Reneo Pharmaceuticals and OnKure Announce Proposed Merger
Reneo Pharmaceuticals, Inc. (Nasdaq: RPHM) and OnKure, Inc., a
privately-held, clinical-stage biopharmaceutical company focused on
the development of novel precision medicines in oncology, 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 OnKure’s pipeline candidates
targeting oncogenic mutations in phosphoinositide 3-kinase alpha
(PI3Kα), including its lead program OKI-219, which is currently in
a Phase 1 clinical trial for the treatment of solid tumors. Upon
completion of the transaction, the combined company is expected to
operate under the name OnKure Therapeutics, Inc., and trade on the
Nasdaq Global Market under the ticker symbol “OKUR”.
In connection with the transaction, Reneo Pharmaceuticals has
entered into a subscription agreement for a $65 million private
investment in public equity (PIPE) financing expected to close
concurrently with the closing of the merger, with a group of
institutional investors, including Acorn Bioventures, Cormorant
Asset Management, Deep Track Capital, Perceptive Advisors, Samsara
BioCapital, Surveyor Capital (a Citadel company), and Vestal Point
Capital. The transactions are subject to stockholder approval by
both companies, the effectiveness of a registration statement to be
filed with the U.S. Securities and Exchange Commission, a condition
that Reneo Pharmaceuticals have at least $55 million in net cash at
the closing (excluding proceeds from the concurrent PIPE
financing), the continued listing of the combined company on
Nasdaq, and satisfaction of other customary closing conditions.
Including proceeds from the concurrent PIPE financing, the
combined company is expected to have approximately $120 million of
cash, cash equivalents, and short-term investments at closing. The
merger and concurrent PIPE financing are expected to close in
2024.
In February 2024, OnKure initiated a first-in-human clinical
trial to evaluate OKI-219, a mutant-selective PI3KαH1047R
inhibitor. The PIKture-01 trial is a Phase 1 dose-escalation trial
designed to evaluate the safety, tolerability, pharmacokinetics,
pharmacodynamics, and efficacy of OKI-219 as a monotherapy in
patients with advanced solid tumors and in combination with
endocrine therapy or HER-2 targeted therapy in patients with
advanced breast cancer.
“Following a thorough evaluation of strategic alternatives, the
Reneo board of directors and management team believe that this
anticipated transaction represents a compelling opportunity to
deliver shareholder value as the OnKure team advances their PI3Kα
inhibitors,” said Mike Grey, Executive Chairman and founder of
Reneo Pharmaceuticals. “OnKure has an experienced team of drug
developers, and we are excited about the potential for OKI-219 to
become a meaningful treatment option for patients suffering from
breast cancer.”
“We are pleased to announce our proposed merger with Reneo
Pharmaceuticals, allowing us to create a publicly traded company
focused on advancing OnKure’s lead, mutant-specific programs
targeting PI3Kα in breast cancer. This opportunity comes at an
important time for OnKure as we recently initiated our PIKture-01
trial of OKI-219 and expect early clinical data in the fourth
quarter of this year,” said Nicholas Saccomano, President and Chief
Executive Officer of OnKure.
About PI3Kα and OKI-219
PI3Kα is the most frequently mutated oncogene in cancers, and
PI3KαH1047R is the most common mutation in this gene, being found
in 15% of breast cancer and 4% of cancers overall. While novel
drugs targeting PI3Kα have been approved, the lack of mutant
selectivity of these therapeutics drives considerable on-target
toxicity by inhibiting the normal version of this protein in
various tissues. To address this challenge, OnKure is discovering
and developing a portfolio of highly mutant-selective PI3Kα
inhibitors with the goal of improving efficacy and safety with
molecules that fully inhibit the mutant oncogene while sparing the
wild-type enzyme in normal tissues. OKI-219 is a potential
best-in-class, orally bioavailable, highly selective inhibitor of
PI3KαH1047R with approximately 80-fold selectivity for the mutated
form of the enzyme compared to wild-type. OnKure believes that the
wild-type-sparing properties of OKI-219 should significantly
improve the activity and safety relative to currently approved
agents. OKI-219 is currently in Phase 1 of clinical development in
solid tumor patients with PI3KαH1047R mutations, including breast
cancer.
