By Chris Wack

Magenta Therapeutics said Wednesday it is merging with Dianthus Therapeutics, a privately held, clinical-stage biotechnology company in an all-stock transaction.

Magenta shares were halted at 77 cents in premarket trading.

The combined company will focus on advancing Dianthus's pipeline of next-generation complement inhibitors, including DNTH103 currently in a Phase 1 clinical trial.

Upon completion of the merger, the combined company is expected to operate under the name Dianthus Therapeutics, and trade on the Nasdaq under the ticker symbol DNTH.

Dianthus has secured commitments for a $70 million private investment in its stock and pre-funded warrants from a syndicate of healthcare investors that are expected to close immediately prior to the completion of the merger.

With the cash expected from both companies at closing and the proceeds of the concurrent private financing, the combined company is expected to have $180 million of cash or cash equivalents immediately post-closing. The cash resources are intended to be used to advance Dianthus's pipeline through multiple clinical data catalysts and is expected to fund operations into mid-2026.

The merger and related financing are expected to close in the third quarter of 2023.

Magenta said in February that it was beginning a comprehensive review of strategic alternatives, and has since completed winding down a majority of its activities and costs associated with its research-and-development initiatives, including the termination of its lease and the sale of key assets.

Write to Chris Wack at chris.wack@wsj.com

(END) Dow Jones Newswires

May 03, 2023 07:26 ET (11:26 GMT)

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