the initial review, and our appeal will focus on addressing these issues."

Industry Context

The biopharmaceutical industry is characterized by high R&D costs, long development timelines, and significant regulatory hurdles. Scinai Immunotherapeutics operates in this environment, focusing on inflammation and immunology (I&I) with novel NanoAbs and a monoclonal antibody (PC111) for rare skin diseases. The shift away from COVID-19 therapeutics reflects broader market trends where funding and interest have diminished for new COVID-19 specific treatments. The company's CDMO business unit provides a complementary revenue stream, a common strategy for early-stage biotech companies to diversify income and leverage existing infrastructure. The pursuit of non-dilutive grants (STEP, FENG) is a critical strategy for biotech companies to fund expensive clinical development without further diluting shareholders, especially given the high capital requirements for advancing preclinical candidates into clinical trials. The IL-17 field is noted as highly competitive, indicating a challenging market for SCN-1.

Comparison to Industry Standards

• The company's anti-IL-17A/F NanoAb (SCN-1) demonstrated a non-inferior anti-inflammatory effect on psoriatic lesions compared to topical corticosteroids and systemic biologics in preclinical in-vivo studies, suggesting a competitive efficacy profile at an early stage.
• PC111, a monoclonal antibody for pemphigus, SJS, and TEN, is highlighted for not suppressing the immune system, which differentiates it from many other biologicals treating inflammatory conditions that can lead to significant side effects, potentially offering a safety advantage over existing or developing therapies.
• Pemphigus is currently treated with systemic corticosteroids, steroid-sparing agents, and rituximab. SJS/TEN have no approved drugs and are treated with supportive care and sometimes systemic immunomodulators like cyclosporine, etanercept, and corticosteroids, whose efficacy is controversial. PC111 aims to address this significant unmet medical need.
• The company's GMP biologics manufacturing facility is designed to meet EMA and FDA regulatory requirements, aligning with global quality standards for biopharmaceutical production.

Management Changes

Corporate Governance

Related Party Transactions

• Standby Equity Purchase Agreement dated September 10, 2025, with YA II PN, Ltd. (Selling Shareholder) for up to $15.0 million in ADSs.
• Previous March 2025 Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $10.0 million, under which 1,638,062 Advance Shares were sold for approximately $5.8 million.
• License Agreement and Research Collaboration Agreements with Max Planck Society (MPG) and University Medical Center Göttingen (UMG) for NanoAbs development.
• Loan Restructuring Agreement dated August 9, 2024, with the European Investment Bank (EIB), converting approximately EUR 26.6 million loan into 1,000 preferred shares.
• Investment Agreement with RK Stone Miami, LLC (August 19, 2024) for pre-funded warrants.
• Issuance of 80,736 ADSs to LCK JNK 1, LLC on February 19, 2025, upon cashless exercise of pre-funded warrants acquired from RK Stone Miami LLC.
• Binding Option Agreement dated March 27, 2025, for the acquisition of Pincell srl, involving potential milestone payments and royalties to Pincell's current shareholders.
• Issuance of RSUs and options to officers, directors, and employees as part of compensation.

Stakeholder Impact

• Shareholders face potential significant dilution from the Standby Equity Purchase Agreement and future capital raises, alongside market price volatility risk. However, successful pipeline development could lead to long-term value creation.
• Employees, particularly Pincell's management team, may experience integration into Scinai's Polish subsidiary if the acquisition option is exercised, indicating potential growth and new roles.
• Customers of the CDMO business unit can expect continued support and development of services.
• Creditors, specifically the EIB, have seen their loan converted into equity, improving the company's balance sheet and potentially its creditworthiness.
• Partners like MPG and UMG are involved in ongoing research collaboration and licensing agreements, indicating continued strategic alliances.
• Pincell's current shareholders stand to receive milestone payments and royalties if PC111 is successfully developed and commercialized, aligning their interests with the company's success.

Next Steps

• Appeal the rejection of the Euro 12 million grant for PC111 development (final determination anticipated before end of 2025).
• Await award decisions for the two Euro 15 million STEP grants (expected Q1 2026).
• Commence Phase 1/2a clinical trial of anti-IL-17A/F NanoAb (SCN-1) in Plaque Psoriasis (expected H2 2026).
• Readout for SCN-1 Phase 1/2a study (expected 2027).
• Exercise option to acquire Pincell srl (by February 28, 2026), contingent on grant award or securing $3 million.
• Advance novel long-acting tri-specific antibody program through IND-enabling activities and into a first-in-human Phase 1/2a clinical trial (targeted for 2028).
• File an IND application for PC111 to the FDA (or similar dossier) by December 31, 2028, to avoid seller repurchase right.
• Continue to draw funds from the Standby Equity Purchase Agreement with YA as needed, subject to market conditions and limitations.

Key Dates

Recommendation

The filing details a financing mechanism that provides a potential capital runway, which is crucial for a biotech company with a history of operating losses. Positive preclinical data for SCN-1 and the strategic acquisition option for PC111, along with the pursuit of significant non-dilutive grants, indicate active pipeline development and strategic growth initiatives. However, the immediate dilution risk from the resale offering, the rejection of a key grant for PC111 (even with an appeal), the highly competitive IL-17 field, and the long development timelines for all pipeline candidates introduce considerable uncertainty. The company's reliance on future capital raises and the inherent risks of early-stage drug development suggest a 'Hold' recommendation, as the potential upside is balanced by significant execution and market risks. Investors should monitor the success of grant appeals, clinical trial progress, and further financing activities.

Keywords

Scinai Immunotherapeutics, SCNI, F-1 Registration Statement, ADS Resale, Standby Equity Purchase Agreement, Capital Raise, Dilution, Biopharmaceutical, NanoAbs, VHH antibody fragments, IL-17, Psoriasis, Psoriatic Arthritis, Preclinical, Clinical Trials, CDMO, Pincell, PC111, Monoclonal Antibody, Pemphigus, Stevens-Johnson Syndrome, Toxic Epidermal Necrolysis, Orphan Drug, European Medicines Agency, Nasdaq, SEC Filing, Financial Reporting, Risk Management, Corporate Governance, Israel Biotech, EU Grants, Strategic Technologies for Europe Platform