By Colin Kellaher

Shares of Frequency Therapeutics surged in premarket trading Friday after the biotechnology company said it agreed to an all-stock reverse merger with privately held genetic-medicines company Korro Bio.

Frequency, based in Lexington, Mass., said its shareholders would own about 8% of the combined company, which will focus on Korro's portfolio of RNA editing programs.

Frequency and Korro said they expect the combined company to have cash balance of about $170 million, including $117 million from a planned concurrent financing from a syndicate of life-sciences investors, which they said would provide a cash runway into 2026.

A reverse merger allows a private company to go public by merging with a listed company at a lower cost than is involved in a traditional initial public offering.

Frequency and Korro said the combined company plans to operate under the name Korro Bio, with its shares trading on Nasdaq under the symbol KRRO.

Frequency shares, which closed Thursday at 40 cents, were recently up nearly 58% to 63 cents in premarket trading.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

July 14, 2023 07:28 ET (11:28 GMT)

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