Talaris Therapeutics, Inc. (Nasdaq: TALS) (“Talaris”) and
Tourmaline Bio, Inc. (“Tourmaline”), a late-stage clinical
biotechnology company developing transformative medicines to
dramatically improve the lives of patients with life-altering
immune diseases, today announced that the companies have entered
into a definitive agreement under which Tourmaline will combine
with Talaris in an all-stock transaction (the “Merger”). The
combined company will focus on advancing Tourmaline’s lead program,
TOUR006, a potentially best-in-class anti-IL-6 antibody, for the
treatment of thyroid eye disease (TED) and atherosclerotic
cardiovascular disease (ASCVD). Upon completion of the Merger, the
combined company will operate under the name Tourmaline Bio, Inc.
and trade on the Nasdaq under the ticker symbol “TRML.” In
addition, Talaris anticipates making a cash dividend of up to
approximately $64.8 million to its stockholders prior to the
closing of the Merger.
In support of the Merger, Tourmaline has entered
into an agreement for a $75 million private placement with a
syndicate of new and existing institutional life sciences investors
including Acuta Capital Partners, Affinity Asset Advisors,
Braidwell LP, Cowen Healthcare Investments, Deep Track Capital,
Great Point Partners, LLC, KVP Capital, Logos Capital, Paradigm
BioCapital, Qiming Venture Partners USA, RA Capital Management, LP,
StemPoint Capital LP, TCGX, Vivo Capital, and other undisclosed
investors. Tourmaline previously completed a $112 million Series A
financing in 2023 that was co-led by Deep Track Capital, Cowen
Healthcare Investments, and TCGX. Tourmaline was founded in
September 2021 and initially financed in May 2022 by Hydra, KVP
Capital, Petrichor, and QVT Family Office.
“We are thrilled to be entering into this
transaction with Talaris,” said Sandeep Kulkarni, MD, Chief
Executive Officer of Tourmaline. “We have assembled a world-class
team with deep experience developing antibodies for immune
disorders and are now on the verge of beginning our Phase 2
development campaign in multiple indications. We believe that
TOUR006 has best-in-class potential and could be a transformative
treatment option for millions of patients suffering from immune
disorders. This merger and the support from leading life sciences
investors will allow us to accelerate our development plans in TED,
heart disease, and potentially other indications.”
“The Talaris Board of Directors conducted a
review of strategic alternatives to identify paths to provide value
to our stockholders. We believe the transaction we are announcing
today with Tourmaline, together with the expected cash dividend of
up to approximately $64.8 million, presents a compelling
opportunity for our shareholders,” said Mary Kay Fenton, Interim
Chief Executive Officer of Talaris. “TOUR006 is a promising
clinical asset with near-term, value-creating milestone
opportunities. We look forward to its future success.”
Tourmaline’s lead program, TOUR006, is an
anti-IL-6 antibody with best-in-class properties including high
binding affinity to IL-6 and a naturally long half-life which
potentially enable delivery as a low-volume, infrequently
administered, subcutaneous injection. Tourmaline’s strategy is to
develop TOUR006 in diseases characterized by inflammation and
autoantibodies, where IL-6 pathway inhibitors have been
underexplored despite compelling signals of clinical benefit.
Following this strategy, Tourmaline’s lead indication is TED, also
known as Graves’ ophthalmopathy, an autoimmune disease
characterized by inflammation and disfigurement around the eye
which can be sight-threatening in severe cases. Off-label use of
IL-6 pathway inhibitors in TED has been well-documented in
literature demonstrating strong evidence of the ability of such
inhibitors to reduce inflammation, eye-bulging, and key biomarkers
such as pathogenic autoantibodies. Tourmaline plans to initiate a
Phase 2b trial of TOUR006 for the treatment of TED in the third
quarter of 2023. The planned second indication for TOUR006 is
ASCVD, which continues to be a leading cause of death globally
despite the wide availability of oral therapies. IL-6 has been
implicated as a promising drug target for addressing ASCVD by over
two decades of clinical, genetic, and experimental research.
Tourmaline plans to initiate a Phase 2 trial of TOUR006 in ASCVD in
2024. Tourmaline plans to seek additional indication opportunities
for TOUR006 among the wide array of diseases where IL-6 inhibition
has been validated. TOUR006 was licensed by Tourmaline from Pfizer
Inc. in May 2022. Pfizer had completed Phase 1 and Phase 2 trials
in other indications with a safety profile consistent with the
anti-IL-6 and anti-IL-6R class.
