Eliem Therapeutics Inc. (Nasdaq: ELYM) is acquiring Tenet Medicines Inc., a biotech company headquartered in Scotch Plains, New Jersey.
Eliem, which had a 5,000-square-foot headquarters in Bellevue before subleasing the space in July, pursues the Tenet acquisition after halting programs in its original pipeline.
In February 2023, Eliem paused development on ETX-155, its drug candidate aimed at major depressive disorder and focal onset seizures. Last July, the company paused the development of Kv7, which was aimed at pain, epilepsy and depression.
With the Tenet deal, announced Thursday, Eliem said it is now focusing on Tenet's candidate TNT119, which is aimed at a common type of lupus, a kidney disease and immune thrombocytopenia, a disorder that can lead to bruising and bleeding.
“We believe TNT119 represents a promising clinical asset across multiple autoimmune diseases targeting markets where there is a need for improved treatment options," Eliem Executive Chairman Andrew Levin said in a news release.
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The companies expect the deal to close in the middle of this year, along with a private placement that will raise $120 million for Eliem, which expects the funding to close concurrently with the acquisition. A private placement allows companies to raise money by selling shares to select investors, but it decreases a company's ownership of its stock. Once the acquisition closes, Eliem and Tenet expect to have cash and cash equivalents of about $210 million, which should fund the company into 2027.
Eliem didn't respond to questions Thursday about the future of the companies' respective workforces. Eliem had nine full-time and two part-time employees at the end of last year, according to a filing with the Securities and Exchange Commission.
The financial terms of the deal were not disclosed in the news release.
Investors in the private placement include RA Capital Management, Deep Track Capital, Boxer Capital, Janus Henderson Investors, Pontifax and Samsara Biocapital.
Eliem, founded in 2018, had been focused on the central and peripheral nervous system. The company raised rounds of $80 million and $60 million in 2021 before going public in August of that year.
In February of last year, however, Eliem announced layoffs to about 55% of its staff, and that Bob Azelby, the company's CEO for more than two years, was departing. Levin, also a company co-founder, assumed day-to-day leadership of Eliem.
Tenet, meanwhile, was founded last year. The company is focused on inflammatory diseases driven by autoimmune disorders.
Tenet and Eliem expect to start Phase 2 trials for TNT119 in the second half of this year.
