--The combined company will operate as Q32 Bio
Inc., advancing the development of Q32 Bio's two clinical
development candidates, bempikibart (ADX-914) in Phase 2 for the
treatment of atopic dermatitis (AD) and alopecia areata (AA), and
ADX-097 entering Phase 2 for the treatment of complement
disorders--
--Q32 Bio has re-acquired worldwide
development and commercial rights to bempikibart, an
anti-IL-7Rα antibody inhibiting IL-7 and TSLP-mediated signaling,
and remains on-track to report multiple topline Phase 2 results in
2H'24 --
--Concurrent $42
million private placement investment with new and existing
investors supports clinical development through multiple
milestones, including key Phase 2 readouts for
bempikibart, initial ADX-097 proof-of-concept data by
year-end 2024 and ADX-097 topline results in 2H'25 --
--Combined company's cash balance expected to
be approximately $115 million at close, providing
cash runway to mid-2026--
WALTHAM,
Mass. and BEDFORD,
Mass., Nov. 16, 2023 /PRNewswire/ -- Q32 Bio
Inc., a clinical stage biotechnology company developing biologic
therapeutics to restore immune homeostasis, and Homology Medicines,
Inc. (Nasdaq: FIXX), today announced they have entered into a
definitive merger agreement to combine the companies in an
all-stock transaction. The combined company will focus on advancing
Q32 Bio's wholly owned clinical development candidates for the
treatment of autoimmune and inflammatory diseases. Upon completion
of the merger, the combined company will operate as Q32 Bio,
headquartered in Waltham,
Massachusetts, and is expected to trade under the Nasdaq
ticker symbol "QTTB".
In support of the merger agreement, Q32 Bio has entered into an
agreement for a $42 million private
placement with participation from existing and new investors
including OrbiMed, Atlas Venture, Abingworth, Bristol Myers Squibb,
Acorn Bioventures, Osage University Partners (OUP), CU Healthcare
Innovation Fund, Sanofi Ventures, Agent Capital and other
undisclosed investors.
"The proposed merger with Homology Medicines and concurrent
private placement is expected to provide Q32 Bio with the capital
to drive development of our autoimmune and inflammatory pipeline
through multiple clinical milestones," said Jodie Morrison,
Chief Executive Officer of Q32 Bio. "This funding is expected to
enable us to deliver two Phase 2 readouts for bempikibart in the
second half of 2024, proof-of-concept data for ADX-097, a
tissue-targeted inhibitor of complement activation, by year-end
2024, and topline ADX-097 clinical results in the second half of
2025."
"Following a comprehensive assessment of our strategic options,
management and the Board of Directors believe the merger with Q32
Bio is in the best interest of our shareholders," said Albert Seymour, President and Chief Executive
Officer of Homology Medicines. "The Q32 Bio management team's
extensive track record, deep biopharmaceutical expertise and the
potential of its clinical development pipeline provide a compelling
opportunity to deliver meaningful treatments to patients with
critical unmet needs."
Proceeds from the proposed transactions will be used to advance
the clinical development of Q32 Bio's two wholly owned assets,
bempikibart (ADX-914), for which Q32 Bio earlier today announced it
regained all rights from Amgen, and ADX-097.
Bempikibart, Q32 Bio's lead program, is a fully human
anti-IL-7Rα antibody that re-regulates adaptive immune function by
blocking signaling mediated by both IL-7 and TSLP and is currently
being evaluated in two Phase 2 trials, with one clinical trial
evaluating the use in atopic dermatitis (AD) and one evaluating the
use in alopecia areata (AA). All data from the Phase 2 trials
remain blinded and Q32 Bio remains on track to report topline Phase
2 results in the second half of 2024.
ADX-097 is based on a novel platform enabling tissue-targeted
regulation of the complement system without long-term systemic
blockade, a key differentiator from current complement
therapeutics. Q32 Bio recently completed a first-in-human, Phase 1
ascending dose clinical study of ADX-097 in healthy volunteers.
Results from the Phase 1 clinical trial demonstrated a favorable
tolerability and immunogenicity profile across all single and
multiple dose cohorts and weekly subcutaneous dosing met exposures
for predicted complete complement inhibition in the tissue with no
systemic inhibition. Q32 Bio will be commencing an open-label Phase
2 basket clinical trial, with initial data expected by year-end
2024, and a Phase 2 clinical trial in ANCA-Associated Vasculitis
(AAV), with topline results from the AAV and basket trials expected
in the second half of 2025.
