Redx Pharma, a UK-based clinical-stage biotechnology company, and Jounce Therapeutics, a Nasdaq-listed clinical-stage immunotherapy company, have agreed to merge in an all-stock deal that values the combined group at $425 million.
The combined group will operate as Redx Inc., which will trade on Nasdaq under the ticker REDX. It will be led by the incumbent Redx CEO Lisa Anson.
As per the terms of the merger deal, Redx Pharma’s shareholders will exchange each of their shares for 0.2105 shares of Jounce Therapeutics.
The share exchange ratio means that Redx Pharma’s shareholders will hold approximately a 63% stake in the combined entity, while shareholders of Jounce Therapeutics will own a stake of around 37%.
Redx Inc. is expected to boast a solid clinical pipeline and a proven track record in the development and discovery of highly specific therapies for treating cancer and fibrotic diseases.
Richard Murray — Jounce Therapeutics CEO and President said: “I am very proud of the work we have achieved at Jounce and today’s news is testament to the accomplishments of our team’s efforts. We are pleased that many of our employees will join the combined group and continue to focus on bringing much-needed alternatives to patients.
“Additionally, we are pleased that Redx will continue to advance certain of our early discovery programs. With a focus on cancer and fibrosis, and a strong scientific basis for discovery and development programs in those areas, we believe that the new company will be well positioned to succeed.”
Jounce Therapeutics is focused on changing the way cancer patients are treated through the development of therapies that help the immune system combat cancerous tumors and provide long-lasting benefits for patients via a biomarker-driven approach.
On the other side, Redx Pharma is focused on the development and discovery of small-molecule, novel targeted therapies for treating tumors and fibrotic disorders and the emerging field of cancer-related fibrosis.
The merger will result in the formation of a transatlantic organization with an established track record of expertise in biologics and small molecules as well as a pipeline for clinical trials with multiple value-inflection areas in the near as well as medium term.
The combined group’s top priority will be the development of RXC007, which is a next generation of selective ROCK2 inhibitor, that is currently being tested in a phase 2a clinical trial in idiopathic pulmonary fibrosis (IPF) with topline results expected in the first quarter of 2024.
ROCK2 inhibition has become a validated commercial drug with the potential for use in a variety of diseases, as a result of an announcement of US Food and Drug Administration (FDA) approval and the launch of the first drug with that mechanism.
Lisa Anson said: “By combining Redx’s proven track record in small molecule drug discovery and development with Jounce’s expertise in biologics and immunotherapy, we will establish a world-class biotech company with a robust pipeline, aimed at developing therapeutics for cancer and fibrotic disease.
“RXC007, our next-generation ROCK2 inhibitor, will lead the clinical pipeline, and we will now further investigate opportunities for this asset in cancer-associated fibrosis and other interstitial lung diseases.
“While the majority of the combined group’s operations, and its headquarters, will be at Alderley Park in the UK, we believe that listing solely on Nasdaq is the most efficient way to enable us to access a deep pool of risk capital and engage with specialist global investors to support our future growth.”
The merger deal is expected to close during Q2 2023. It is dependent on the approval of the shareholders of both firms and the usual regulatory approvals.
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