About the Merger
Under the terms of the merger agreement,
Tourmaline stockholders (including Tourmaline stockholders issued
shares in the private placement) will receive shares of Talaris
common stock upon the consummation of the Merger. In addition to
their shares of Talaris common stock, Talaris stockholders will
participate in a cash dividend of up to approximately $64.8 million
in connection with, and prior to, the Merger.
Tourmaline stockholders immediately prior to the
Merger (including Tourmaline stockholders issued shares in the
private placement) are expected to own approximately 78.7% of the
combined company and Talaris stockholders immediately prior to the
Merger are expected to own approximately 21.3% of the combined
company, each on a fully diluted basis. The percentage of the
combined company that each company’s former stockholders are
expected to own may be adjusted based on Talaris’ net cash at
closing (subject to a collar) and the proceeds from the sale of
certain of Talaris’ legacy assets prior to closing.
The Merger has been unanimously approved by the
Board of Directors of both companies and both Boards of Directors
have recommended that their respective stockholders approve the
matters regarding the Merger. The Merger is expected to close in
the fourth quarter of 2023, subject to approvals by stockholders of
each company and other customary closing conditions.
In connection with the Merger, directors,
officers and certain stockholders of each of Tourmaline and Talaris
have executed support agreements, pursuant to the terms of which
they have agreed to vote all of their shares of capital stock in
favor of the Merger or the issuance of Talaris shares in the
Merger, as applicable.
Jefferies, Piper Sandler, Guggenheim Securities,
and Truist Securities are serving as placement agents to Tourmaline
in connection with the private placement and Cooley LLP is serving
as legal counsel to Tourmaline in connection with the private
placement and the Merger. SVB Securities is serving as exclusive
financial advisor to Talaris and Goodwin Procter LLP is serving as
legal counsel to Talaris.
Management and Organization
Following the Merger, the combined company will
be led by current members of the Tourmaline leadership team,
including:
- Sandeep
Kulkarni, MD, Chief Executive Officer
- Yung Chyung, MD,
Chief Medical Officer
- Brad
Middlekauff, JD, Chief Business Officer and General Counsel
- Susan Dana
Jones, PhD, Chief Technology Officer
- Ryan Iarrobino,
Senior Vice President, Product Development
- Kevin Johnson,
PhD, Chief Regulatory Officer
- Dora Rau, Senior
Vice President, Head of Quality
The merger agreement provides that the Board of
Directors of the combined company will be composed of seven board
members; five board members, including the CEO of Tourmaline, will
be named by Tourmaline and two board members will be named by
Talaris.
About Tourmaline Bio, Inc.
Tourmaline Bio is a late-stage clinical
biotechnology company driven by its mission to develop
transformative medicines that dramatically improve the lives of
patients with life-altering immune diseases. Tourmaline’s lead
program, TOUR006, is an anti-IL-6 antibody which exhibits
best-in-class properties including high binding affinity to IL-6
and a naturally long half-life. To date, TOUR006 has been studied
in over 400 autoimmune patients across six clinical trials.
Tourmaline plans to develop TOUR006 in thyroid eye disease (TED)
and atherosclerotic cardiovascular disease (ASCVD) as its lead and
secondary indications, respectively, with additional indications
under consideration.
About Talaris Therapeutics,
Inc.
Talaris Therapeutics, Inc., prior to its review
of strategic alternatives, was a cell therapy company developing an
innovative method of allogeneic hematopoietic stem cell
transplantation (“allo-HSCT”), called Facilitated Allo-HSCT
Therapy.
Participants in the
Solicitation
This communication relates to the proposed
merger transaction involving Talaris and Tourmaline and may be
deemed to be solicitation material in respect of the proposed
merger transaction. In connection with the proposed merger
transaction, Talaris will file relevant materials with the U.S.
Securities and Exchange Commission (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 communication is not a substitute for the Form S-4, the Proxy
Statement or for any other document that Talaris may file with the
SEC and or send to Talaris’ shareholders in connection with the
proposed merger transaction. BEFORE MAKING ANY VOTING DECISION,
INVESTORS AND SECURITY HOLDERS OF TALARIS 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 WILL CONTAIN IMPORTANT INFORMATION ABOUT TALARIS, THE
PROPOSED MERGER TRANSACTION AND RELATED MATTERS.
Additional Information and Where to Find
It
Investors and security holders will be able to
obtain free copies of the Form S-4, the Proxy Statement and other
documents filed by Talaris with the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed by Talaris with the SEC will also be available free
of charge on Talaris’ website at www.talaristx.com, or by
contacting Talaris’ Investor Relations at investors@talaristx.com.
