- Yumanity Therapeutics, a Boston-based developer of brain drugs, announced Monday plans to offload its remaining research assets and enter into a reverse merger, effectively ending its run as an independent biotechnology company.
- Specifically, Yumanity intends to sell its most advanced experimental drug — which is being tested as a treatment for Parkinson's disease, among other conditions — as well as its unpartnered, discovery-stage product candidates to Johnson & Johnson's Janssen division for $26 million in cash.
- Alongside that transaction, Yumanity will combine with Kineta, a privately held drugmaker focused on cancer immunotherapy. Per deal terms, the merged company would operate under the Kineta name, with ownership respectively split about 85% and 15% between Kineta's and Yumanity's existing shareholders. Yumanity expects both deals to close in the back half of this year, provided they receive shareholder approval.
After nearly eight years, Yumanity's time as an independent company appears close to an end.
The biotech was established in late 2014 — the creation of Tony Coles, Susan Lindquist and Ken Rhodes, each well-known in the pharmaceutical industry for their respective expertise in corporate management, protein research and brain drug development. Yumanity sought to better understand neurodegenerative diseases and find potential treatments for them using an unorthodox tool: yeast.
That premise, along with the company's leadership, piqued interest from investors as well as larger drug firms. Biogen and Sanofi both contributed to Yumanity's Series A fundraising round in 2016. And several years later, in 2020, Merck & Co. agreed to license two of the biotech's drugs and participate in its Series C financing.
Shortly after the Merck deal, Yumanity came to the public markets through a reverse merger with the cystic fibrosis drugmaker Proteostasis Therapeutics.
Now, Yumanity finds itself on the other end of such a transaction, serving as a vehicle for Kineta to go public at a time when biotechs are having a tough time pricing initial public offerings.
The decision to merge with Kineta and sell most of its assets to Janssen follows a setback to Yumanity's most advanced drug. Early this year, the Food and Drug Administration placed a partial clinical hold on so-called multiple dosing studies of the drug, which is known as YTX-7739.
Less than a month later, the company disclosed that it was exploring strategic alternatives, including asset sales and a reverse merger. Yumanity also announced plans to eliminate about 60% of its workforce as part of a larger restructuring effort meant to conserve cash.
The company said Monday that, following the close of its asset sale, it will distribute any remaining available cash proceeds to Yumanity stockholders through a one-time dividend. The payout, though, would be net of any cash retained or required for the proposed merger with Kineta.
While most of Yumanity's drug programs are headed to Janssen, the new company will continue working with Merck to develop treatments for a type of dementia and for ALS, or amyotrophic lateral sclerosis. However, Kineta's main research focus will remain immuno-oncology. The company has programs in the earlier stages of drug development targeting the proteins CD24 and CD27, plus a more advanced one that it believes could effectively treat a variety of cancers, including lung, ovarian, and head and neck.
"The proposed merger with Yumanity is a unique opportunity for Kineta to build a leading public immuno-oncology focused company with a diversified pipeline of new treatments for cancer patients," said Shawn Iadonato, Kineta's CEO, in a statement.
Yumanity's share price was up more than 46% at market's open Monday, to trade at $2.08. Since completing its reverse merger with Proteostasis, the value of Yumanity's shares has fallen roughly 90%.