Shares of biopharmaceutical company Aerpio Pharmaceuticals (NASDAQ: ARPO) are rallying premarket on Monday after the company announced it has entered into a merger agreement with Aadi Bioscience.
The merger will see Aerpio change its name to Aadi Bioscience, Inc, with the combined company listed on the Nasdaq and focusing on advancing Aadi’s lead product candidate, FYARRO.
To support the merger, Aerpio has entered into subscription agreements to raise $155 million in a Private Investment in Public Equity (PIPE) financing led by Acuta Capital Partners and KVP Capital.
The company said that proceeds from the financing will be used for the commercialisation of FYARRO in advanced malignant PEComa and a planned tumour-agnostic registrational trial in solid tumours harbouring inactivating alterations.
The combined company cash at closing will fund operations through to 2024.
Caley Castelein, a board member of Aerpio and the proposed chairman of the combined company, stated, “Aerpio’s board of directors diligently undertook a comprehensive strategic review and has concluded that the proposed transaction with Aadi is in the best interest of our shareholders. We believe Aadi’s late-stage development program may offer significant medical benefit to PEComa patients and important potential for patients with tumors harboring TSC1 or TSC2 inactivating alterations.”
Premarket, Aerpio's stock price is up 18.10% at $1.37 per share.
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