Seattle-based Neoleukin Therapeutics Inc. on Tuesday closed its merger with New York City-based biotech company Neurogene Inc.
The combined company goes by Neurogene, and pre-merger Neurogene shareholders now own about 84% of the company, and pre-merger Neoleukin shareholders own about 16%. The Neurogene management team will lead the combined company.
“This transformative transaction provides us with a strong cash position," Neurogene founder and CEO Rachel McMinn said in a news release.
The merger allows Neurogene to trade on the Nasdaq, where Neoleukin traded before the merger closed. The combined company, which trades under the ticker NGNE, is focusing on Neurogene's pipeline of treatments for neurological diseases. Neurogene also announced Tuesday the closing of a $95 million private financing from a variety of investors, including Blackrock and Alexandria Venture Investments.
Investors in the $95 million round are included among the pre-merger shareholders that now own most of the combined company. Neurogene is choosing five board members at the combined company to Neoleukin's two. According to a filing with the Securities and Exchange Commission, Neoleukin is facing three lawsuits from shareholders challenging the merger and alleging the company made false and misleading statements.
The merger comes after recent struggles for Neoleukin, which was looking to develop new therapies but in November 2022 laid off 40% of its staff and discontinued its lead candidate, a protein therapeutic aimed at cancer immunotherapy. The company in March announced it was laying off about 70% of its staff and that then-CEO Jonathan Drachman was stepping down.
Neoleukin said in a release at the time it was exploring "strategic alternatives" such as a sale, merger or a divestiture of assets, among other options. The company's website no longer works.
Neoleukin was founded in 2018 and spun out of the University of Washington in 2019, and the company went public that same year through a merger with Aquinox Pharmaceuticals. In April, the company named Donna Cochener interim CEO. She had joined the company in March 2022 and was previously the general counsel.
Neurogene was founded in 2018, according to its LinkedIn page. The company is developing treatments for the severe neurological diseases Rett syndrome and Batten disease. Both treatments are going through clinical trials. According to Neurogene, the company has cash, cash equivalents and investments of about $200 million, which provides runway into the second half of 2026.
