Full Press Release Details
NEUROGENE AND NEOLEUKIN ANNOUNCE DEFINITIVE MERGER AGREEMENT
New York, NY and Seattle, WA July 18, 2023 Neurogene Inc., a clinical-stage company founded to bring life-changing genetic medicines
to patients and families affected by rare neurological diseases, and Neoleukin Therapeutics, Inc. (NASDAQ:NLTX) today announced that they have entered into a definitive merger agreement to combine the companies in an
all-stock transaction. The combined company will focus on advancing Neurogene s pipeline of differentiated genetic medicines, including NGN-401, a clinical-stage
product for Rett syndrome, which uses novel gene regulation technology for a potential best-in-class profile. Upon completion of the merger, which is subject to approval by Neurogene and Neoleukin stockholders, the combined company is expected to
operate under the name Neurogene Inc. and trade on the Nasdaq Capital Market under the ticker symbol NGNE .
In connection with the merger,
Neurogene announced an oversubscribed $95 million private financing led by new and existing healthcare-dedicated specialist and mutual fund institutional investors, including participation from Great Point Partners, EcoR1 Capital, Redmile
Group, Samsara BioCapital, Janus Henderson Investors, funds and accounts managed by Blackrock, Casdin Capital, Avidity Partners, Arrowmark Partners, Cormorant Asset Management, Alexandria Venture Investments and a healthcare investment fund.
With the cash from both companies at closing and the proceeds of the concurrent private financing, the combined company is expected to have approximately
$200 million of cash or cash equivalents immediately following the closing. The cash resources are intended to be used to advance Neurogene s pipeline through multiple clinical milestones and are expected to fund operations into the second
half of 2026. The merger and concurrent private financing are expected to close in the fourth quarter of 2023, subject to stockholder approval both companies, the effectiveness of a registration statement to be filed with the U.S. Securities and
Exchange Commission to register the securities to be issued in connection with the merger and concurrent financing, and the satisfaction of customary closing conditions.
We are excited to announce our planned merger with Neoleukin, which we believe is a transformative step forward in our mission to bring life-changing
genetic medicines to the patients and families impacted by devastating neurological diseases, said Rachel McMinn, Ph.D., Founder and Chief Executive Officer of Neurogene. This transaction is expected to bolster our ability to progress
our differentiated pipeline, including our clinical-stage program in Rett syndrome which contains our novel, proprietary EXACT technology. We believe EXACT represents a meaningful technological advance for the gene therapy field, allowing us to
develop therapeutic product candidates for complex diseases with attractive market opportunities not addressable with conventional gene therapy. This capital will also support our internal manufacturing capabilities, which we expect will continue to
provide significant financial and strategic flexibility. With cash on hand at the close of this transaction expected to fund operations into the second half of 2026, we believe we are well positioned to successfully execute beyond multiple
anticipated clinical inflection points for both Rett syndrome and Batten disease, and advance our discovery stage pipeline.
Neurogene reflects the continued commitment of our management team and Board of Directors to deliver value to stockholders and, importantly, meaningfully improve patients lives, said Donna Cochener, Interim Chief Executive Officer and
General Counsel of Neoleukin. Neurogene has an innovative genetic medicines portfolio, in-house product design and manufacturing capabilities, an impressive management team, and will be well positioned
to deliver multiple data readouts in the next 18 to 24 months. We are grateful to our current and former employees who contributed to Neoleukin s efforts and look forward to the combined company s continued progress and success.
About Neurogene s Portfolio and EXACT Gene Regulation Platform
Neurogene s internally manufactured portfolio of purposefully designed therapies aims to address several key limitations of conventional gene therapies,
including variable gene expression, safety limitations, and inefficient gene delivery.
The company s novel and proprietary Expression Attenuation
via Construct Tuning (EXACT) gene regulation platform technology is a self-contained transgene regulation platform that can be tuned to deliver a desired level of transgene expression within a narrow range, potentially avoiding transgene related
toxicities associated with conventional gene therapy. EXACT is compatible with viral and non-viral delivery platforms.
Neurogene s clinical-stage portfolio includes:
NGN-401: NGN-401 is an investigational AAV9 gene therapy being developed as a one-time treatment for Rett syndrome. It
is the first candidate to deliver the full-length human MECP2 gene under the control of Neurogene s EXACT technology. Embedding EXACT technology into NGN-401 is an important advancement in gene therapy
for Rett syndrome, specifically because the disorder requires a treatment approach that enables targeted levels of MECP2 transgene expression without causing toxic effects associated with conventional gene therapy. Rett syndrome is a debilitating, X-linked, neurodevelopmental disorder with significant unmet medical need, and one of the most common genetic causes of developmental and intellectual impairment in females.
