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RegMed Investors (RMi) Research Note: Homology Medicines (FIXX) enters into merger agreement and financing with Q32 Bio Inc. in an all-stock transaction

November 16, 2023 10:05am

A weak public company combines to stay afloat closing -$0.30 or -34.27% to $0.57

Q32 Bio Inc., a clinical stage biotechnology company developing biologic therapeutics to restore immune homeostasis, and Homology Medicines (FIXX) have entered into a definitive merger agreement to combine the companies in an all-stock transaction. The combined company will focus on advancing Q32 Bio's wholly owned clinical development candidates for the treatment of autoimmune and inflammatory diseases.

Upon completion of the merger, the combined company will operate as Q32 Bio, headquartered in Waltham, Massachusetts, and is expected to trade under the Nasdaq ticker symbol "QTTB".

The Bottom Line:

In support of the merger agreement, Q32 Bio has entered into an agreement for a $42 million private placement with participation from existing and new investors including OrbiMed, Atlas Venture, Abingworth, Bristol Myers Squibb, Acorn Bioventures, Osage University Partners (OUP), CU Healthcare Innovation Fund, Sanofi Ventures, Agent Capital and other undisclosed investors.

The combined company will operate as Q32 Bio Inc., advancing the development of Q32 Bio's two clinical development candidates, bempikibart (ADX-914) in P2 for the treatment of atopic dermatitis (AD) and alopecia areata (AA), and ADX-097 entering P2 for the treatment of complement disorders--

Q32 Bio has re-acquired worldwide development and commercial rights to bempikibart, an anti-IL-7Rα antibody inhibiting IL-7 and TSLP-mediated signaling, and remains on-track to report multiple topline Phase 2 results in 2H'24 --

Concurrent $42 million private placement investment with new and existing investors supports clinical development through multiple milestones, including key Phase 2 readouts for bempikibart, initial ADX-097 proof-of-concept data by year-end 2024 and ADX-097 topline results in 2H'25 --

Combined company's cash balance expected to be approximately $115 million at close, providing cash runway to mid-2026--

35 companies, 1 interpreter!

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