Executive Summary / Key Takeaways

• Aptorum Group Limited is undergoing a significant strategic transformation through its definitive merger with DiamiR Biosciences Corp., pivoting to integrate innovative blood-based diagnostics for brain health with its existing clinical-stage biopharmaceutical pipeline focused on oncology and infectious diseases.
• The recent New York State Department of Health approval for DiamiR's APOE Genotyping test is a critical operational milestone, enabling nationwide commercialization and establishing a near-term revenue stream for the combined entity.
• Despite current early-stage financials characterized by zero revenue and negative profitability, the merger is designed to create a diversified company with revenue generation potential from biopharma services and biomarker panels, enhancing its competitive moat in specialized therapeutic and diagnostic areas.
• Aptorum's technological differentiators, including its systematic screening and microbiome-based drug discovery platforms, coupled with DiamiR's non-invasive diagnostic capabilities, position the company to address unmet medical needs with targeted solutions.
• Investors should monitor the successful integration of DiamiR, the commercial ramp-up of the APOE Genotyping test, and progress in Aptorum's clinical pipeline as key indicators of future value creation against a backdrop of intense competition and capital requirements.

Aptorum's Evolving Horizon: From Niche Biopharma to Diversified Health Innovator

Aptorum Group Limited, a clinical-stage biopharmaceutical company headquartered in London, has historically dedicated its efforts to the discovery, development, and commercialization of therapeutic products for oncology and infectious diseases. The company's journey began in 2010 as APTUS Holdings Limited, rebranding to Aptorum Group in October 2017. This foundational focus has shaped a pipeline aimed at addressing significant unmet medical needs. However, a pivotal strategic shift is now redefining Aptorum's trajectory, positioning it as a more diversified health innovator.

The most significant development in Aptorum's recent history is its definitive Agreement and Plan of Merger with DiamiR Biosciences Corp., announced on July 14, 2025. This all-stock transaction is set to transform DiamiR into a wholly-owned subsidiary of Aptorum, with the combined entity expecting to maintain its listing on the Nasdaq Stock Market. This merger represents a strategic pivot, expanding Aptorum's reach beyond traditional therapeutics into the burgeoning field of blood-based diagnostics for brain health and other diseases. This move is critical for Aptorum, as it seeks to establish a more robust and diversified business model in a highly competitive biopharmaceutical landscape.

Technological Edge and Innovation Driving Future Value

Aptorum's core strength lies in its differentiated technological approach to drug discovery and now, through DiamiR, in advanced diagnostics. The company's biopharmaceutical pipeline leverages systematic screening and microbiome-based platforms, which are designed to identify and develop targeted therapies more efficiently. For instance, SACT-1, a repurposed drug candidate, is in Phase 1 clinical trials for neuroblastoma and other cancer types, while ALS-4, another repurposed small molecule, is in Phase 1 for bacterial infections such as Staphylococcus aureus, Mycobacterium tuberculosis, and Pseudomonas aeruginosa. Additionally, the company is advancing RPIDD, a liquid biopsy rapid pathogen diagnostic, in preclinical trials, alongside other preclinical assets targeting conditions from coronavirus disease (SACT-COV19) to endometriosis (NLS-1) and obesity (CLS-1).

The integration of DiamiR Biosciences introduces a crucial technological differentiator: innovative blood-based diagnostic tests for brain health. DiamiR's APOE Genotyping test, which recently received Clinical Laboratory Evaluation Program (CLEP) Test Approval from the New York State Department of Health on August 21, 2025, exemplifies this. This test identifies variants of the APOE gene (ε2, ε3, and ε4) that significantly influence the likelihood of developing late-onset Alzheimer's disease and other neurological disorders. Carriers of a single APOE ε4 allele face a three- to four-fold higher risk, while those with two copies face up to a twelve-fold increase. This quantifiable diagnostic capability provides a tangible benefit, enabling earlier risk assessment, informing clinical trial enrollment, and facilitating personalized care strategies for individuals at risk of cognitive decline.

