ARCA Biopharma and Oruka Therapeutics Agree to Merger

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ARCA biopharma and Oruka Therapeutics recently announced that the 2 companies have entered into a definitive agreement to combine their businesses in an all-stock transaction. With Oruka’s portfolio of novel biologics for the treatment of chronic skin diseases such as plaque psoriasis, the merger will advance ORKA-001, an IL-23p19 inhibitor, and ORKA-002, an IL-17A/F inhibitor. After the merger, the companies will operate as Oruka Therapeutics.¹

“Our mission at Oruka is to offer people affected with chronic skin diseases the most possible freedom from their condition. We believe that our lead programs, engineered by the world-class team at Paragon, could meaningfully advance the standard of care in psoriasis and related diseases. This merger and significant financing is expected to provide resources to build out our operational capabilities and propel our programs into clinical development with focus and efficiency,” said Lawrence Klein, PhD, Chief Executive Officer of Oruka, in the news release.

Oruka is the third company founded based on assets generated by Paragon Therapeutics, a biotechnology company developing biologics for the treatment of various diseases with high unmet needs. Paragon, founded in 2021 by the health care investor Fairmount, also developed Apogee Therapeutics and Spyre Therapeutics.²

Oruka’s goal is to “transform the treatment of plaque psoriasis, psoriatic arthritis, and other dermatologic and inflammatory indications by developing potentially best-in-class, long-acting antibodies against validated targets with critical roles in these diseases.”

The ORKA-001 and ORKA-002 programs were designed using unique antibody engineering, including half-life extension, to enable once or twice-a-year dosing to potentially rival other currently available treatments. Oruka expects both programs to begin clinical trials in 2025. Initial pharmacokinetic data for ORKA-001 may be available in the second half of 2025, providing validation of the ability to extend dosing intervals and high antibody exposures.

“I am excited to support Oruka in their mission to advance the standard of care in plaque psoriasis and other associated diseases. Over the past 25 years, I’ve seen the field advance to previously unimagined levels of efficacy, but there is still unmet need as patients continue to seek freedom from their disease,” said Andrew Blauvelt, MD, MBA, a board-certified dermatologist in Portland, Oregon, and chair of Oruka’s scientific advisory board, in the news release. “Our recent work in the KNOCKOUT study has demonstrated that stronger IL-23 inhibition can lead to higher response rates, with the potential for continued disease remissions without therapy. Oruka’s lead programs are uniquely suited to build upon this work, potentially offering greater efficacy, less frequent dosing, and more durable disease modification than currently available therapies.”

Regarding the merger agreement, pre-merger ARCA stockholders are expected to own approximately 2.38% of the combined company and the pre-merger Oruka stockholders are expected to own approximately 97.62% of the combined company. ARCA is expected to contribute $5 million to the combined company and pay a $20 million dividend to pre-merger ARCA stockholders immediately before the merger closes.

The merger has been approved by both companies’ board of directors and is expected to close in the third quarter of 2024. The new combined company will be directed by Lawrence Klein, PhD, Oruka’s current CEO, as well as board members Peter Harwin, managing member of Fairmount; Samarth Kulkarni, PhD, CEO and chairman of CRISPR Therapeutics; Cameron Turtle, DPhil, CEO of Spyre Therapeutics; and CarlDambkowski, MD, CMO of Apogee Therapeutics.

References

1. ARCA biopharma and Oruka Therapeutics announce merger agreement. News release. GlobeNewswire. April 3, 2024. Accessed April 3, 2024. https://www.globenewswire.com/news-release/2024/04/03/2856819/0/en/ARCA-biopharma-and-Oruka-Therapeutics-Announce-Merger-Agreement.html
2. Restoring skin health. Oruka Therapeutics. Accessed April 3, 2024. https://www.orukatx.com/#about-us