Biotechnology company Immune Pharmaceuticals (IMNP ) focuses on acquiring, developing, and commercializing innovative treatments in inflammatory disease and oncology therapeutics. In April 2017, the company announced a restructuring, forming its oncology subsidiary, Cytovia, Inc. With this restructuring, both Immune and Cytovia, unlike the previously diversified Immune, will be pure player brands with better “operational focus, ability to attract investors and create shareholder value,” Immune reports. Cytovia will focus exclusively on the development and commercialization of novel immuno-oncology therapeutics and Immune will focus on clinical proof of concept development for its immuno-inflammatory and dermatology portfolio. The company reports that this new strategy will allow for specialization of both companies’ business profile, and better position them to maximize their resources and further enrich their pipelines.

The restructuring was prompted by “the disconnect between the intrinsic value of each of the key assets of the company and the stock price/market valuation.” Prior to the restructuring, Cytovia had limited resources available to pursue development in oncology under the diversified company. The move also comes amidst Immune’s recent struggles to maintain Nasdaq compliance, which the company announced in June 2017 had been resolved.

Immune’s lead asset, Bertilimumab, is a novel personalized therapy currently undergoing clinical trials for ulcerative colitis and bullous pemphigoid, diseases that lack treatment options. Immune is also in the preclinical stage for Nanocyclo, a topical treatment for psoriasis and atopic dermatitis. Immune expects Phase IIa clinical trials for Nanocyclo later in 2017.

Presently, Cytovia remains a subsidiary of Immune. Shareholders are eager for confirmation from Immune of a potential spinoff transaction. Upon such a transaction, Cytovia would be financed independently and IMNP shareholders would receive proportional shares into the spinoff company. This strategy would allow shareholders to benefit from the growing intellectual portfolios and pipelines of the two separate companies that hope to thrive in their respective domains. Immune, under that scenario, could be recapitalized and thus be able to accelerate development of its key drugs.

With this strategic move, expectations will be high for advances in development and commercialization of the key assets of both Immune and Cytovia. Ceplene, Cytovia’s lead asset, serves a crucial unmet medical need as an immunotherapy treatment for remission maintenance in patients with Acute Myeloid Leukemia (AML), a blood cancer with poor prognosis once most patients relapse after first remission. Working synergistically with Novartis’ (NVS) Proleukin (interleukin-2), Ceplene elicits the body’s immune response by proliferating, activating, and protecting T cells and Natural Killer (NK) cells. Ceplene currently has European regulatory approval, and Cytovia is undertaking strategies to commercialize it in various regions, as well as develop indications for the drug.

Immune’s recent transaction with Mylan (MYL) to regain worldwide rights to Ceplene positions Cytovia as a commercial company. The company announced an agreement with Pint Pharma, which will leverage the drug’s existing European approval to license and commercialize Ceplene in the Latin American markets to generate product sales and licensing revenue. Immune expects that the focus of Cytovia will be the European market for the drug, which has an addressable market of $175 million, while Pint will focus on the Latin America market with an addressable market of $100 million. LATAM royalties are not yet disclosed, but could exceed $30 million a year based on comparable transactions.

Cytovia is also launching a global trial, the REMAIN study, to gain regulatory approval for Ceplene in the United States. Following the FDA’s advice for approval, the international study aims to prove Ceplene’s efficacy in overall survival when used with low-dose Proleukin.

In pursuit of new indications for Ceplene, Cytovia has also announced a study evaluating the safety and efficacy of Ceplene for Chronic Myelomonocytic Leukemia (CMML). Cytovia has filed a patent for Ceplene in combination with checkpoint inhibitors, such as Merck’s (MRK) Keytruda and Bristol-Meyers Squibb’s (BMY) Opdivo. This combination would lead to indications for Ceplene in different types of cancers, such as melanoma and renal cell carcinoma.

Dr. Daniel Teper, former CEO of Immune, is now taking the leadership of Cytovia as the subsidiary’s CEO and will remain on the board of Immune. Dr. Teper’s ongoing involvement in both entities serves as a sign of confidence in the companies and their assets going forward. Dr. Teper will contribute to Cytovia his extensive European and US commercial experience at major biopharmaceutical companies such as Novartis (NVS), Sanofi (SNY), and GlaxoSmithKline (GSK ). Dr. Massimo Radaelli, Executive Chairman of Pint Pharma, will be joining the board of Cytovia to lend his expertise as well. Dr. Radaelli served on the board of Ariad (ARIA ), a US biotech oncology company that was acquired by Takeda (TYO) for $5 billion in February 2017. He also served as President and CEO of Dompé International SA, a leading pharmaceutical company, leading the company’s global strategy in international commercialization.

There are promising growth opportunities on the horizon for Cytovia, as Ceplene in combination with proleukin has attracted critical interest from clinicians and multiple scientific publications, including a 2016 presentation of a study at the American Academy of Cancer Research and a publication of trial results in Leukemia, the leading hematology journal, in 2017.

As Cytovia grows toward an independent leader in immuno-oncology, its path forward may be dictated by its ability to attract enough capital. Potential business strategies include following the model of Celator, a clinical-stage biopharmaceutical company that was acquired by Jazz Pharmaceuticals (JAZZ) for $1.5 billion based on a successful clinical trial of their lead drug prior to commercialization. Cytovia could also follow the path of Tesaro (TSRO), an oncology-focused biopharmaceutical company founded in 2010 that, in the short 7 years since its inception, reached a valuation exceeding $7 billion. Tesaro is now attracting interest from major biopharmaceutical companies for a potential sale. Alternatively, Cytovia could also position itself as a commercial, specialty oncology company. Hoping to follow these leading examples, Immune has expressed confidence in the future of the companies, reporting, “spin-off strategies have been successfully implemented both in biotech and in other industries to unlock to shareholders the value of assets which require distinct business strategies.”