About the Proposed Merger
Under the terms of the merger agreement, Homology Medicines will
issue to pre-merger Q32 Bio stockholders shares of Homology
Medicines common stock as merger consideration in exchange for the
cancellation of shares of capital stock of Q32 Bio, and Q32 Bio
will become a wholly owned subsidiary of Homology Medicines.
Stockholders of Q32 Bio will receive newly issued shares of
Homology Medicines common stock pursuant to a formula set forth in
the merger agreement. Pre-merger Homology Medicines stockholders
are expected to own approximately 25% of the combined company and
pre-merger Q32 Bio stockholders (including those purchasing Q32 Bio
shares in the concurrent private financing discussed above) are
expected to own approximately 75% of the combined company. The
percentage of the combined company that pre-merger Q32 Bio
stockholders and pre-merger Homology Medicines will own upon the
closing of the merger is further subject to adjustment based on the
amount of Homology Medicine's net cash at the time of closing. In
connection with the closing of the proposed transactions, Homology
Medicines stockholders will also be issued a contingent value right
(CVR) representing the right to receive certain payments from
proceeds received by the combined company, if any, related to
dispositions of Homology Medicines' pre-transaction legacy
assets.
Homology Medicines has discontinued development of its R&D
programs, including HMI-103 for the treatment of PKU, and has been
exploring strategic alternatives for its programs and platform
technology. If Homology Medicines has not otherwise disposed of its
ownership position in Oxford Biomedica Solutions, LLC (Oxford
Solutions), a contract development and manufacturing organization
(CDMO) jointly established by Homology Medicines and Oxford
Biomedica plc, and monetized its development programs, including
HMI-103 for the treatment of PKU, Homology Medicines stockholders
of record will be issued a CVR for each outstanding share of
Homology Medicines common stock held by such Homology Medicines
stockholder prior to the closing of the proposed merger. The CVR
would represent the right to receive certain cash payments from
proceeds received by Homology Medicines related to the sale or
license of its development programs and platform technology and the
exercise of a put/call option or other sale or disposition of
Homology Medicines' minority ownership position in Oxford
Solutions.
The merger agreement has been approved by the boards of
directors of both companies. Additional information about the
transaction will be provided in a Current Report on Form 8-K that
will be filed by Homology Medicines with the Securities and
Exchange Commission (SEC) and will be available
at www.sec.gov.
Leerink Partners is serving as the exclusive financial
advisor to Q32 Bio. Leerink Partners and Piper Sandler are serving as placement agents
for Q32 Bio's planned private placement. Goodwin Procter
LLP is serving as legal counsel to Q32 Bio. TD Cowen is
serving as the exclusive financial advisor and Latham & Watkins
LLP is serving as legal counsel to Homology Medicines.
Management and Organization
Upon closing of the proposed transaction, the combined company
will be led by current members of the Q32 Bio leadership team
including:
- Jodie Morrison, Chief Executive
Officer
- Shelia Violette, PhD, Founder
& Chief Scientific Officer
- Jason Campagna, MD, PhD, Chief
Medical Officer
- Saul Fink, PhD, Chief Technology
Officer
- Maria Marzilli, MPH, Executive
Vice President, Corporate Strategy & Program Operations
- David Appugliese, JD, Senior
Vice President, Head of People
The Board of Directors of the combined company is expected to be
comprised of nine members, consisting of seven members designated
by Q32 Bio and two members designated by Homology Medicines. The
transaction has been approved by the Board of Directors of each
company and is expected to close in the first quarter of 2024,
subject to customary closing conditions, including the approval of
the transaction by the stockholders of each company.
About Q32 Bio
Q32 Bio is a clinical stage biotechnology company developing
biologic therapeutics targeting potent regulators of the innate and
adaptive immune systems to re-balance immunity in autoimmune and
inflammatory diseases. Q32 Bio's lead programs, focused on the IL-7
/ TSLP receptor pathways and complement system, address immune
dysregulation to help patients take back control of their
lives.