For investors, these technological differentiators are paramount. Aptorum's systematic screening and microbiome platforms offer the promise of more efficient drug discovery, potentially leading to a stronger pipeline and improved margins by reducing development costs. DiamiR's approved APOE Genotyping test, with its clear performance metrics, provides an immediate pathway to revenue generation through biopharma services and biomarker panels. This dual focus on innovative therapeutics and revenue-generating diagnostics strengthens Aptorum's competitive moat, offering specialized, targeted solutions that can command stronger customer loyalty and potentially better pricing power in niche markets.

Strategic Evolution and the DiamiR Merger

Aptorum's strategic evolution has been marked by a commitment to addressing unmet medical needs. The company successfully regained compliance with Nasdaq's minimum bid price requirement on August 4, 2025, demonstrating its ability to navigate regulatory challenges and maintain its public listing. This resilience set the stage for the transformative DiamiR merger.

The definitive merger agreement, entered into on July 14, 2025, will see DiamiR Biosciences become a wholly-owned subsidiary of Aptorum Group. Upon the anticipated closing in the fourth quarter of 2025, DiamiR shareholders are expected to own approximately 70% of the combined company, with existing Aptorum shareholders retaining 30%. The combined entity will be headquartered in Princeton, New Jersey, under a new leadership structure. This strategic move is designed to create a more comprehensive and diversified biopharmaceutical company, leveraging DiamiR's expertise in blood-based diagnostics to complement Aptorum's therapeutic pipeline. The merger is expected to deliver both near and long-term value through revenue generation from biopharma services and biomarker panels for complex-biology indications, while establishing leadership in non-invasive, blood-based testing.

Financial Performance and Operational Realities

As a clinical-stage biopharmaceutical company, Aptorum's financial performance reflects its heavy investment in research and development and its nascent stage of commercialization. For the fiscal year ended December 31, 2024, Aptorum reported zero total revenue and a gross profit of zero. The company incurred an operating income of -3.00 million and a net income of -4.27 million. Research and development expenses stood at 2.20 million, while selling, general, and administrative expenses were 1.46 million.

The balance sheet as of December 31, 2024, shows cash and cash equivalents of 874,238, with total debt at 3.35 million and total equity at 21.13 million. The accumulated deficit, reflected in retained earnings, was -72.43 million, underscoring the significant investment required in drug development. Cash flow from operating activities for 2024 was -1.19 million, resulting in a free cash flow of -1.19 million. The latest TTM ratios as of September 27, 2025, indicate a market capitalization of 13.22 million and an enterprise value of 6.34 million. The current ratio of 0.22 and quick ratio of 0.20 highlight the company's limited short-term liquidity. These figures are typical for a company at Aptorum's stage, where substantial capital is deployed into pipeline development before commercial revenues materialize. The DiamiR merger is therefore critical, as it introduces a near-term revenue-generating asset that can help mitigate these financial pressures and provide a foundation for future growth.

Competitive Landscape and Strategic Positioning

Aptorum Group operates within a highly competitive biopharmaceutical industry, contending with established giants such as Pfizer (PFE), Johnson & & Johnson (JNJ), Merck (MRK), and Gilead Sciences (GILD). These larger competitors possess extensive R&D capabilities, vast distribution networks, and robust financial resources, enabling them to dominate market share in broad therapeutic areas like oncology and infectious diseases. Aptorum, by contrast, is positioned as a smaller, niche player, focusing on early-stage development and specialized therapeutic and diagnostic solutions.

While Aptorum's pipeline in areas like cancer (SACT-1) and bacterial infections (ALS-4) directly overlaps with the interests of these larger players, its market influence and financial performance metrics, such as revenue growth and profitability, currently lag significantly. For instance, Aptorum's TTM gross, operating, and net profit margins are all 0.00%, reflecting its pre-commercial stage, whereas established competitors demonstrate consistent revenue growth and positive profitability. Aptorum's competitive advantages, or "moats," stem from its proprietary microbiome-based research platforms and systematic drug screening methods, which offer the potential for more targeted and efficient drug discovery. The DiamiR merger further enhances this by adding leadership in non-invasive, blood-based diagnostics for brain health, a specialized area that could yield stronger customer loyalty and pricing power.

