ARCA biopharma and Oruka Therapeutics Announce Merger Agreement


ARCA biopharma and Oruka Therapeutics, a privately held biotechnology company developing novel biologics designed to set a new standard for the treatment of chronic skin diseases, including plaque psoriasis, announced on April 3, 2024, that they have entered into a definitive agreement to combine the companies in an all-stock transaction. The resulting entity will focus on advancing Oruka’s pipeline of potentially best-in-class biologics, including ORKA-001 (an IL-23p19 inhibitor) and ORKA-002 (an IL-17A/F inhibitor). Upon completion of the merger, the combined company plans to operate under the name Oruka Therapeutics, Inc. and trade on Nasdaq under the ticker symbol “ORKA.”

In support of the merger, Oruka has secured commitments for a $275 million private investment in its common stock and prefunded warrants to purchase its common stock from a syndicate of health care investors led by Fairmount and Venrock Healthcare Capital Partners, with participation from RTW Investments, Access Biotechnology, Commodore Capital, Deep Track Capital, Perceptive Advisors, Blackstone Multi-Asset Investing, Avidity Partners, Great Point Partners, Paradigm BioCapital, Braidwell, and Redmile Group as well as other investors, including multiple large investment management firms. The financing is expected to close immediately prior to completion of the merger. The combined company’s cash balance at closing is anticipated to fund Oruka’s operations through 2027 and support the advancement of ORKA-001 and ORKA-002 through initial clinical proof-of-concept. In addition, prior to closing of the merger, ARCA expects to declare a cash dividend to the premerger ARCA stockholders equal to the amount by which ARCA’s net cash exceeds $5 million.

“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,” said Lawrence Klein, PhD, chief executive officer of Oruka in a press release. “This merger and significant financing [are] expected to provide resources to build out our operational capabilities and propel our programs into clinical development with focus and efficiency.”

Oruka aims 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. Oruka is the third company founded based on assets generated by Paragon Therapeutics. Oruka’s co-lead programs, ORKA-001 and ORKA-002, were designed utilizing state-of-the-art antibody engineering, including half-life extension, to enable dosing as infrequently as once or twice a year while potentially delivering superior efficacy than the current standard of care. Both programs are expected to enter clinical trials in 2025, with initial pharmacokinetic data for ORKA-001 anticipated as early as the second half of 2025, which could provide important validation of the ability to achieve extended dosing intervals and high antibody exposures. The scientific foundation for Oruka was established in large part by Dr. Andrew Blauvelt, a world-renowned expert in psoriasis and chair of Oruka’s Scientific Advisory Board.

“I am excited to support Oruka in their mission to advance the standard of care in plaque psoriasis and other associated diseases,” said Dr. Blauvelt in a press release. “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. 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.”

“We believe that this combination with Oruka is the best path forward for ARCA stockholders,” said Robert E. Conway, chairman of the board of directors of ARCA in a press release. “We believe that the expected cash dividend and Oruka’s promising pipeline provides the potential for significant value creation for ARCA stockholders in the near- and long-term.”


Under the terms of the merger agreement, the premerger ARCA stockholders are expected to own approximately 2.38% of the combined company, and the premerger Oruka stockholders (inclusive of those investors participating in the preclosing financing) are expected to own approximately 97.62% of the combined company. The percentage of the combined company that ARCA’s stockholders will own as of the close of the merger is subject to adjustment based on the amount of ARCA’s net cash at the closing date. ARCA is expected to contribute $5 million to the combined entity and expects to pay a dividend to premerger ARCA stockholders of approximately $20 million immediately prior to the close of the merger.

The transaction has received approval by the board of directors of both companies and is expected to close in the third quarter of 2024, subject to certain closing conditions, including, among other things, approval by the stockholders of each company, the effectiveness of a registration statement to be filed with the US Securities and Exchange Commission to register the securities to be issued in connection with the merger, and the satisfaction of customary closing conditions.

The combined company will be named Oruka Therapeutics, Inc, and led by Lawrence Klein, PhD, Oruka’s current chief executive officer, who will be joined on Oruka’s board of directors by Peter Harwin, managing member of Fairmount, Samarth Kulkarni, PhD, CEO and chairman, CRISPR Therapeutics, Cameron Turtle, DPhil, CEO, Spyre Therapeutics, and Carl Dambkowski, MD, CMO, Apogee Therapeutics.

Wedbush PacGrow is serving as strategic advisor and Gibson, Dunn & Crutcher is serving as legal counsel to Oruka. Jefferies, TD Cowen, Leerink Partners, and LifeSci Capital are serving as the placement agents to Oruka. Cooley is serving as legal counsel to the placement agents. Lucid Capital Markets is serving as financial advisor, and Wilson Sonsini Goodrich & Rosati is serving as legal counsel to ARCA.

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