RNA editing specialist Korro to go public via reverse merger

14 Jul 2023
www.biopharmadive.com
AcquisitionIPO
Dive Brief:
Private RNA editing company Korro Bio plans to combine with Frequency Therapeutics via an all-stock reverse merger the companies announced Friday.
Frequency shareholders will own about 8% of the combined company once the deal is completed, while Korro investors will own the remaining 92%.
The combined company will operate under Korro Bio’s name and trade on the Nasdaq stock exchange by the ticker symbol KRRO. It expects to have approximately $170 million in cash upon deal closing, which is anticipated by the fourth quarter.
Dive Insight:
Frequency has had a rocky year, recently undergoing a restructuring after an experimental drug for hearing loss failed to meet its goal in a clinical trial. The company shut down the program and laid off about half of its workforce as a result.
Frequency went public in 2018, but its shares have steadily lost value as it hit setbacks in its research. The company is one more than 85 biotech companies to cut staff this year, according to data from BioPharma Dive.
The merger gives Korro an alternative path to public markets than the traditional initial public offering. In contrast to recent years, biotechs have struggled to pull off IPOs over the past 18 months, leading some like Korro to consider reverse mergers.
Other companies to go this route include Enliven Therapeutics, Dianthus Therapeutics and Elicio Therapeutics.
Once the deal is complete, the combined company will have enough cash to fund operations into 2026. It will focus on developing Korro’s RNA editing technology, including a lead program aimed at the rare inherited disease alpha-1 antitrypsin deficiencyalpha-1 antitrypsin deficiency. Korro plans to ask regulators for permission to begin clinical testing in the second half of next year.
The new company will be led by Korro CEO Ram Aiyar. Its board of directors will have seven members, four of which will be named by Korro. Frequency CEO David Lucchino will also join the board.
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