About the Proposed Merger
Pre-merger Reneo stockholders are expected to own approximately
31% of the combined company, and pre-merger OnKure stockholders are
expected to own approximately 69% of the combined company, upon the
closing of the merger, exclusive of the PIPE financing. The
percentage of the combined company that each company’s former
stockholders are expected to own may be adjusted based on Reneo’s
net cash at closing.
The transaction has been unanimously approved by the board of
directors of both companies and is expected to close in 2024,
subject to customary closing conditions, including approval by the
stockholders of each company.
Management and Organization
Following the merger, the combined company will be led by
Nicholas Saccomano, Ph.D., President and Chief Executive Officer of
OnKure, and other members of the OnKure management team. Reneo
Pharmaceuticals will be renamed “OnKure Therapeutics, Inc.” and the
corporate headquarters will be located in Boulder, CO. The merger
agreement provides that the board of directors of the combined
company will be composed of eight members, including six board
members chosen by OnKure and two members from the legacy Reneo
board.
Advisors
Leerink Partners is acting as exclusive financial advisor to
Reneo for the transaction. Jones Day and Cooley LLP are serving as
legal counsel for Reneo. Leerink Partners, Evercore ISI and LifeSci
Capital are serving as the placement agents for the PIPE financing.
Covington & Burling LLP is serving as legal counsel to the
placement agents in connection with the PIPE financing. Oppenheimer
& Co. is serving as capital markets advisor to OnKure. Wilson
Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to
OnKure.
About Reneo Pharmaceuticals
Reneo is a pharmaceutical company historically focused on the
development and commercialization of therapies for patients with
rare genetic mitochondrial diseases, which are often associated
with the inability of mitochondria to produce adenosine
triphosphate.
About OnKure
OnKure, Inc. is a clinical-stage biopharmaceutical company
focused on the discovery and development of best-in-class precision
medicines that target biologically validated drivers of cancers
that are underserved by available therapies. Using structure-based
drug design portfolio, OnKure is building a pipeline of
tumor-agnostic candidates that are designed to achieve optimal
efficacy and tolerability. OnKure is currently developing OKI-219,
a selective PI3KαH1047R inhibitor, as its lead program. OnKure aims
to become a leader in targeting oncogenic PI3Kα and has multiple
programs designed to enable best-in-class targeting of this key
oncogene.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, express or implied statements regarding the structure, timing
and completion of the proposed business combination involving Reneo
and OnKure, the concurrent PIPE financing and any related proposed
transactions (collectively, the “Proposed Transactions”). Any
statements contained in this press release that are not statements
of historical fact may be deemed to be forward-looking statements.
Forward-looking statements generally are accompanied by words such
as “anticipate,” “believe,” “continue,” “estimate,” “expect,”
“future,” “goal,” “intend,” “may,” “outlook,” “plan,” “potential,”
“predict,” “project,” “seem,” “seek,” “should,” “target,” “will,”
“would,” and similar expressions that indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements may include, but are not limited to,
statements regarding the Proposed Transactions; the combined
company’s capitalization and the planned use of proceeds following
the Proposed Transactions; the potential of, and plans and
expectations regarding, the combined company’s product candidates;
the expected executive officers and directors of the combined
company; the development of the combined company’s current and
future product candidates; the future operations of Reneo, OnKure
and the combined company; and the commercial potential of the
combined company’s product candidates, including any anticipated
milestones.
These statements are based on various assumptions, whether or
not identified in this press release, and on the current
expectations of Reneo’s and OnKure’s management and are not
assurances as to actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by any investor as,
a guarantee, an assurance, a prediction or a definitive statement
of fact or probability. Actual events and circumstances, many of
which are outside of the control of Reneo and OnKure, are difficult
or impossible to predict and will differ from assumptions
underlying forward-looking statements.
