The current trading session witnesses a remarkable surge in the value of ARCA Biopharma, Inc. (NASDAQ: ABIO) stock, marking a notable increase of 104.09% to $3.49 as per the latest check. This upward trajectory in ABIO stock follows the announcement of a merger agreement.
A final agreement has been reached between ARCA Biopharma (ABIO) and Oruka Therapeutics, who intend to combine through an all-stock transaction. Oruka is a privately held biotechnology company that creates biologics for chronic skin diseases, especially plaque psoriasis. With the combined company, Oruka can focus on expanding its pipeline of potentially ground-breaking biologics, such as the IL-23p19 inhibitor ORKA-001 and the IL-17A/F inhibitor ORKA-002.
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Upon completion of the merger, the amalgamated company intends to rebrand as Oruka Therapeutics, Inc., and list on Nasdaq under the ticker symbol “ORKA”. The merger is being facilitated by a consortium of healthcare investors led by Fairmount and Venrock Healthcare Capital Partners who have committed $275 million to investing in Oruka’s common stock and pre-funded warrants.
The financing arrangement is slated to conclude immediately preceding the merger’s finalization. The resultant company’s cash reserves post-closure are projected to sustain Oruka’s operations until 2027 and bolster the progression of ORKA-001 and ORKA-002 through their initial clinical proof-of-concept stages.
Furthermore, prior to the merger’s closure, ARCA Biopharma anticipates declaring a cash dividend to its pre-merger stockholders, commensurate with ARCA’s net cash exceeding $5 million. This merger, coupled with substantial financing, is poised to furnish the necessary resources to augment ARCA Biopharma’s operational capacities and propel its initiatives into clinical development with precision and efficacy.
As per the terms delineated in the merger agreement, pre-merger ARCA Biopharma stockholders are slated to possess approximately 2.38% equity in the combined entity, while pre-merger Oruka stockholders are anticipated to hold around 97.62% ownership. ARCA Biopharma is expected to inject $5 million into the merged entity and disburse a dividend of approximately $20 million to its pre-merger stockholders immediately prior to the merger’s culmination.
