ProPhase Labs (PRPH) and Advanced Biological Laboratories said Friday they have signed a letter of intent for a proposed reverse merger under which Advanced Biological Laboratories would become the majority stakeholder in the combined company.

Under the proposed deal, the ProPhase business may have an enterprise value of up to about $30 million. Advanced Biological shareholders would own roughly 76% of the combined entity and the company would contribute its advanced data processing systems, cloud computing for health data, and financing capabilities, according to a statement.

Upon merger completion, a new US unit would hold and operate ProPhase's Nebula Genomics platform, BE-Smart Esophageal Cancer Test program, and select consumer health operations, according to the parties.

The transaction is still subject to due diligence, negotiation and execution of definitive agreements, the companies said, adding there is no guarantee that a deal would be reached.

Shares of ProPhase were up more than 71% in recent Friday premarket activity.