These forward-looking statements are subject to a number of
risks and uncertainties, including, among other things: the risk
that the conditions to the closing of the Proposed Transactions are
not satisfied, including the risk that any required regulatory
approvals are not obtained, are delayed or are subject to
unanticipated conditions that could adversely affect Reneo, OnKure
or the combined company or that the approval of the stockholders of
Reneo or OnKure is not obtained on the timeline expected, if at
all; uncertainties as to the timing of the closing of the Proposed
Transactions and the ability of each of Reneo and OnKure to
consummate the Proposed Transactions; risks related to the ability
of Reneo and OnKure to correctly estimate and manage their
respective operating expenses and expenses associated with the
Proposed Transactions pending the closing of the Proposed
Transactions; risks associated with the possible failure to realize
certain anticipated benefits of the Proposed Transactions,
including with respect to future financial and operating results;
the potential for the occurrence of any event, change or other
circumstance or condition that could give rise to the termination
of the Proposed Transactions and any agreements entered into in
connection therewith; the possible effect of the announcement,
pendency or completion of the Proposed Transactions on Reneo’s or
OnKure’s business relationships, operating results and business
generally; the risk that as a result of adjustments to the exchange
ratio, Reneo stockholders and OnKure stockholders could own more or
less of the combined company than is currently anticipated; risks
related to the market price of Reneo’s common stock relative to the
value suggested by the exchange ratio; unexpected costs, charges or
expenses resulting from the Proposed Transactions; the potential
for, and uncertainty associated with the outcome of, any legal
proceedings that may be instituted against Reneo or OnKure or any
of their respective directors or officers related to the Proposed
Transactions; risks related to OnKure’s early stage of development;
the uncertainties associated with OnKure’s product candidates, as
well as risks associated with the clinical development and
regulatory approval of product candidates, including potential
delays in the completion of clinical trials; the significant net
losses each of Reneo and OnKure has incurred since inception; the
combined company’s ability to initiate and complete ongoing and
planned preclinical studies and clinical trials and advance its
product candidates through clinical development; the timing of the
availability of data from the combined company’s clinical trials;
the outcome of preclinical testing and clinical trials of the
combined company’s product candidates, including the ability of
those trials to satisfy relevant governmental or regulatory
requirements; the combined company’s plans to research, develop and
commercialize its current and future product candidates; the
clinical utility, potential benefits and market acceptance of the
combined company’s product candidates; the requirement for
additional capital to continue to advance these product candidates,
which may not be available on favorable terms or at all; the
combined company’s ability to attract, hire, and retain skilled
executive officers and employees; the combined company’s ability to
protect its intellectual property and proprietary technologies; the
combined company’s reliance on third parties, contract
manufacturers, and contract research organizations; the possibility
that Reneo, OnKure or the combined company may be adversely
affected by other economic, business, or competitive factors; risks
associated with changes in applicable laws or regulations; those
factors discussed in Reneo’s Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2024 under the heading “Item 1A.
Risk Factors” and in Reneo’s other filings with the U.S. Securities
and Exchange Commission (“SEC”); and other risks.
This press release also concerns product candidates that are
under clinical investigation and which have not yet been approved
for marketing by the U.S. Food and Drug Administration. Such
product candidates are currently limited by federal law to
investigational use, and no representation is made as to their
safety or effectiveness for the purposes for which they are being
investigated.
Additional Information and Where to Find It
The information herein does not purport to be all-inclusive or
contain all the information that may be required to make a full
analysis of Reneo, OnKure, the combined company or the Proposed
Transactions. Readers should each make their own evaluation of
Reneo and OnKure and of the relevance and adequacy of the
information disclosed herein and made available elsewhere by Reneo
and OnKure, as described below, and should make such other
investigations as they deem necessary.
