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Aug 07, 2023
Cambridge, MA - Korro Bio, a pioneering developer of RNA-edited therapies, is set to embark on a transformative journey by pursuing a reverse merger with beleaguered Frequency Therapeutics, marking a strategic shift in its quest to rewrite the future of medicine. The move comes as Korro seeks substantial funding to advance its cutting-edge RNA-edited oligonucleotide therapy, designed to combat alpha-1 antitrypsin deficiency (AATD) in the liver, through early clinical trials.
To navigate these financial challenges, Korro has opted for a reverse merger with Frequency Therapeutics, a troubled biotech company, in an all-stock transaction initiated in mid-July. The merged entity, to be named Korro Bio, is currently awaiting approval to trade its shares publicly on the Nasdaq under the symbol KRRO. In this merger, Korro will become a wholly-owned subsidiary of Frequency, now trading as FREQ on the Nasdaq Global Select Market.
The infusion of capital, which includes a $117-million financing commitment from a syndicate of top-tier investors set to close before the merger is finalized, will provide Korro Bio with a pro-forma cash balance of approximately $170 million. This financial cushion will enable Korro to progress through key milestones and remain funded into 2026.
Vineet Agarwal, Korro’s Chief Financial Officer, expressed the company's goals, stating, "Our first goal was to capitalize this company. The second goal was to be public by the second half early next year. As a public company, I think there is more optionality for us in progressing the pipeline and raising more capital subsequently. So, this transaction is just a step in the process to get there."
Korro had initially considered an initial public offering (IPO) before opting for a reverse merger, a quicker route to going public. This approach allows private companies to acquire larger, publicly listed companies, bypassing the complex steps associated with traditional IPOs.
Korro Bio's primary focus is on RNA editing-based treatments using its proprietary platform, OPERA™ (Oligonucleotide Promoted Editing of RNA). This platform enables the precise editing of RNA, offering the potential to treat a wide range of diseases with a transient, titratable, and specific regimen, avoiding the risks associated with permanent DNA-based genome editing.
Korro's lead therapy targets alpha-1 antitrypsin deficiency, a genetic disorder with severe lung and liver implications affecting around 100,000 patients in the United States. The company's collaboration with Genevant Sciences utilizes an established intravenous lipid nanoparticle (LNP)-based delivery system to repair inherited mutations and restore the production of normal functional A1AT protein in the liver.
With the merger set to close in the fourth quarter, subject to customary closing conditions and approval by Frequency Therapeutics' stockholders, Korro Bio is poised to ride the wave of RNA editing therapies, joining the ranks of companies advancing this groundbreaking field of medicine.
Korro Bio's CEO, Ram Aiyar, Ph.D., emphasized the importance of being well-capitalized for the development of RNA editing therapies. He stated, "OPERA as a platform, and RNA editing as a modality is going to revolutionize how we develop medicines for certain indications. To really provide the best opportunity for patients and ensuring that we can move a pipeline of programs, it was imperative for us to raise the capital."
The reverse merger will provide Frequency Therapeutics with a path forward after a challenging period marked by the failure of its lead candidate, FX-322, in a Phase IIb trial. Frequency Therapeutics' CEO, David L. Lucchino, will join the board of the combined company.
As Korro Bio and Frequency Therapeutics unite their resources and expertise, they are poised to accelerate the development of innovative RNA-edited therapies, potentially changing the landscape of medical treatment for a range of diseases.