Q32 Bio's program for adaptive immunity, bempikibart (ADX-914),
is a fully human anti-IL-7Rα antibody that re-regulates adaptive
immune function for the treatment of autoimmune diseases. It is
being evaluated in two Phase 2 trials for the treatment of atopic
dermatitis and alopecia areata. The IL-7 and TSLP pathways have
been genetically and biologically implicated in driving several T
cell-mediated pathological processes in numerous autoimmune
diseases. Q32 Bio's program for innate immunity, ADX-097, is based
on a novel platform enabling tissue-targeted regulation of the
complement system without long-term systemic blockade – a key
differentiator versus current complement therapeutics. Q32 Bio has
recently completed a first-in-human, Phase 1 ascending dose
clinical study of ADX-097 in healthy volunteers.
About Homology Medicines
Homology Medicines, Inc. is a clinical-stage genetic medicines
company historically focused on transforming the lives of patients
suffering from rare diseases by addressing the underlying cause of
the disease. Homology Medicines has gene editing and gene therapy
clinical-stage programs in PKU and Hunter syndrome (MPS II), a
preclinical pipeline that includes a gene therapy candidate for
metachromatic leukodystrophy and a GTx-mAb (vectorized antibody)
candidate for paroxysmal nocturnal hemoglobinuria, as well as
intellectual property on its family of 15 adeno-associated viruses
(AAVHSCs). Homology Medicines is not currently pursuing further
development of these programs and is pursuing strategic options for
the Company and its programs and platform technology. Additionally,
the Company has an ownership stake in Oxford Solutions, an AAV
manufacturing company based on Homology Medicines' internal process
development and manufacturing formed as a joint venture between
Homology Medicines and Oxford Biomedica plc.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995, including statements regarding the proposed transaction
involving Homology Medicines and Q32 Bio, including the conditions
to, and timing of, closing of the proposed transaction, the
location and management of the combined company, the percentage
ownership of the combined company, and the parties' ability to
consummate the proposed transaction and private placement
financing, including the intended use of net proceeds from the
private placement financing and the expected timing of closing and
completion of the private placement financing, the composition of
the Board of Directors of the combined company, the expected
issuance of the CVR and the contingent payments contemplated by the
CVR, the combined company's expected cash and the sufficiency of
the combined company's cash, cash equivalents and short-term
investments to fund operations into mid-2026, the listing of the
combined company's shares on Nasdaq, the expectations surrounding
the potential, safety, efficacy, and regulatory and clinical
progress of Q32 Bio's product candidates, including bempikibart and
ADX-097, and anticipated milestones and timing, among
others.
Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as "may," "will," "should,"
"would," "expect," "anticipate," "plan," "likely," "believe,"
"estimate," "project," "intend," and other similar expressions
among others. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: (i) the risk that the conditions to
the closing of the proposed transaction are not satisfied,
including the failure to timely or at all obtain stockholder
approval for the proposed transaction or the failure to timely or
at all obtain any required regulatory clearances; (ii)
uncertainties as to the timing of the consummation of the proposed
transaction and the ability of each of Homology Medicines and Q32
Bio to consummate the proposed transaction; (iii) the ability of
Homology Medicines and Q32 Bio to integrate their businesses
successfully and to achieve anticipated synergies; (iv) the
possibility that other anticipated benefits of the proposed
transaction will not be realized, including without limitation,
anticipated revenues, expenses, earnings and other financial
results, and growth and expansion of the combined company's
operations, and the anticipated tax treatment of the combination;
(v) potential litigation relating to the proposed transaction that
could be instituted against Homology Medicines, Q32 Bio or their
respective directors; (vi) possible disruptions from the proposed
transaction that could harm Homology Medicines' and/or Q32 Bio's
respective businesses; (vii) the ability of Homology Medicines and
Q32 Bio to retain, attract and hire key personnel; (viii) potential
adverse reactions or changes to relationships with customers,
employees, suppliers or other parties resulting from the
announcement or completion of the proposed transaction; (ix)
potential business uncertainty, including changes to existing
business relationships, during the pendency of the proposed
transaction that could affect Homology Medicines' or Q32 Bio's
financial performance; (x) certain restrictions during the pendency
of the proposed transaction that may impact Homology Medicines' or
Q32 Bio's ability to pursue certain business opportunities or
strategic transactions; (xi) the combined company's need for
additional funding, which may not be available; (xii) failure to
identify additional product candidates and develop or commercialize
marketable products; (xiii) the early stage of the combined
