By Colin Kellaher

Shares of Neoleukin Therapeutics moved higher in premarket trading Tuesday after the biopharmaceutical company said it agreed to an all-stock reverse merger with privately held genetic-medicines company Neurogene.

Seattle-based Neoleukin said its shareholders would own about 16% of the combined company, which will focus on advancing Neurogene's portfolio of genetic medicines for complex neurological diseases.

Neoleukin and Neurogene said they expect the combined company to have a cash balance of about $200 million upon completion of the deal, including roughly $95 million from a concurrent private financing by new and existing Neurogene investors, which they said would provide a cash runway into the second half of 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.

Neoleukin and Neurogene said the combined company plans to operate under the Neurogene moniker and to trade on the Nasdaq Capital Market under the symbol NGNE.

Neoleukin shares, which closed Monday at 92.5 cents, were recently up 12% at $1.04 in premarket trading.

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

(END) Dow Jones Newswires

July 18, 2023 07:07 ET (11:07 GMT)

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