The robust preclinical data package for NGN-401 provides evidence of a potentially compelling efficacy and safety
profile in Rett syndrome. The company s Investigational New Drug (IND) application was cleared by the U.S. Food and Drug Administration in January 2023. In the U.S., NGN-401 has received Orphan Drug Designation, Rare Pediatric Disease
Designation, and Fast Track designation. Neurogene plans to commence dosing in a Phase 1/2 trial (NCT05898620) designed to assess the safety, tolerability, and efficacy of a single dose of NGN-401 in
female pediatric patients with Rett syndrome in the second half of 2023, with preliminary data expected in the fourth quarter of 2024 from the first cohort of patients, and additional expected data in the second half of 2025 from an expanded set of
NGN-101: NGN-101 is being developed as a one-time treatment for both ocular and neurological manifestations of CLN5 Batten disease using AAV9 to deliver the gene encoding CLN5, which is deficient in children with the disease. Batten disease is a family of
rare neurodegenerative diseases caused by pathogenic changes in one of a series of genes that results in the accumulation of toxic deposits across multiple organ systems. CLN5 Batten disease is a rare, pediatric-onset and rapidly progressive
condition caused by a pathogenic mutation in the CLN5 gene, leading to loss of function. It is characterized by loss of vision, seizures, and progressive decline in intellectual and motor capabilities beginning in childhood leading to substantial
impairments and early mortality.
In preclinical studies, NGN-101 has demonstrated the potential to slow or halt
the key features of disease progression, including associated vision and motor declines. NGN-101 has received Orphan Drug Designation by U.S. and European regulatory agencies and is currently being evaluated
in a Phase 1/2 clinical trial in children with CLN5 Batten disease (NCT05228145). Preliminary data is expected in the second half of 2024.
In addition to these two clinical-stage programs, Neurogene is also advancing a discovery-stage candidate
that will expand its pipeline into an additional area of high unmet need. Neurogene expects to initiate a clinical study of this candidate in 2025.
About the Proposed Merger
Under the terms of the merger
agreement, Neoleukin will issue to pre-merger Neurogene stockholders shares of Neoleukin common stock as merger consideration in exchange for the cancellation of shares of capital stock of Neurogene, and
Neurogene will become a wholly owned subsidiary of Neoleukin. Pre-merger Neoleukin stockholders are expected to own approximately 16% of the combined company and
pre-merger Neurogene stockholders (including those purchasing Neurogene shares in the concurrent private financing discussed above) are expected to own approximately 84% of the combined company. The percentage
of the combined company that pre-merger Neurogene stockholders and pre-merger Neoleukin stockholders will own as of the close of the proposed transaction is subject to
certain adjustments as described in the merger agreement, including the amount of Neoleukin s net cash at closing. In connection with the closing of the proposed transactions, Neoleukin stockholders will also be issued contingent value rights
representing the right to receive certain payments from proceeds received by the combined company, if any, related to Neoleukin s pre-transaction legacy assets or from savings realized by the combined
company, if any, related to the reduction of Neoleukin s legacy lease obligations.
Upon closing of the proposed transaction, Neoleukin Therapeutics,
Inc., will be renamed Neurogene Inc. The combined company will be led by Rachel McMinn, Ph.D., Founder and Chief Executive Officer of Neurogene, and other members of the Neurogene management team. The combined company s Board of Directors will
be comprised of five board members selected by Neurogene and two board members selected by Neoleukin. The transaction has been unanimously approved by the Board of Directors of each company and is expected to close in the fourth quarter of 2023,
subject to customary closing conditions, including the approval of the transaction by the stockholders of each company.
TD Cowen is serving as exclusive
financial advisor to Neurogene. TD Cowen and Stifel are serving as lead placement agents on Neurogene s planned concurrent private financing. Stifel is also serving as placement agent for Neurogene s planned concurrent private financing.
Gibson Dunn & Crutcher LLP is serving as legal counsel to Neurogene and Cooley LLP is serving as legal counsel to the placement agents. Leerink Partners is serving as the exclusive financial advisor to Neoleukin. Fenwick & West LLP
is serving as legal counsel to Neoleukin.
