MRK Merck and Co Inc

By Colin Kellaher

Yumanity Therapeutics LLC, a biotechnology startup that recently agreed to collaborate with Merck & Co. on new treatments for neurodegenerative diseases, on Monday unveiled plans to go public through a reverse merger with Proteostasis Therapeutics Inc.

Proteostasis, a Boston clinical-stage biopharmaceutical company, will acquire Yumanity in exchange for newly issued shares representing about 67.5% of the combined firm, which will operate as Yumanity Therapeutics Inc., the companies said.

Yumanity in June granted Merck exclusive rights to its pipeline programs for the treatment of amyotrophic lateral sclerosis and frontotemporal lobar dementia in a deal that includes potential milestone payments of about $500 million, along with royalties on sales.

The company's first clinical-stage product candidate, YTX-7739, is currently in phase 1 clinical development for the treatment and disease modification of Parkinson's disease.

Yumanity has previously raised more than $100 million in funding from investors including Merck, Biogen Inc., Pfizer Inc., Sanofi S.A., Fidelity Management & Research Co. and Alexandria Venture Investments, the venture-capital arm of Alexandria Real Estate Equities Inc.

Proteostasis, whose current shareholders will own 32.5% of the combined company, said it plans to pursue the sale of its cystic fibrosis assets, adding that it will share any proceeds with its holders through contingent value rights. The company said it has slashed its workforce by about 80%, and that its five remaining full-time employees will work to complete the Yumanity deal and the asset sale.

Yumanity and Proteostasis said they expect the deal to close in the fourth quarter.

Shares of Proteostasis rose 3.1% to $1.34 in Monday afternoon trading.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

August 24, 2020 13:59 ET (17:59 GMT)

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