company's development efforts; (xiv) potential unforeseen events
during clinical trials could cause delays or other adverse
consequences; (xv) risks relating to the regulatory approval
process; (xvi) interim, topline and preliminary data may change as
more patient data become available, and are subject to audit and
verification procedures that could result in material changes in
the final data; (xvii) Q32 Bio's product candidates may cause
serious adverse side effects; (xviii) inability to maintain our
collaborations, or the failure of these collaborations; (xix) the
combined company's reliance on third parties, including for the
manufacture of materials for our research programs, preclinical and
clinical studies; (xx) failure to obtain U.S. or international
marketing approval; (xxi) ongoing regulatory obligations; effects
of significant competition; (xxii) unfavorable pricing regulations,
third-party reimbursement practices or healthcare reform
initiatives; (xxiii) product liability lawsuits; (xxiv) securities
class action litigation; (xxv) the impact of the COVID-19 pandemic
and general economic conditions on our business and operations,
including the combined company's preclinical studies and clinical
trials; (xxvi) the possibility of system failures or security
breaches; risks relating to intellectual property; (xxvii)
significant costs incurred as a result of operating as a public
company; and (xxviii) such other factors as are set forth in
Homology Medicines' periodic public filings with the SEC, including
but not limited to those described under the heading "Risk Factors"
in Homology Medicines' Form 10-Q for the period ended September 30, 2023. Homology Medicines can give
no assurance that the conditions to the proposed transaction will
be satisfied. Except as required by applicable law, Homology
Medicines undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise.
Important Information about the Merger and Where to Find
It
This communication relates to a proposed transaction between
Homology Medicines and Q32 Bio. In connection with the proposed
transaction, Homology Medicines intends to file with the SEC a
registration statement on Form S-4 that will include a proxy
statement of Homology Medicines and that will constitute a
prospectus with respect to shares of Homology Medicines' common
stock to be issued in the proposed transaction (Proxy
Statement/Prospectus). Homology Medicines may also file other
documents with the SEC regarding the proposed transaction. This
document is not a substitute for the Proxy Statement/Prospectus or
any other document which Homology Medicines may file with the SEC.
INVESTORS, Q32 BIO STOCKHOLDERS AND HOMOLOGY MEDICINES STOCKHOLDERS
ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS THAT ARE OR WILL BE FILED BY HOMOLOGY MEDICINES
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND RELATED MATTERS. Investors, Q32 Bio stockholders and Homology
Medicines stockholders will also be able to obtain free copies of
the Proxy Statement/Prospectus (when available) and other documents
containing important information about Homology Medicines, Q32 Bio
and the proposed transaction that are or will be filed with the SEC
by Homology Medicines through the website maintained by the SEC at
www.sec.gov. Copies of the documents filed with the SEC by Homology
Medicines will also be available free of charge on Homology
Medicines' website at
https://investors.homologymedicines.com/financial-information/sec-filings
or by contacting Homology Medicines' investor relations department
by email at IR@homologymedicines.com.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made, except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act.
Participants in the Solicitation
Homology Medicines and certain of its directors and executive
officers may be deemed under SEC rules to be participants in the
solicitation of proxies of Homology Medicines stockholders in
connection with the proposed transaction. Information regarding the
persons who may, under SEC rules, be deemed participants in the
solicitation of proxies to Homology Medicines' stockholders in
connection with the proposed transaction will be set forth in the
Proxy Statement/Prospectus on Form S-4 for the proposed
transaction, which is expected to be filed with the SEC by Homology
Medicines. Investors and security holders of Q32 Bio and Homology
Medicines are urged to read the Proxy Statement/Prospectus and
other relevant documents that will be filed with the SEC by
Homology Medicines carefully and in their entirety when they become
available because they will contain important information about the
proposed transaction. Investors and security holders will be able
to obtain free copies of the Proxy Statement/Prospectus and other
documents containing important information about Q32 Bio and
Homology Medicines through the website maintained by the SEC at
www.sec.gov. Copies of the documents filed with the SEC by Homology
Medicines can be obtained free of charge by directing a written
request to Homology Medicines, Inc., One
Patriots Park, Bedford, MA
01730.
Contacts:
For Q32 Bio:
Investors:
Brendan Burns
Media: Sarah Sutton
Argot Partners
212.600.1902
Q32Bio@argotpartners.com
For Homology Medicines:
Brad
Smith
Chief Financial and Business Officer
781-691-3519
bsmith@homologymedicines.com
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SOURCE Q32 Bio