However, Aptorum faces vulnerabilities due to its smaller scale, which can lead to higher customer acquisition costs and dependencies on external partnerships for manufacturing. These factors can impact its cost structures and operational efficiency compared to the integrated operations of its larger rivals. The industry trend towards AI-driven drug discovery, while a potential opportunity for faster innovation, also poses a competitive threat from well-capitalized players who can invest heavily in such technologies. Aptorum's strategic response, particularly through the DiamiR merger, aims to carve out a defensible position by focusing on specialized, high-value areas where its technological differentiators can provide a meaningful edge.

Outlook and Growth Catalysts

The immediate outlook for Aptorum Group is significantly shaped by the impending closure of the DiamiR Biosciences merger in the fourth quarter of 2025. This event is a crucial catalyst, as it is expected to transform Aptorum into a more diversified entity with an immediate revenue-generating asset. The New York State Department of Health's approval for DiamiR's APOE Genotyping test is a concrete step towards this, allowing the company to offer its validated molecular testing nationwide through its CLIA-certified and CAP-accredited clinical laboratory.

Dr. Alidad Mireskandari, CEO of DiamiR Biosciences, emphasized the significance of this milestone, stating, "We are very pleased to have received approval from the NYSDOH for our APOE genotyping test and excited about achieving this regulatory milestone as we continue to build our portfolio of molecular tests for brain health, including neurodegenerative diseases such as mild cognitive impairment and Alzheimer's disease. This milestone expands access to an important tool that can help inform risk assessment, clinical trial enrollment, and personalized care strategies for individuals at risk of cognitive decline." This statement underscores the strategic intent to leverage DiamiR's diagnostic platform to drive revenue through biopharma services and biomarker panels, providing a much-needed financial foundation for the combined company. The ongoing development of Aptorum's therapeutic pipeline, with candidates like SACT-1 and ALS-4 in Phase 1 trials, represents longer-term growth drivers, contingent on successful clinical progression.

Risks to the Investment Thesis

Investing in Aptorum Group carries inherent risks typical of a clinical-stage biopharmaceutical company, compounded by the complexities of a merger. A primary risk is the high failure rate associated with clinical trials; the success of SACT-1 and ALS-4, both in Phase 1, is far from guaranteed. Similarly, the numerous preclinical candidates face significant hurdles before reaching commercialization.

The integration of DiamiR Biosciences presents operational and cultural challenges that could impact the combined entity's efficiency and strategic execution. While DiamiR's APOE Genotyping test has received approval, its commercial adoption and revenue generation are subject to market acceptance and competitive pressures. Furthermore, Aptorum's current financial position, characterized by negative cash flow and limited liquidity, necessitates careful capital management. The company operates in a highly competitive environment dominated by well-capitalized pharmaceutical giants, which could limit its market penetration and pricing power. Any unforeseen regulatory delays or adverse clinical trial results could significantly impact the company's valuation and long-term prospects.

Conclusion

Aptorum Group Limited stands at a pivotal juncture, strategically transforming its identity from a pure-play clinical-stage biopharma into a diversified health innovator through the DiamiR Biosciences merger. This strategic pivot, underpinned by DiamiR's approved APOE Genotyping test, offers a tangible pathway to near-term revenue generation, a critical development for a company previously operating without commercial income. The combined entity's focus on specialized therapeutics for oncology and infectious diseases, alongside innovative blood-based diagnostics for brain health, positions it to address significant unmet medical needs with differentiated technological solutions.

While the company's current financial metrics reflect the substantial investment and inherent risks of early-stage biopharmaceutical development, the DiamiR merger provides a crucial catalyst for future growth and financial stability. The ability to leverage DiamiR's diagnostic platform for biopharma services and biomarker panels, coupled with Aptorum's unique drug discovery approaches, forms the core of the investment thesis. Investors should closely monitor the successful integration of DiamiR, the commercial traction of its diagnostic offerings, and the continued progression of Aptorum's therapeutic pipeline as key determinants of its long-term value creation in a competitive and capital-intensive industry.