425: Alumis and ACELYRIN Announce Merger to Create Immunology-Focused Biopharma Leader

Alumis and ACELYRIN are merging in an all-stock transaction to create a late-stage clinical biopharma company focused on immune-mediated diseases.

Summary

• Alumis and ACELYRIN have entered into a definitive merger agreement.
• ACELYRIN stockholders will receive 0.4274 shares of Alumis common stock for each share of ACELYRIN common stock owned.
• Alumis stockholders will own approximately 55% and ACELYRIN stockholders will own approximately 45% of the combined company on a fully diluted basis.
• The combined company will have a pro forma cash position of approximately $737 million as of December 31, 2024, expected to provide runway into 2027.
• The merger is expected to close in the second quarter of 2025, pending stockholder approval and customary closing conditions.
• The combined company will operate under the Alumis name and be led by the current Alumis executive team.
• Alumis's lead candidate, ESK-001, is in Phase 3 trials for psoriasis with topline data expected in the first half of 2026 and Phase 2b for SLE with topline data expected in 2026.
• Alumis is also developing A-005, a CNS penetrant allosteric TYK2 inhibitor, with Phase 2 clinical trial in MS expected to initiate in the second half of 2025 and topline data expected in 2026.
• ACELYRIN is advancing lonigutamab, a subcutaneously delivered anti-IGF-1R with best-in-class potential in thyroid eye disease (TED) currently being investigated in a Phase 2 clinical trial.
• ACELYRIN plans to re-evaluate the development program for lonigutamab to confirm its differentiation in a capital efficient manner.

Sentiment

Score: 8

Explanation: The document presents a positive outlook on the merger, highlighting the benefits of a diversified pipeline, increased financial resources, and complementary expertise. The management comments are optimistic, and the expected cash runway into 2027 provides investor confidence.

Positives

• The merger creates a company with a diversified late-stage pipeline.
• The combined company will have increased financial resources.
• The merger brings together complementary expertise in R&D and commercialization.
• The pro forma cash position provides a runway into 2027, beyond expected multiple clinical readouts.
• Stockholders representing approximately 62% of Alumis voting common stock and approximately 24% of ACELYRIN common stock have entered into voting agreements in support of the transaction.

Negatives

• ACELYRIN intends to delay initiation of its Phase 3 LONGITUDE program for lonigutamab until the closing of the Merger.
• ACELYRIN plans to re-evaluate the development program for lonigutamab in a capital efficient manner.

Risks

• The merger may not be completed in a timely manner or at all.
• Required approvals, including stockholder approvals, may not be received.
• The announcement or completion of the merger could negatively impact Alumis's and ACELYRIN's ability to retain key personnel and maintain relationships.
• The merger could divert management's attention from ongoing business operations.
• Legal proceedings related to the merger could arise.
• The anticipated benefits and synergies of the merger may not be fully realized or may take longer to realize than expected.
• Integration of the two companies post-closing may not occur as anticipated.
• The value of Alumis securities to be issued in the proposed transaction may be impacted.

Future Outlook

The combined company expects the cash position to provide runway to advance the pipeline through multiple key data readouts and to fund operating expenses and capital expenditure requirements into 2027.

Management Comments

• Martin Babler, President, Chief Executive Officer and Chairman of Alumis, said, Through this combination with ACELYRIN, Alumis will have the financial flexibility and runway to advance an expanded late-stage pipeline, now including lonigutamab, and build commercial capabilities.
• Bruce Cozadd, Chair of the ACELYRIN Board of Directors and member of the Board Transaction Committee said, This merger represents the culmination of a thorough strategic review process by our Board and management team to determine the best and most value-maximizing path forward for ACELYRIN.
• Mina Kim, Chief Executive Officer of ACELYRIN, said, This merger brings together two complementary organizations and pipelines, enabling the company to leverage the benefits of combined development and commercial expertise, as well as catalyst diversification, to achieve even more together.

Industry Context

The merger reflects a trend in the biopharmaceutical industry towards consolidation to diversify pipelines, reduce risk, and achieve greater financial stability.

Comparison to Industry Standards

• The all-stock transaction is a common structure in the biopharmaceutical industry, allowing companies to combine resources without immediate cash outlays.
• The combined company's focus on immunology aligns with a growing area of pharmaceutical research and development.
• The cash runway into 2027 is a key metric, providing investors with confidence in the company's ability to reach key milestones.
• Comparable companies with similar market capitalizations and pipelines include but are not limited to: Annexon Biosciences (ANNX), Kymera Therapeutics (KYMR), and Arcus Biosciences (RCUS).

Stakeholder Impact

• Stockholders of both companies will be impacted by the merger, with Alumis stockholders owning approximately 55% and ACELYRIN stockholders owning approximately 45% of the combined company.
• Employees of both companies will be impacted by the integration of the two organizations.
• Patients may benefit from the development of new therapies for immune-mediated diseases.

Next Steps

• Obtain stockholder approvals from both Alumis and ACELYRIN.
• Satisfy other customary closing conditions.
• Complete the merger, expected in the second quarter of 2025.
• Integrate the two companies and execute the combined pipeline development plan.
• Re-evaluate the development program for lonigutamab to confirm its differentiation in a capital efficient manner.
• Initiate Phase 2 clinical trial in MS in the second half of 2025.
• Report Phase 2 OLE 52-week data update in PsO in 2025.
• Report Phase 3 topline data for PsO in the first half of 2026.
• Report Phase 2b topline data for SLE in 2026.
• Achieve Nasdaq listing for shares of Parent Common Stock to be issued in the Merger.

Key Dates