Seattle-based biotech Kineta is seeking a major boost for its drug development pipeline.
On Monday, the company announced plans to go public through a reverse merger with Yumanity Therapeutics (Nasdaq: YMTX), a Boston-based biotech focused on neurogenerative diseases. Kineta CEO Shawn Iadonato said the capital from going public will come at an important time for the company.
"We have a number of assets that are in late pre-clinical development, and we're looking to take one of our key assets, our lead asset, into clinical development later this year," Iadonato said. "In order to get better access to capital, we've been looking at ways to take the company public."
According to Craig Philips, president of Kineta, the company currently has a little under 30 total employees, all of whom are based in Seattle. The company is gaining five scientists from Yumanity.
Yumanity, which has seen its stock price struggle since going public in late 2020 through a separate reverse merger, ended last year with 40 employees, according to paperwork filed with the Securities and Exchange Commission. Philips said Kineta doesn't plan to hire much beyond the scientists it is gaining from Yumanity, who will remain in Boston.
Kineta, founded in 2008, is focused on immunotherapies to help cancer patients. Its lead candidate, KVA12.1, is an antibody that targets a receptor called VISTA. Iadonato said Kineta feels VISTA "is a key reason why many patients are unable to mount an effective immune response to their tumor," as well as why many cancer patients fail earlier during immunotherapy.
Iadonato said Kineta has also looked into special purpose acquisition company (SPAC) mergers, but the company didn't like the deals it saw. Kineta is headquartered in South Lake Union, and Philips said the company plans to keep its physical footprint as-is for now.
The reverse merger is expected to close in the second half of this year, after which the combined company will be called Kineta Inc., with Kineta stockholders owning roughly 85% of the company and Yumanity stockholders owning roughly 15%.
Yumanity is selling its lead candidate, a treatment aimed at Parkinson's disease called YTX-7739, as well as other neuroscience candidates to Johnson & Johnson for $26 million. Yumanity's progress on amyotrophic lateral sclerosis (ALS) and frontotemporal lobar dementia, which Yumanity was doing with Merck & Co., will continue with Kineta.
"I think what's happened to Yumanity, you're seeing that with a lot of companies, especially with a single-asset company that has difficulty with that asset in the clinic. It's very hard for them to pivot anywhere," Iadonato said. "We hope that Kineta's pipeline has enough diversity in it that if one of our assets is not successful, then we have enough opportunity remaining in the pipeline."
