Under the merger announced Thursday, Tourmaline shareholders will own nearly 80% of the new company, which will retain its name and continue to focus on developing its anti-IL 6 antibody.
Pictured: Talaris staff in front of Nasdaq sign/Courtesy of Talaris
Thursday, biotech companies Talaris Therapeutics and Tourmaline Bio announced a reverse merger, with the new company operating under the Tourmaline name and focusing on the development of its anti-IL 6 antibody.
The merger between formerly private Tourmaline and public Talaris provides a basis for Tourmaline to bypass the need for an initial public offering. The new company will be listed on the Nasdaq under the ticker symbol TRML.
Under the all-stock deal, Talaris stockholders are expected to receive approximately $3.43 per Talaris share, including a cash dividend of up to approximately $64.8 million and approximately 21.3% of the combined company.
The boards of directors of both companies unanimously approved the merger, which is expected to close by the end of 2023, and the current members of Tourmaline’s leadership team will continue to lead the new company.
The move comes on the heels of troubles for Talaris. Earlier this year, the company cut a third of its staff and dropped two trials of its lead drug candidate, FCR001, in kidney transplant recipients. One of the dropped trials had been temporarily paused after a patient death in 2022 caused by acute graft-vs-host disease, though a data monitoring committee cleared the company to continue the trial two days later.
Tourmaline plans to develop its lead program, TOUR006—an anti-IL 6 antibody—to treat thyroid eye disease (TED) and atherosclerotic cardiovascular disease (ASCVD) as its lead and secondary indications.
TED, also known as Graves’ ophthalmology, is an autoimmune disease characterized by inflammation and eye disfigurement that can be sight-threatening. It presents a viable target for TOUR006, as off-label use of anti-IL 6 pathway inhibitors is supported in medical literature to reduce inflammation, eye-bulging and other key indicators such as pathogenic autoantibodies, according to Tourmaline.
The antibody exhibits best-in-class properties, including a high binding affinity to interleukin 6, which can act as both an inflammatory cytokine and an anti-inflammatory myokine while having a long half-life, according to Tourmaline.
TOUR006 is a “promising clinical asset with near-term, value-creating milestone opportunities,” Talaris interim CEO Mary Kay Fenton said in the merger announcement.
Tourmaline has been developing the antibody with hopes of applicability for diseases characterized by inflammation and autoantibodies. These are diseases “where IL-6 pathway inhibitors have been underexplored despite compelling signals of clinical benefit,” the company stated.
Phase II research in three separate clinical trials is on the immediate horizon for TOUR006.
The company plans to launch Phase IIb trials of TOUR006 in TED by the end of Q3 2023. Next year, Tourmaline anticipates Phase II trials of TOUR006 in ASCVD, a condition where the arteries narrow, restricting blood flow to the organs and limbs. Two decades of research have suggested that IL-6 may be a promising target to treat the disease, which continues to kill nearly 20 million people per year despite the availability of oral treatments.
At transaction close, the new company is expected to have $210 million in cash, providing a strong balance sheet to support the next stages of research.
Connor Lynch is a freelance writer based in Ottawa, Canada. Reach him at lynchjourno@gmail.com.