This press release may be deemed to be solicitation material in
respect of the Proposed Transactions. In connection with the
Proposed Transactions, Reneo will file relevant materials with the
SEC, including a registration statement on Form S-4 (the “Form
S-4”) that will contain a proxy statement (the “Proxy Statement”)
and prospectus. This press release is not a substitute for the Form
S-4, the Proxy Statement or for any other document that Reneo may
file with the SEC and/or send to Reneo’s stockholders in connection
with the Proposed Transactions. BEFORE MAKING ANY VOTING DECISION,
INVESTORS AND SECURITY HOLDERS OF RENEO AND ONKURE ARE URGED TO
READ THE FORM S-4, THE PROXY STATEMENT AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT RENEO,
ONKURE, THE COMBINED COMPANY, THE PROPOSED TRANSACTIONS AND RELATED
MATTERS.
Investors and security holders will be able to obtain free
copies of the Form S-4, the Proxy Statement and other documents
filed by Reneo with the SEC through the website maintained by the
SEC at www.sec.gov. Copies of the documents filed by Reneo with the
SEC will also be available free of charge on Reneo’s website at
www.reneopharma.com/investors or by contacting Reneo’s Investor
Relations at investors@reneopharma.com.
Participants in the Solicitation
Reneo, OnKure and their respective directors and certain of
their executive officers may be considered participants in the
solicitation of proxies from Reneo’s stockholders with respect to
the Proposed Transactions under the rules of the SEC. Information
about the directors and executive officers of Reneo and their
ownership of common stock of Reneo is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2023, which was
filed with the SEC on March 28, 2024, as amended on April 26, 2024,
including under the sections entitled “Item 10. Directors,
Executive Officers and Corporate Governance”, “Item 11. Executive
Compensation”, “Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters”, and “Item
13. Certain Relationships and Related Transactions, and Director
Independence”. To the extent the security holdings of directors and
executive officers of Reneo have changed since the amounts
described in this filing, such changes are set forth on Initial
Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4 filed with the SEC, which can be
found at no charge at the SEC’s website at www.sec.gov. In
addition, certain of Reneo’s executive officers are expected to
provide consulting services to the combined company following the
closing of the Mergers. Additional information regarding the
persons who may be deemed participants in the proxy solicitations
and a description of their direct and indirect interests, by
security holdings or otherwise, will also be included in the Form
S-4, the Proxy Statement and other relevant materials to be filed
with the SEC when they become available. You may obtain free copies
of this document as described above.
OnKure and its directors and executive officers, which consist
of R. Michael Carruthers, Isaac Manke, Ph.D., Andrew Phillips,
Ph.D., who are the non-employee members of the OnKure board of
directors, Nicholas A. Saccomano, Ph.D., OnKure’s President and
Chief Executive Officer and a member of the OnKure board of
directors, and Jason Leverone, OnKure’s Chief Financial Officer,
may be deemed to be participants in the solicitation of proxies
from Reneo stockholders in connection with the Proposed
Transactions. In the Proposed Transactions, certain outstanding,
unvested equity awards held by Dr. Saccomano will become fully
vested. Following the closing of the Proposed Transactions, Dr.
Saccomano and Mr. Leverone will be named the President and Chief
Executive Officer and Chief Financial Officer, respectively, of
Reneo. Additional information about the OnKure directors and
executive officers, including their direct and indirect interests
in Reneo, by security holdings or otherwise, will be included in
the Form S-4, the Proxy Statement and other relevant materials to
be filed with the SEC when they become available. That document can
be obtained free of charge from the sources indicated above.
No Offer or Solicitation
This press release is for informational purposes only and is
neither an offer to sell, nor a solicitation of an offer to buy or
subscribe for, any securities of Reneo or OnKure, nor is it a
solicitation of any vote in any jurisdiction with respect to the
Proposed Transactions or otherwise.
Contacts:
Danielle Spangler Investor Relations Reneo Pharmaceuticals, Inc.
dspangler@reneopharma.com
Investor RelationsOnKure, Inc.investors@OnKure.com