Synlogic goes public through merger with failed Mirna
- Privately held Synlogic Inc. is going public, announcing on Tuesday a reverse merger with a Mirna Therapeutics subsidiary that creates a pre-clinical company with about $82 million in cash at its disposal.
- Synlogic investors will hold onto roughly 83% of the merged business while Mirna shareholders control the rest. The new company's focus will be advancing the bigger owner's two most advanced candidates — one targeting urea cycle disorders (UCDs) and hepatic encephalopathy (HE), the other targeting phenylketonuria (PKU) — into Phase 1 testing.
- Also on Tuesday, Synlogic revealed it raked it $42 Million in Series C financing from a medley of investors, including Aju IB Investment, Atlas Ventures and New Enterprise Associates. "This merger and our recently completed Series C financing are projected to provide the capital to progress our two lead metabolic disease programs through patient proof-of-concept studies as well as advance the development of our earlier product candidates," the company's CEO Carlos Gutierrez-Ramos said in a statement.
The deal comes at an opportune time for microRNA developer Mirna, which has been mulling what to do with itself since dismantling its lead cancer therapy program last fall. The company made that decision following a fizzled Phase 1 trial in which three patients taking the investigational MRX34 died due to serious immune-related side effects.
With its most advanced candidate kaput, Mirna started shopping around for strategic alternatives. That's where Synlogic stepped in.
The Cambridge, Mass.-based drugmaker, which focuses on synthetically engineering bacteria to help regulate the body's digestive system, needed more money to push its UCD and HE medication, SYNB1020, and PKU treatment, SYNB1618, into human testing.
A reverse merger, in which a private company goes public through M&A, is a means to that end because it gives Synlogic access to more funding opportunities without having to go through the arduous and expensive task of conducting an initial public offering. While the $17 million in cash and cash equivalents Mirna reported having as of March 31 could help fund clinical development, the promise of a NASDAQ stock ticker was the real bounty Synlogic sought.
The companies expect to complete their deal sometime in the third quarter. The merged business will still be called Synlogic, and Gutierrez-Ramos will stay on as its chief. The new Synlogic will have a seven-member board of directors, with two coming from Mirna's current board.
Synlogic will also stay trading on the NASDAQ, though its ticker symbol is yet to be determined.
As for its pipeline, the new company anticipates starting a Phase 1 study of SYNB1020 no later than mid-2017.
Synlogic's work is part of the growing field of microbiome research, which analyzes the vast array and dynamics of microbes housed in the stomach and digestive system. The space has grabbed the interest of big pharma and small biotechs alike. In November, for example, Bristol-Myers Squibb paid $15 million upfront to Enterome as part of a partnership aimed at finding immuno-oncology treatments in the microbiome.
- Synlogic Statement
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