Conference Call Information
Neurogene and Neoleukin will host a conference call today, July 18, 2023, at 8:30 am E.T. to discuss the proposed merger. The live webcast can be accessed
by visiting https://edge.media-server.com/mmc/p/q3vx354g. To access the event via phone, please register to receive a unique dial-in and PIN number using the following link: https://register.vevent.com/register/BI3014e8ea8bec4d9cbdf9a68a0b5c78ec. A
replay of the webcast will be available for a limited time following the event on the Events & Presentations section of Neoleukin s website at https://investor.neoleukin.com/events and on the News section of Neurogene s website at
The mission of Neurogene is to turn devastating neurological diseases into treatable conditions to improve the lives of patients and families impacted by these
rare diseases. Neurogene is developing novel approaches and treatments to address the limitations of conventional gene therapy in central nervous system disorders. This includes selecting a delivery approach to maximize distribution to target
tissues and by designing products to maximize potency and purity for an optimized efficacy and safety profile. The company s novel and proprietary EXACT gene regulation platform technology allows for the delivery of therapeutic levels while
limiting transgene toxicity associated with conventional gene therapy. For more information, visit www.neurogene.com.
Neoleukin is a biopharmaceutical company creating next generation immunotherapies for cancer, inflammation and autoimmunity using de novo protein design
technology. Neoleukin uses sophisticated computational methods to design proteins that demonstrate specific pharmaceutical properties that provide potentially superior therapeutic benefit over native proteins. For more information, please visit the
Neoleukin website: www.neoleukin.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended (Securities Act)) concerning Neurogene, Neoleukin, the proposed transactions and other matters. These statements may discuss goals, intentions and expectations as to future plans,
trends, events, results of operations or financial condition, or otherwise, based on current expectations and beliefs of the management of Neoleukin and Neurogene, as well as assumptions made by, and information currently available to, management of
Neoleukin and Neurogene. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as may, will, should,
would, expect, anticipate, plan, likely, believe, estimate, project, intend, and other similar expressions or the negative or plural of these
words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Statements that are not historical facts are forward-looking statements.
Forward-looking statements in this communication include, but are not limited to, expectations regarding the proposed merger and financing transactions; the potential benefits and results of such transactions; the sufficiency of the combined
company s capital resources; the combined company s cash runway; the expected timing of the closing of the proposed transactions; statements regarding the potential and timing of, and expectations regarding, Neurogene s programs,
including NGN-101, NGN-401 and its research stage opportunities; statements by Neoleukin s Interim Chief Executive Officer and General Counsel; and statements by
Neurogene s Founder and Chief Executive Officer. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ
materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: the limited operating history of each company; the significant net losses incurred since inception of each company; the
ability to raise additional capital to finance operations; the ability to advance product candidates through preclinical and clinical development; the ability to obtain regulatory approval for, and ultimately commercialize, Neurogene s product
candidates; the outcome of preclinical testing and early clinical trials for Neurogene s product candidates, including the ability of those trials to satisfy relevant governmental or regulatory requirements; Neurogene s limited experience
in designing clinical trials and lack of experience in conducting clinical trials; the ability to identify and pivot to other programs, product candidates, or indications that may be more profitable or successful than Neurogene s current
product candidates; expectations regarding the market and potential for Neurogene s current product candidates; the substantial competition Neurogene faces in discovering, developing, or commercializing products; the negative impacts of the COVID-19 pandemic on operations, including ongoing and planned clinical trials and ongoing
and planned preclinical studies; the ability to attract, hire, and retain skilled executive officers and employees; the ability of Neoleukin or Neurogene to protect their respective intellectual
property and proprietary technologies; reliance on third parties, contract manufacturers, and contract research organizations; the risk that the conditions to the closing of the proposed transactions are not satisfied, including the failure to
obtain stockholder approval for the proposed transactions from both Neoleukin and Neurogene s stockholders or to complete the transactions in a timely manner or at all; uncertainties as to the timing of the consummation of the proposed
transactions and the ability of each of the parties to consummate the proposed transactions; risks related to Neoleukin s continued listing on the Nasdaq Capital Market until closing of the proposed transactions; risks related to
Neoleukin s and Neurogene s ability to correctly estimate their respective operating expenses and expenses associated with the proposed transactions, as well as uncertainties regarding the impact any delay in the closing would have on the
anticipated cash resources of the combined company upon closing and other events and unanticipated spending and costs that could reduce the combined company s cash resources; the occurrence of any event, change or other circumstance or
condition that could give rise to the termination of the merger agreement or the financing transaction; competitive responses to the proposed transactions; unexpected costs, charges or expenses resulting from the proposed transactions; the outcome
of any legal proceedings that may be instituted against Neoleukin, Neurogene or any of their respective directors or officers related to the merger, the financing transaction, or the proposed transactions contemplated thereby; potential adverse
reactions of changes to business relationships resulting from the announcement or completion of the proposed transactions; the effect of the announcement or pendency of the transactions on Neoleukin s or Neurogene s business relationships,
operating results and business generally; the expected trading of the combined company s stock on Nasdaq Capital Market under the ticker symbol NGNE and the combined company s ability to remain listed following the proposed