Talaris, Tourmaline, and their respective directors and certain of
their executive officers may be considered participants in the
solicitation of proxies from Talaris’ shareholders with respect to
the proposed merger transaction under the rules of the SEC.
Information about the directors and executive officers of Talaris
is set forth in its Annual Report on Form 10-K for the year ended
December 31, 2022, which was filed with the SEC on March 31, 2023,
and in subsequent documents filed with the SEC. 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.
No Offer or Solicitation
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities nor a
solicitation of any vote or approval with respect to the proposed
transaction or otherwise. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the U S. Securities Act of 1933, as amended, and otherwise in
accordance with applicable law.
Forward-Looking Statements
This communication 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 Merger; Talaris’
cash position at December 31, 2022 and for subsequent periods; the
combined company’s listing on Nasdaq after closing of the proposed
Merger; expectations regarding the ownership structure of the
combined company; the anticipated timing of closing; the expected
executive officers and directors of the combined company; each
company’s and the combined company’s expected cash position at the
closing of the proposed Merger and cash runway of the combined
company; the future operations of the combined company; the nature,
strategy and focus of the combined company; the development and
commercial potential and potential benefits of any product
candidates or platform technologies of the combined company; the
executive and board structure of the combined company; the location
of the combined company’s corporate headquarters; anticipated
preclinical and clinical drug development activities and related
timelines, including the expected timing for data and other
clinical results; and other statements that are not historical
fact. All statements other than statements of historical fact
contained in this communication are forward-looking statements.
These forward-looking statements are made as of the date they were
first issued, and were based on the then-current expectations,
estimates, forecasts, and projections, as well as the beliefs and
assumptions of management. Forward-looking statements are subject
to a number of risks and uncertainties, many of which involve
factors or circumstances that are beyond Talaris’ control. Talaris’
actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors, including
but not limited to (i) the risk that the conditions to the closing
of the proposed Merger are not satisfied, including the failure to
timely obtain shareholder approval for the transaction, if at all;
(ii) uncertainties as to the timing of the consummation of the
proposed Merger and the ability of each of Talaris and Tourmaline
to consummate the proposed Merger; (iii) risks related to Talaris’
ability to manage its operating expenses and its expenses
associated with the proposed merger pending closing; (iv) risks
related to the failure or delay in obtaining required approvals
from any governmental or quasi-governmental entity necessary to
consummate the proposed Merger; (v) the risk that as a result of
adjustments to the exchange ratio, Talaris shareholders and
Tourmaline stockholders could own more or less of the combined
company than is currently anticipated; (vi) risks related to the
market price of Talaris’ common stock relative to the value
suggested by the exchange ratio; (vii) unexpected costs, charges or
expenses resulting from the transaction; (viii) potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the proposed Merger; (ix) the
uncertainties associated with Tourmaline’s platform technologies,
as well as risks associated with the clinical development and
regulatory approval of product candidates, including potential
delays in the commencement, enrollment and completion of clinical
trials; (x) risks related to the inability of the combined company
to obtain sufficient additional capital to continue to advance
these product candidates and its preclinical programs; (xi)
uncertainties in obtaining successful clinical results for product
candidates and unexpected costs that may result therefrom; (xii)
risks related to the failure to realize any value from product
candidates and preclinical programs being developed and anticipated
to be developed in light of inherent risks and difficulties
involved in successfully bringing product candidates to market;
(xiii) risks associated with the possible failure to realize
certain anticipated benefits of the proposed Merger, including with
respect to future financial and operating results; (xiv) risks
associated with Talaris’ financial close process; (xv) the risk
that the pre-closing financing is not consummated; and (xvi) the
risk that Talaris shareholders receive more or less of the cash
dividend than is currently anticipated, among others. Actual
results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of these
risks and uncertainties. These and other risks and uncertainties
are more fully described in periodic filings with the SEC,
including the factors described in the section titled “Risk
Factors” in Talaris’ Annual Report on Form 10-K for the year ended
December 31, 2022 filed with the SEC, and in other filings that
Talaris makes and will make with the SEC in connection with the
proposed Merger, including the Proxy Statement described above
under “Additional Information about the Proposed Merger Transaction
and Where to Find It.” You should not place undue reliance on these
forward-looking statements, which are made only as of the date
hereof or as of the dates indicated in the forward-looking
statements. Talaris expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in its expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are
based.
For Talaris:
Investor ContactChris BrinzeyICR
Westwickechris.brinzey@westwicke.com(339) 970-2843
For Tourmaline:
Lee M. SternMeru Advisorslstern@meruadvisors.com
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