Chinook Raises $106 Million Ahead of Merger with Aduro Biotech

Rare Daily Staff

Chinook Therapeutics is raising $106 million in a private placement financing ahead of its planned merger with Aduro Biotech to become a publicly traded company.

The company came out of stealth just one year ago with $65 million. Versant Ventures and Apple Tree Partners found Chinook to discover and develop precision medicines for rare kidney diseases.

“Upon close of our proposed merger with Aduro Biotech, Chinook will be well-capitalized to move its pipeline programs forward towards its objective of providing meaningful results for patients and to prepare pre-commercialization strategies,” said Eric Dobmeier, president and CEO of Chinook.

Chinook applies its proprietary discovery platform, which leverages single cell RNA sequencing, human-derived organoids and new translational models, to discover and develop therapeutics with novel mechanisms of action against key kidney disease pathways. The company’s lead candidates are focused on rare, severe disorders with defined and rapid clinical development pathways that may also have utility in more common kidney disease, expanding the potential patient populations.

Proceeds from the financing will help advance the combined companies’ pipelines. This includes planned phase 2 and phase 3 trials of atrasentan, an experimental selective endothelin receptor antagonist, in development for the treatment of IgA nephropathy and other primary glomerular diseases. The funds will also be used to support ongoing phase 1b and future trials of human monoclonal antibody BION-1301, which is also in development for the treatment of IgA nephropathy, as well as a planned phase 1 trial of CHK-336, an experimental small molecule in preclinical development for the treatment of an ultra-rare kidney disease. In addition, the funding will be used for additional research and discovery programs focused on the treatment of rare, severe chronic kidney diseases.

New investors participating in the private placement include EcoR1 Capital, OrbiMed, funds managed by Rock Springs Capital, Avidity Partners, Surveyor Capital, Ally Bridge Group, Monashee Investment Management, Northleaf Capital Partners, Janus Henderson Investors, Sphera Biotech, and other top-tier healthcare investors. As part of the financing, Chinook’s existing investors Versant Ventures, Apple Tree Partners, and Samsara BioCapital will purchase $25 million in Chinook common stock on the same terms as the new investors in lieu of their prior commitment to purchase convertible notes.

The private placement closing is expected to occur immediately prior to the closing the merger between Chinook and Aduro Biotech, which is expected to occur in the second half of 2020. At close, Aduro will be renamed Chinook Therapeutics and the merged company is expected to trade on the Nasdaq Global Select Market under the ticker symbol “KDNY.” At close, Chinook is expected to have at least $275 million in operating capital.

In the beginning of June, Chinook and Aduro said they had entered into a definitive merger agreement pursuant to which Aduro will acquire all of the outstanding capital stock of Chinook in exchange for shares of Aduro common stock representing approximately 50 percent of Aduro’s outstanding common stock immediately after completion of the transaction, excluding the shares to be issued in the private placement. The combined company will be run by Chinook’s management team and will be headquartered out of Chinook’s existing facilities in Vancouver, British Columbia and Seattle.

Photo: Eric Dobmeier, president and CEO of Chinook