Homology Medicines to Reverse Merge with Q32 Bio
November 16, 2023
Rare Daily Staff
Rare disease focused biotech Homology Medicines entered into a definitive merger agreement with Q32 Bio to combine the companies in an all-stock transaction.
The combined company will focus on advancing Q32 Bio’s wholly owned clinical development candidates for the treatment of autoimmune and inflammatory diseases. Upon completion of the merger, the combined company will operate as Q32 Bio and is expected to trade under the Nasdaq ticker symbol “QTTB”.
Homology Medicines had discontinued development of its R&D programs, including HMI-103 for the treatment of PKU, and was exploring strategic alternatives for its programs and platform technology.
“Following a comprehensive assessment of our strategic options, management and the Board of Directors believe the merger with Q32 Bio is in the best interest of our shareholders,” said Albert Seymour, president and CEO of Homology Medicines. “The Q32 Bio management team’s extensive track record, deep biopharmaceutical expertise and the potential of its clinical development pipeline provide a compelling opportunity to deliver meaningful treatments to patients with critical unmet needs.”
Q32 Bio has also entered into an agreement for a $42 million private placement that will support the merger. Proceeds from the proposed transactions will be used to advance the clinical development of Q32 Bio’s two wholly owned assets, bempikibart (ADX-914), for which Q32 Bio earlier today announced it regained all rights from Amgen, and ADX-097.
Bempikibart, Q32 Bio’s lead program, is a fully human anti-IL-7Rα antibody that re-regulates adaptive immune function by blocking signaling mediated by both IL-7 and TSLP and is currently being evaluated in two phase 2 trials, with one clinical trial evaluating the use in atopic dermatitis and one evaluating the use in alopecia areata. All data from the phase 2 trials remain blinded and Q32 Bio remains on track to report topline phase 2 results in the second half of 2024.
ADX-097 is based on a novel platform enabling tissue-targeted regulation of the complement system without long-term systemic blockade, a key differentiator from current complement therapeutics. Q32 Bio recently completed a first-in-human, phase 1 ascending dose clinical study of ADX-097 in healthy volunteers. Results from the phase 1 clinical trial demonstrated a favorable tolerability and immunogenicity profile across all single and multiple dose cohorts and weekly subcutaneous dosing met exposures for predicted complete complement inhibition in the tissue with no systemic inhibition.
“The proposed merger with Homology Medicines and concurrent private placement is expected to provide Q32 Bio with the capital to drive development of our autoimmune and inflammatory pipeline through multiple clinical milestones,” said Jodie Morrison, CEO of Q32 Bio. “This funding is expected to enable us to deliver two phase 2 readouts for bempikibart in the second half of 2024, proof-of-concept data for ADX-097, a tissue-targeted inhibitor of complement activation, by year-end 2024, and topline ADX-097 clinical results in the second half of 2025.”
Under the terms of the merger agreement, Homology Medicines will issue to pre-merger Q32 Bio stockholders shares of Homology Medicines common stock as merger consideration in exchange for the cancellation of shares of capital stock of Q32 Bio, and Q32 Bio will become a wholly owned subsidiary of Homology Medicines. Stockholders of Q32 Bio will receive newly issued shares of Homology Medicines common stock pursuant to a formula set forth in the merger agreement. Pre-merger Homology Medicines stockholders are expected to own approximately 25 percent of the combined company and pre-merger Q32 Bio stockholders are expected to own approximately 75 percent of the combined company. In connection with the closing of the proposed transactions, Homology Medicines stockholders will also be issued a contingent value right (CVR) representing the right to receive certain payments from proceeds received by the combined company, if any, related to dispositions of Homology Medicines’ pre-transaction legacy assets.
The merger agreement has been approved by the boards of directors of both companies.
Photo: Albert Seymour, president and CEO of Homology Medicines
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