Korro Bio, Inc., an RNA editing company focused on the discovery and development of new genetic drugs, and Frequency Therapeutics, Inc.
The combined company will focus on advancing Korro Bio’s portfolio of RNA editing programs, expected to operate under Korro Bio, Inc. and will apply to trade on the Nasdaq under the ticker symbol KRRO.
Korro Bio has secured commitments from a syndicate of life science investors for a planned $117 million co-financing, co-led by Surveyor Capital (a Citadel company) and Cormorant Asset Management with participation from Atlas Venture, NEA, Platanus, Qiming Venture Partners USA, MP Healthcare Venture Management, Evenide Asset Management, Fidelity Management & Research Company LLC, Invus, Point72, Verition Fund Management, Monashee Investment Management, Sixty Degree Capital and additional investors.
Financing is expected to close shortly before completion of the merger. The combined company is expected to have approximately $170 million in cash, cash equivalents and securities after estimated transaction costs. The pro-forma cash balance is expected to provide a cash foundation through several value creation milestones through 2026. The merger and related financing are expected to close in the fourth quarter of 2023, subject to Frequency Therapeutics’ shareholder approval and other customs. closing condition.
“RNA editing, particularly using our OPERA platform, holds significant promise for changing the therapeutic landscape for both rare and common diseases. The ability to make single base changes to RNA using simple drug products provides opportunities to modify disease in unprecedented ways,” said Ram Aiyar, chief executive of Korro Bio.
“The strength of our OPERA platform is exemplified by our flagship program at AATD, where we have demonstrated an increase in normal A1AT protein to 85% of total circulating protein, which has potential disease-modifying effects. We are committed to creating value for shareholders of Korro Bio and Frequency Therapeutics as we work to develop a new class of innovative drugs that have the potential to improve patients’ lives.”
Main program for AATD
Korro Bio is advancing its main program for AATD to clinical trials and intends to submit regulatory filings in the second half of 2024. AATD is an inherited disease that results from a single genetic defect that manifests itself as a broad spectrum of clinical pathologies. Most of the patients are diagnosed later in life, having various clinical effects including liver disease and lung disease, eventually leading to organ transplantation in some cases.
Studies show that clinical unawareness of AATD results in large numbers of undiagnosed or misdiagnosed patients with approximately 100,000 patients in the US currently identified with AATD. Korro Bio’s main program focuses on precisely and temporarily editing genetic mutations in RNA, not permanently changing DNA. Korro Bio has also demonstrated the ability to edit in the coding region of the SERPINA1 gene indicating translation from the PiZ mouse model to non-human primates.
“Following a comprehensive review and consideration of our strategic options, our management and board of directors believe the merger with Korro Bio provides the best opportunity for the company and its shareholders,” said David. L. Lucchino, CEO of Therapeutic Frequency.
“Korro Bio’s RNA editing technology leverages genetics in a transient way, expanding the target space to intervene in biology in unique ways. We are confident in their ability to advance important genetic drugs with the potential to change patients’ lives.”
Korro Bio’s proprietary RNA editing platform allows broad indication with an initial focus on six wholly owned potential programs, including AATD.
“This transformative transaction allows us to bring our core program at AATD into the clinic and grow our pipeline,” said Vineet Agarwal, chief financial officer of Korro Bio.
“In addition, we will be able to fund our company through several value creation milestones through 2026.”
Pre-merger Frequency Therapeutics shareholders are expected to own approximately 8% of the combined company and pre-merger Korro Bio shareholders (including those who bought Korro Bio’s stake in private financing) are expected to own approximately 92% of the combined company. Under the terms of the merger agreement, Korro Bio’s shareholders will receive new shares issued from the common stock of Frequency Therapeutics according to the formula set out in the merger agreement. The percentage of the combined company that Frequency Therapeutics shareholders will own at closing of the merger can be adjusted based on Frequency Therapeutics’ net cash amount at closing.
Frequency Therapeutics has discontinued development of its remyelination program for multiple sclerosis as it is exploring strategic alternatives to it. If Frequency Therapeutics has not monetized its remyelination program for multiple sclerosis prior to the close of the proposed merger, Frequency Therapeutics’ shareholders of record will be granted contingent value rights (CVR) for each outstanding share of Frequency Therapeutics’ common stock held by Frequency. Therapeutics of shareholders before closing of the proposed merger. CVR will represent the right to receive certain cash payments from proceeds received by Frequency Therapeutics in connection with its remyelination program for multiple sclerosis which is in preclinical development.
The merger agreement was unanimously approved by the boards of directors of both companies.
About Korro Bio
Korro Bio is an RNA editing company focused on the discovery and development of new classes of precision genetic drugs for rare and highly prevalent diseases. RNA editing is a natural physiological process that occurs in cells, including a mechanism mediated by an enzyme called adenosine deaminase acting on RNA (ADAR). Korro Bio’s RNA editing approach involves co-opting these endogenous editing systems via exclusively engineered oligonucleotides to introduce precise editing to RNA. This technology enables the development of therapeutic candidates that provide the functional benefits of gene therapy with transient, titratable, and specific treatment regimens, offering the potential to advance genetic drugs beyond rare genetic diseases to larger patient populations with common diseases.
Korro Bio’s platform, OPERA (oligonucleotides promote RNA editing), builds on the understanding of ADAR biology, and combines oligo discovery, chemistry, and data-driven design with clinically validated delivery vehicles, to achieve highly selective RNA editing product candidates. OPERA is designed to enable the repair and precise modulation of disease-causing mutations and protein function to provide new possibilities for treating diseases where advances with existing technologies have been slow to materialize.
Korro Bio’s main program at AATD
AATD is an inherited genetic disorder that can cause severe progressive lung and liver disease due to a lack of normal alpha-1 antitrypsin protein (A1AT). Korro Bio’s AATD product candidate is an oligonucleotide that uses an intravenously administered lipid nanoparticle (LNP) based delivery system to restore normal functional A1AT production to liver hepatocytes. Oligonucleotide drug products co-opt the naturally occurring ADAR pathway, correct disease-associated mutations and restore normal A1AT production.
Korro Bio believes this will provide clinically differentiated benefits for liver and lung function in affected individuals. Proof of concept has been demonstrated in preclinical models, and studies in mice and non-human primates demonstrated high editing efficiency and expression of functional A1AT protein to support potential disease progression modification. Korro Bio intends to submit regulatory filings in the second half of 2024.
About the Korro Bio program portfolio
Korro Bio’s wholly owned early-stage pipeline targets multiple diseases, such as Parkinson’s disease, severe alcoholic hepatitis, amyotrophic lateral sclerosis, pain subsets, and cardiometabolic disease.
About Frequency Therapy
Headquartered in Lexington, Mass., Frequency Therapeutics pioneered a new category of regenerative medicine aimed at restoring human function by developing therapies that activate a person’s innate regenerative potential in the body through activation of progenitor cells.
Frequency Therapeutics’ flagship preclinical program is designed to activate oligodendrocyte precursor cells with the goal of promoting remyelination and potential functional recovery for individuals living with multiple sclerosis.