The deal marks the end of the road for Lexington-based Frequency, which once had high hopes for restoring hearing loss but has fallen on hard times this year after its experimental treatment failed to outperform a placebo in a clinical trial.
Investors have had little appetite for buying shares in initial public offerings during the past year, so reverse mergers give private companies like Korro a back-door entry into the public markets.
Last week, Apogee Therapeutics of Waltham became the first biotech in the state to file for an IPO in 2023, according to the Massachusetts Biotechnology Council. Apogee shares opened on the Nasdaq on Friday and were up nearly 25 percent in mid-afternoon trading.
Aiyar said Korro plans to present regulators next year with a plan to start clinical trials in 2025 of its lead drug candidate, which would treat an inherited genetic disorder called AATD that causes progressive lung and liver disease. Down the road, though, he said the company’s approach had the potential to yield drugs to treat a wide range of illnesses.
“Gene editing in large numbers of patients is something we can bring to bear,” Aiyar said in an interview.
Aiyar said Korro will divest Frequency’s experimental treatment for multiple sclerosis. Frequency was founded in 2014 to rejuvenate damaged hearing cells based on research by Robert Langer at Massachusetts Institute of Technology and Jeffrey Karp at Harvard Medical School. But it shifted course after its clinical setback.
Frequency laid off 26 employees last February, leaving 22 behind, but none will come to work at Korro after the merger.
Under terms of the deal, pre-merger Frequency stockowners will own about 8 percent of the combined company, while Korro shareholders will own about 92 percent. Frequency chief executive David Lucchino will get one seat on the Korro board. The other six will be held by Frequency representatives and independent directors.
Korro, which has 85 employees, has raised $225 million from private investors to date, including a recent $117 million funding round from a syndicate of life sciences investors. That, along with cash from the Frequency balance sheet, should carry the company into 2026, it said.
Robert Weisman can be reached at [email protected].
This content was originally published here.
