Why Are Frequency Therapeutics Shares Surging Today

Korro Bio Inc and Frequency Therapeutics Inc FREQ announced an all-stock merger transaction

Under the merger agreement's terms, stockholders of Korro Bio will receive newly issued shares of Frequency Therapeutics.

Frequency Therapeutics has discontinued developing its remyelination program for Multiple Sclerosis as it explores strategic alternatives for the program

Suppose Frequency Therapeutics has not otherwise monetized its remyelination program before the closing of the proposed merger. 

In that case, Frequency Therapeutics stockholders of record will be issued a contingent value right for each outstanding share.

The combined company will focus on advancing Korro Bio's portfolio of RNA editing programs and is expected to operate under Korro Bio, Inc. and will apply to trade on Nasdaq under the ticker symbol "KRRO."

Korro Bio has secured commitments from a syndicate of investors for a planned concurrent $117 million financing.

The combined company is expected to have approximately $170 million in cash, cash equivalents, and marketable securities at close after estimated transaction expenses. 

The Pro-forma cash balance is expected to provide a cash runway into 2026. The merger and related financing are expected to close in the fourth quarter of 2023.

Korro Bio is advancing its lead program for AATD to a clinical trial and intends to submit a regulatory filing in the second half of 2024. 

The combined company will be led by current members of the Korro Bio management team, including Ram Aiyar, President & Chief Executive Officer, Steve Colletti, Chief Scientific Officer, and Vineet Agarwal, Chief Financial Officer.

Price Action: FREQ shares are up 54.80% at $0.62 during the premarket session on the last check Friday.

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