US biopharmaceutical company Yumanity Therapeutics, Inc. sells its lead clinical-stage neurodegenerative product candidate YTX-7739 to Janssen Pharmaceutica NV, and also enters into a merger with Kineta, Inc.
YTX-7739, along with Yumanity’s discovery-stage neuroscience product candidates and targets are being sold to Janssen, part of the Janssen Pharmaceutical Companies of Johnson & Johnson, for $26 million in cash.
Yumanity said it plans to distribute any remaining available cash proceeds from the sale to Janssen to Yumanity shareholders with a one-time dividend, less any amounts withheld for outstanding obligations and net cash requirements associated with the proposed merger between Yumanity and Kineta.
Kineta will become a wholly owned subsidiary of Yumanity in an all-stock transaction, resulting in a combined publicly traded company renamed Kineta, Inc., which will focus on immuno-oncology and continue research collaboration in Yumanity course with Merck & Co. in amyotrophic lateral sclerosis and frontotemporal lobar dementia.
Upon completion of the proposed merger, current Kineta shareholders are expected to own approximately 85% of the combined company and current Yumanity shareholders are expected to own approximately 15% of the combined company.
The combined company plans to raise a concurrent private equity investment led by Growth & Value Development Inc.
“After evaluating Yumanity’s strategic alternatives, management and our Board of Directors believe that the proposed transactions are in the best interest of Yumanity shareholders,” said Richard Peters, President and CEO of Yumanity.
“We are excited that our lead clinical-stage neurology asset and our non-partner assets will continue to be developed and we are very excited about Kineta’s innovative oncology pipeline.
Kineta’s main asset is KVA12.1, a VISTA blocking immunotherapy to address the problem of immunosuppression in the tumor microenvironment. The company said it could be an effective immunotherapy for many types of cancer, including NSCLC (lung), colorectal cancer, renal cell carcinoma, head and neck, and ovarian.
Kineta is also developing immunotherapies to address issues of T cell depletion and immunologically silent tumors.
“The proposed merger with Yumanity is a unique opportunity for Kineta to build a leading public company focused on immuno-oncology with a diverse pipeline of novel treatments for cancer patients,” said Shawn Iadonato, CEO of Kineta. . “Kineta has demonstrated expertise in developing novel immunotherapies that will allow us to advance our core programs to multiple milestones over the next 18 months.
Iadonato will serve as CEO of the new company, which will be based in Seattle.
Both transactions are expected to close in the second half of 2022, subject to customary closing conditions, including Yumanity shareholder approval of both transactions.
In February, Yumanity announced a corporate restructuring and a 60% reduction in its workforce. A month earlier, the US Food and Drug Administration had partially suspended multidose clinical trials of YTX-7739, currently under development for the treatment of Parkinson’s disease.
The FDA did not stop all clinical programming and allowed Yumanity’s planned single-dose clinical trial to continue. The partial clinical hold suspends the initiation of multiple-dose clinical trials in the United States until questions from the FDA have been addressed.
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