Scinai Immunotherapeutics Establishes U.S. Subsidiary for CDMO Business Unit, Scinai Bioservices Inc.

Rhea-AI Summary

Scinai Immunotherapeutics (Nasdaq: SCNI) has established a U.S. subsidiary, Scinai Bioservices Inc., for its Contract Development and Manufacturing Services (CDMO) business unit. The company's Jerusalem facility includes 20,000 square feet of clean rooms and laboratories operating under cGMP conditions, compliant with EMA and FDA requirements.

Since launching in 2024, the CDMO unit has executed drug development projects for nine biotech companies, including process development, scale-up, and drug manufacturing services. The U.S. expansion aims to capitalize on growing demand for biological early-stage drug development services, particularly amid capacity constraints and the BIOSECURE Act's restrictions on foreign biotech companies. The company has already secured its first U.S. customer, Serpin Pharma, for clinical manufacturing support.

Positive

• Secured first U.S. customer (Serpin Pharma) for clinical manufacturing
• Executed projects with nine different biotech companies since launch
• Strategic positioning to benefit from BIOSECURE Act restrictions on foreign CDMOs
• 20,000 sq ft FDA/EMA-compliant manufacturing facility

Negative

• None.

Insights

Market Research Analyst

The establishment of Scinai's U.S. subsidiary is strategically timed to capitalize on the growing CDMO market opportunity, particularly given the BIOSECURE Act's implications. The company is positioning itself to fill a critical gap in early-stage biologics manufacturing, with potential to capture market share from Chinese CDMOs that may be affected by new regulations. With nine biotech clients already secured and a 20,000 square foot FDA-compliant facility, Scinai is well-positioned to serve the underserved U.S. market segment. The focus on early-stage projects and boutique CDMO services addresses a specific market need where capacity constraints are most acute.

Financial Analyst

The expansion into the U.S. market through a Delaware-based subsidiary represents a significant growth catalyst for Scinai. The timing is particularly advantageous given the BIOSECURE Act's potential to redirect business from Chinese CDMOs to alternative providers. The company's existing infrastructure and track record with nine clients demonstrates operational capability, while the U.S. presence should enhance access to government-funded biotech startups. This strategic move could accelerate revenue growth in the CDMO segment, though specific financial projections are not provided. The recent contract with Serpin Pharma validates the expansion strategy.

JERUSALEM, Dec. 16, 2024 /PRNewswire/ -- Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) ("Scinai" or the "Company"), a biopharmaceutical company focused on developing inflammation and immunology (I&I) biological products and providing CDMO services through its Scinai Bioservices business unit, announced today the establishment of a U.S.-based subsidiary for its Contract Development and Manufacturing Services. The new subsidiary, incorporated in Delaware, will operate under the name Scinai Bioservices Inc.

In 2024, Scinai launched its CDMO business unit, branded as Scinai Bioservices, operating from the Company's site in Jerusalem, Israel. This facility includes 1,850 square meters (approximately 20,000 square feet) of clean rooms and laboratories, all operating under cGMP conditions in compliance with European Medicines Agency (EMA) and FDA requirements.

Since its inception, the CDMO unit has executed drug development projects for nine different biotech companies. These activities have included upstream and downstream process development, scale-up, analytical methods development and drug manufacturing for pre-clinical and clinical supplies. Additionally, the Company has partnered with Ayana Pharma to provide liposomal encapsulated drug development services.

According to GlobalData, the demand for Contract Development and Manufacturing Services (CDMO) for biological early-stage drugs is growing in the U.S. This trend is driven by several factors, including improved molecular biological understanding, accelerated market approvals, and the increasing number of novel drug candidates. As the complexity of biologics increases, so does the demand for high-quality development and manufacturing capacities that meet stringent regulatory standards.

However, while there is a growing demand for CDMO services, the capacity to meet this demand is currently a concern. The specific capacity to handle early-stage projects, an area where Scinai BioServices operates, may be strained due to the complex manufacturing routes associated with biologics. Additionally, the BIOSECURE Act, introduced in January 2024, aims to prevent "foreign adversary biotech companies" from receiving U.S. federal funding. According to GlobalData's Pharma Intelligence Center Deal Database, this legislation could impact over 120 U.S. biopharmaceutical drugs in development by companies partnered with Chinese CDMOs and biotechnology companies. Of these, approximately half are in clinical-stage development (Phases I to III) and a third are in early-stage preclinical trials and discovery.

Scinai's new U.S. subsidiary, Scinai Bioservices Inc., aims to serve U.S.-based early-stage biotech companies by providing the required CDMO services that are currently in short supply. This is coupled with growing demand for boutique CDMO services from early-stage biotech companies seeking fast project onset at competitive pricing without compromising on scientific and quality standards. Moreover, Scinai Bioservices Inc. allows  early stage biotech startups, supported by U.S. government grant funding, to use their grant money by contracting with us, avoiding any concerns related to the BIOSECURE Act. 

