Aduro Biotech and Chinook Agree to Merge with Focus on Rare Kidney Diseases
June 3, 2020
Rare Daily Staff
Publicly traded Aduro Biotech and privately held Chinook Therapeutics said they have agreed to merge with the merged company focusing on developing therapies for rare kidney diseases.
The merged company will trade on the Nasdaq Global Market and operate under the name Chinook Therapeutics. The combined company is expected to have approximately $200 million in cash, cash equivalents and marketable securities at closing, including $25 million in additional financing committed by Chinook’s existing investors.
“After an extensive and thorough review of strategic and potentially transformative options for Aduro, we are very pleased to announce a proposed merger with Chinook,” said Stephen Isaacs, chairman, president and CEO of Aduro. “We believe the combined company’s strong pipeline, near-term milestones, seasoned leadership team and focus on kidney diseases offer an excellent opportunity to benefit patients and provide value to our stockholders.”
Under the terms of the merger, Aduro will acquire all of the outstanding capital stock of Chinook in exchange for the issuance of newly issued shares of Aduro common stock upon closing. Upon completion of the merger, Aduro’s then-current equity holders and the former Chinook equity holders will each own approximately 50 percent of Aduro’s common stock, calculated on a fully diluted basis, based upon an expected Aduro net cash balance of $145 million and expected Chinook cash and cash equivalents of $10 million at closing, but subject to adjustment for each company’s actual balances at closing.
Chinook’s existing investors have also committed to invest an additional $25 million in convertible notes prior to closing, which will convert into Aduro common stock following the merger.
Aduro stockholders will be issued contingent value rights representing the right to receive certain cash payments from proceeds received by Aduro, if any, related to its non-renal assets for a period of ten years following closing.
The combined company’s pipeline will include two experimental therapies for IgA nephropathy, a third for an ultra-rare kidney disease, and additional research and discovery programs focused on the treatment of rare, severe chronic kidney diseases. Aduro is currently exploring strategic alternatives for its legacy programs outside of kidney disease.
The transaction has been unanimously approved by the board of directors of both companies. The combined company will be headquartered out of Chinook’s existing facilities in Vancouver, British Columbia and Seattle, Washington.
“The proposed merger with Aduro is a unique opportunity for Chinook to build a leading company in the kidney disease space,” said Eric Dobmeier, president and CEO of Chinook Therapeutics. “The combined company will have the demonstrated expertise and strong balance sheet to advance its three lead programs towards multiple anticipated milestones over the next 12 to 18 months.”
Photo: Eric Dobmeier, president and chief executive officer of Chinook Therapeutics.
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