Talaris Therapeutics’ plans have crystallized. Having stopped its transplant programs and hunkered down, the biotech has now entered into a reverse merger that will provide Tourmaline Bio with a platform for taking an ex-Pfizer drug into midphase clinical trials.
Tourmaline has kept a low profile up to this point. Founded and helmed by Sandeep Kulkarni, M.D., formerly of Roivant Sciences, the biotech licensed an anti-IL-6 antibody from Pfizer in May 2022. The Big Pharma had tested the candidate in phase 1 and 2 studies before deeming it surplus to requirements, allowing Tourmaline to swoop in and plot a two-front clinical trial program for the asset, now known as TOUR006.
The New York-based biotech aims to start a phase 2b trial in thyroid eye disease (TED), an autoimmune disorder also known as Graves’ ophthalmopathy, in the third quarter of this year. A phase 2 study of the drug candidate in atherosclerotic cardiovascular disease (ASCVD) is scheduled to start next year.
Tourmaline is pursuing different indications than Pfizer is. The Big Pharma ran phase 1 and 2 trials of the same antibody in Crohn's disease, lupus and rheumatoid arthritis from 2010 to 2016. Pfizer’s focus overlapped with the priorities of other developers of IL-6 drugs such as Sanofi-Regeneron and Roche, which respectively sell Kevzara and Actemra in indications including rheumatoid arthritis.
TOUR006 is on a different path. Tourmaline sees opportunities to develop the drug in “diseases characterized by inflammation and autoantibodies, where IL-6 pathway inhibitors have been underexplored despite compelling signals of clinical benefit.” That focus led the biotech to TED, a disease in which IL-6 drugs have been used off-label, and ASCVD, owing to clinical and genetic data on IL-6.
To fund the work, Tourmaline has arranged the reverse merger with Talaris, which will give it a listing on Nasdaq, and agreed to a $75 million private placement. The placement is supported by the investors that co-led the biotech’s $112 million series A round—Deep Track Capital, Cowen Healthcare Investments and TCGX—and involves new backers including RA Capital Management.
The biotech expects to emerge from the merger with $210 million. Talaris will pay its shareholders a cash dividend of around $65 million, and they will also own more than one-fifth of the combined company.
Striking the deal marks the end of Talaris’ search for a way out of its predicament. Things started to go wrong for the biotech when the death of a patient caused it to pause its phase 3 kidney transplant trial. The biotech restarted its trials late last year only to stop work in February, lay off one-third of its staff and look for a buyer. When a fast deal failed to materialize, Talaris laid off almost all its remaining staff.
News of the deal broke on a busy day for biotech M&A that also saw Solve Therapeutics disclose the acquisition of Duke University spinout Cereius, a developer of targeted radiodiagnostics and radiotherapeutics for cancer patients.