Scinai's CDMO business unit is focused on rapid growth, acquiring new clients, and building its reputation and brand awareness. The Company expects revenues from the CDMO business to increase materially in the coming years.

Amir Reichman, CEO of Scinai, commented: "We are thrilled and energized by the opening of our new subsidiary in the U.S. Last week, we signed our first contract with U.S. customer, Serpin Pharma, to support their clinical manufacturing. I believe that our expanded presence in the U.S. will significantly enhance the prospects of our CDMO unit."

About Scinai Immunotherapeutics

Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) is a biopharmaceutical company with two complementary business units, one focused on in-house development of inflammation and immunology (I&I) biological therapeutic products beginning with an innovative, de-risked pipeline of nanosized VHH antibodies (nanoAbs) targeting diseases with large unmet medical needs, and the other a boutique CDMO providing biological drug development, analytical methods development, clinical cGMP manufacturing, and pre-clinical and clinical trial design and execution services for early stage biotech drug development projects.

Company website: www.scinai.com.

Company Contacts
Investor Relations | +972 8 930 2529 | ir@scinai.com
Business Development | +972 8 930 2529 | bd@scinai.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995. Words such as "expect," "believe," "intend," "plan," "continue," "may," "will," "anticipate," and similar expressions are intended to identify forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Examples of such statements include, but are not limited to,  the expected revenues and prospects of Scinai's CDMO business. These forward-looking statements reflect management's current views with respect to certain current and future events and are subject to various risks, uncertainties and assumptions that could cause the results to differ materially from those expected by the management of Scinai Immunotherapeutics Ltd. Risks and uncertainties include, but are not limited to;  lower than anticipated revenues of Scinai's CDMO business; the risk that Scinai's expanded presence in the U.S. will not significantly enhance the prospects of its CDMO unit; the risk that the Company will otherwise be unable to  remain compliant with the continued listing requirements of Nasdaq; failure to sign agreements with other potential clients of the CDMO business; a delay in the commencement and results of pre-clinical and clinical studies, including the Phase 1/2a study for psoriasis, the risk of delay in, Scinai's inability to conduct, or the unsuccessful results of, its research and development activities, including the contemplated in-vivo studies and a clinical trial; the risk that Scinai will not be successful in expanding its CDMO business or in-license other NanoAbs; the risk that Scinai may not be able to secure additional capital on attractive terms, if at all; the risk that the therapeutic and commercial potential of NanoAbs will not be met or that Scinai will not be successful in bringing the NanoAbs towards commercialization; the risk of a delay in the preclinical and clinical trials data for NanoAbs, if any; the risk that our business strategy may not be successful; Scinai's ability to acquire rights to additional product opportunities; Scinai's ability to enter into collaborations on terms acceptable to Scinai or at all; timing of receipt of regulatory approval of Scinai's manufacturing facility in Jerusalem, if at all or when required; the risk that the manufacturing facility will not be able to be used for a wide variety of applications and other vaccine and treatment technologies; and the risk that drug development involves a lengthy and expensive process with uncertain outcomes. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission ("SEC") on May 15, 2024, and the Company's subsequent filings with the SEC. Scinai undertakes no obligation to revise or update any forward-looking statement for any reason.

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SOURCE Scinai Immunotherapeutics Ltd.

FAQ

What is the significance of Scinai's (SCNI) new U.S. subsidiary for its CDMO business?

The new U.S. subsidiary allows Scinai to serve U.S.-based early-stage biotech companies, capitalize on growing CDMO demand, and enable U.S. companies with government grants to contract services while complying with the BIOSECURE Act.

How many biotech companies has Scinai's (SCNI) CDMO unit worked with since its 2024 launch?

Since its launch in 2024, Scinai's CDMO unit has executed drug development projects for nine different biotech companies.

What manufacturing capabilities does Scinai (SCNI) have at its Jerusalem facility?

Scinai's Jerusalem facility features 1,850 square meters (20,000 square feet) of clean rooms and laboratories operating under cGMP conditions, compliant with EMA and FDA requirements.

Who is Scinai's (SCNI) first U.S. customer for its CDMO services?

Serpin Pharma is Scinai's first U.S. customer for clinical manufacturing support through its new U.S. subsidiary.

How does the 2024 BIOSECURE Act benefit Scinai's (SCNI) U.S. expansion?

The BIOSECURE Act restricts U.S. federal funding to foreign adversary biotech companies, creating opportunities for Scinai to serve U.S. companies that previously worked with Chinese CDMOs.