Neurogene and Neoleukin Therapeutics have entered a definitive agreement to merge as part of an all-stock transaction.
The combined company will trade under the Neurogene name (NASDAQ: NGNE).
The news of the merger was followed by a 5% decline in the value of Neoleukin shares in the premarket trading today. Neuoleukin’s market cap is $33.9m.
There has been increased activity in mergers and acquisitions in the gene therapy area in recent months, including the Korro Bio and Frequency Therapeutics merger, the Polypus acquisition by Sartorius, and NKGen Biotech and Graf Acquisition merger.
In anticipation of the merger, Neurogene reported a $95m oversubscribed private financing round consisting of healthcare specialists and mutual fund investors. Thereby, increasing the total cash reserves for the merged entity to $200m as of market close on 17 July, as per the press release. These cash reserves are expected to fund the pipeline development and company operation until the second half of 2026.
The merger and financing rounds are expected to close in the last quarter of 2023, subject to appropriate approvals and securities filing with the US Securities and Exchange Commission (SEC).
The merged company will further develop Neurogene’s pipeline, which is based on the proprietary expression attenuation via construct tuning (EXACT) transgene regulation technology.
The lead candidates include NGN-401, an adeno-associated virus gene therapy for the treatment of a rare genetic neurological and developmental disorder (Rett syndrome), and NGN-101, a gene therapy for the treatment of neurodegeneration and vision loss associated with the Neuronal Ceroid Lipofuscinosis subtype 5 (CLN5) Batten disease. Both drugs are currently in Phase I/II trials (NCT05898620 and NCT05228145), with data readouts in 2024-25.
Neurogene’s pipeline also includes an undisclosed early discovery candidate. Additionally, the merged company plans to develop its internal manufacturing capabilities.
Viral vector gene therapies are expected to dominate to research landscape, with GlobalData forecasting nine times the number of studies for viral vectors relative to non-viral vector trials.
GlobalData is the parent company of Pharmaceutical Technology.