Magenta Therapeutics has agreed to merge with Dianthus Therapeutics in an all-stock deal that gives the privately held maker of experimental immune drugs an entry to public markets.
The deal, announced Wednesday, marks a quiet end for Magenta after a difficult two years that saw its share price steady decline. In January, it halted its leading clinical trial after a participant died following treatment.
The combined company will use Dianthus’ name and trade on the Nasdaq stock exchange under the ticker symbol “DNTH.” The new company will focus its work on Dianthus’ experimental drugs that block activation of the complement system, which is part of the body's innate immune response.
Its lead experimental antibody is meant to be as effective but require less frequent dosing than approved complement-blocking intravenous drugs. Dianthus expects to complete a Phase 1 trial of the drug by the end of this year. A Phase 2 trial planned to begin in early 2024 will test it in people with generalized myasthenia gravis, a rare condition in which the immune system attacks nerves and muscles.
There are also plans for two mid-stage trials of the drug for neurological indications as well as in an open-label trial for a rare condition called cold agglutinin disease in which the immune system mistakenly tags red blood cells for destruction.
Dianthus and Magenta expect the reverse merger to be completed in the third quarter, with the new company led by Dianthus’ CEO Marino Garcia. On closing, the company would have around $180 million in cash or equivalents, including $70 million in new private money. Dianthus stockholders will own about 79% of the combined company, while Magenta’s investors will hold around 21%.
Launched in 2016, Magenta was working to develop better ways to prepare patients for stem cell transplants or gene therapies. After the patient death halted its lead clinical trial, it began a strategic review and laid off most of its employees.