Magenta Merges with Dianthus to Focus on Complement Inhibitors

Rare Daily Staff

Magenta Therapeutics is merging with privately held Dianthus Therapeutics in an all-stock transaction to focus on advancing Dianthus’ pipeline of next generation complement inhibitors.

The combined company is expected to operate under the name Dianthus Therapeutics and trade on the Nasdaq under the ticker symbol “DNTH”.

In support of the merger, Dianthus has secured commitments for a $70 million private investment in its common stock and pre-funded warrants from a syndicate of healthcare investors that is expected to close immediately prior to completion of the merger. With the cash expected from both companies at closing and the proceeds of the concurrent private financing, the combined company is expected to have approximately $180 million of cash or cash equivalents immediately post-closing. The cash resources are intended to be used to advance Dianthus’ pipeline through multiple clinical data catalysts and is expected to fund operations into mid-2026. The merger and related financing are expected to close in the third quarter of 2023.

The cash proceeds are expected to fund lead program DNTH103 through multiple clinical data catalysts including a phase 1 trial in healthy volunteers, and phase 2 trials in generalized myasthenia gravis and other indications.

“Gaining access to the public capital markets can enhance our financial strength and fuel our growth strategy, enabling us to unlock the full potential of our pipeline, including our plans to address multiple autoimmune disorders with our clinical-stage active C1s inhibitor, DNTH103.” said Marino Garcia, president and CEO of Dianthus Therapeutics.

DNTH103 is an investigational long-acting classical complement pathway inhibitor designed as a less frequent and convenient subcutaneous injection with the potential to treat people living with severe autoimmune diseases. DNTH103 clinical milestones include top-line phase 1 data aiming to confirm potent classical pathway inhibition and favorable, extended pharmacokinetics expected by the end of 2023, initiation of a phase 2 trial in generalized myasthenia gravis expected in the first quarter of 2024, followed by two additional planned phase 2 trial initiations in other neuro indications, and planned initiation of an open label proof of efficacy trial in Cold Agglutinin disease with patient data anticipated in the second half of 2024.

In February 2023 Magenta said it had halted further development of its programs focused on conditioning agents in preparation for stem cell transplantation, and began exploring strategic alternatives.

Magenta had previously found that its antibody drug conjugate MGTA-117 precisely targeted only hematopoietic stem and progenitor cells, spared immune cells, and showed high selectivity, potent efficacy, wide safety margins and broad tolerability in non-human primate models.

“After a thorough exploration of our strategic alternatives, management and our Board of Directors believe the transaction with Dianthus Therapeutics will culminate in a successful outcome for our stockholders,” said Steve Mahoney, president, chief financial and operating officer of Magenta. “Dianthus has made rapid progress in developing and advancing DNTH103 into the clinic where it has the potential to be a transformative classical pathway inhibitor for severe autoimmune diseases.”

Pre-merger Dianthus stockholders are expected to own approximately 78.7 percent of the combined company and pre-merger Magenta stockholders are expected to own approximately 21.3 percent of the combined company. The percentage of the combined company that Magenta’s stockholders will own as of the close of the transaction is subject to adjustment based on the amount of Magenta’s net cash at the closing date. Immediately prior to the closing of the proposed merger, Magenta stockholders will be issued contingent value rights representing the right to receive certain payments from proceeds received by the combined company, if any, related to pre-transaction legacy assets.

Following the merger, the combined company will be led by Marino Garcia, the current CEO and president of Dianthus Therapeutics, and the current members of the Dianthus management team.

Photo: Marino Garcia, CEO and president of Dianthus Therapeutics