On December 12, 2024 TuHURA Biosciences, Inc. (Nasdaq: HURA) ("TuHURA"), a Phase 3 registration-stage immune-oncology company developing novel technologies to overcome resistance to cancer immunotherapy, and Kineta, Inc. (OTC Pink: KANT) ("Kineta"), a clinical-stage biotechnology company focused on the development of novel immunotherapies in oncology that address cancer immune resistance, reported that they have entered into a definitive merger agreement in which TuHURA would acquire Kineta, including the rights to Kineta’s novel KVA12123 antibody, for a combination of cash and shares of TuHURA common stock via a merger transaction (the "Proposed Transaction") (Press release, Kineta, DEC 12, 2024, View Source;utm_medium=rss&utm_campaign=tuhura-biosciences-inc-enters-into-definitive-merger-agreement-to-acquire-kineta-inc [SID1234649076]).
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"We are pleased to have entered into this definitive agreement with Kineta, which represents the culmination of the Exclusivity and Right of First Offer Agreement that TuHURA and Kineta entered into in July 2024. Our strategy of providing Kineta this past summer with a $5 million exclusivity fee to restart and finish their Phase 1 monotherapy and combination with pembrolizumab trial demonstrated our view that the PK/PD profile would position KVA12123 as a potential best-in-class V-domain Ig suppressor of T-cell activation (VISTA)-inhibiting antibody. We believe the real potential for this class of checkpoint inhibitors resides in the treatment of blood related cancers. The data presented at the December 2024 ASH (Free ASH Whitepaper) meeting indicates a strong correlation between NPM1 mutations (mNPM1) and elevated VISTA expression, particularly in the context of acute myeloid leukemia (AML), where high VISTA levels on leukemia cells, associated with mNPM1, can potentially contribute to immune evasion and disease progression impacting their treatment response. Given mNPM1 drives leukemogenesis through menin, and the introduction of menin inhibitors improving treatment responses in mNPM1-associated AML, a combination with a VISTA-inhibiting antibody could be the next step in improving response rates in AML," commented James Bianco, M.D., President and Chief Executive Officer of TuHURA.
KVA12123 is a VISTA-blocking immunotherapy in development as a monoclonal antibody infusion drug dosed every two-week cycles. It is completing two clinical trials both as a monotherapy and in combination with Merck’s anti-PD1 therapy, KEYTRUDA (pembrolizumab), in patients with advanced treatment-refractory solid tumors. Competitive therapies targeting VISTA have demonstrated either poor monotherapy anti-tumor activity in preclinical models or induction of cytokine release syndrome (CRS) in human clinical trials. Through the combination of unique epitope binding and an optimized IgG1 Fc region, KVA12123 demonstrates strong monotherapy tumor growth inhibition in preclinical models without evidence of CRS in clinical trial participants. KVA12123 has been shown to de-risk the VISTA target and provides a novel approach to address immune suppression in the tumor microenvironment (TME) with a mechanism of action that is differentiated and complementary with T cell focused therapies. KVA12123 may be an effective immunotherapy for many types of cancer and represents the introduction of a new class of checkpoint inhibitors.
VISTA is a negative immune checkpoint that suppresses T cell function in a variety of solid tumors. High VISTA expression in tumor correlates with poor survival in cancer patients and has been associated with a lack of response to other immune checkpoint inhibitors. Blocking VISTA induces an efficient polyfunctional immune response to address immunosuppression and drives anti-tumor responses.
KVA12123 has completed enrollment in its monotherapy arm, demonstrating safety at its highest dose level (1000mg). Kineta anticipates completion of enrollment in the combination therapy arm where KVA12123 is administered with Merck’s anti-PD1 therapy, KEYTRUDA (pembrolizumab). Initial results were reported earlier this year at the American Association of Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2024 and at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) meeting, supporting best-in-class profile.
"Following a thorough review of exploring strategic alternatives for Kineta and the discussions held with TuHURA over the course of the past several months, we believe this acquisition by TuHURA maximizes shareholder value and provides an exciting development path forward for KVA12123. We believe KVA12123 has multiple synergies with both of TuHURA’s IFx and Delta receptor antibody-drug conjugate (ADC) and peptide drug conjugate (PDC) technologies and that a TuHURA acquisition will provide the necessary resources to advance KVA12123 through its clinical development, maximizing value for Kineta’s shareholders," said Craig W. Philips, President of Kineta. "In addition to the TuHURA transaction, Kineta is continuing to pursue partnership opportunities for some of its other non-KVA12123-related products and technologies prior to the close of the TuHURA transaction."
About the Proposed Transaction
Under the terms of the merger agreement, upon the completion of the Proposed Transaction, Kineta stockholders will receive their pro rata share (based on the number of Kineta fully diluted shares held by them) of aggregate merger consideration consisting of a combination of cash and shares of TuHURA common stock. The cash component of the aggregate merger consideration will be a base cash amount of $9,005,000 (consisting of a value of $15,000,000 minus the $5,995,000 advanced to Kineta under the Exclusivity and Right of First Offer Agreement) less the sum of Kineta’s working capital deficit at the closing of the Proposed Transaction and any working capital loans made by TuHURA to Kineta between the signing of the merger agreement and closing of the Proposed Transaction. The share component of the aggregate merger consideration will consist of an aggregate of up to approximately 3,476,568 shares of TuHURA common stock, subject to a six-month holdback of approximately 869,142 of such shares to satisfy certain additional liabilities of the closing date that may be identified after the closing. As additional merger consideration, Kineta stockholders will be entitled to receive their pro rata share of certain payments that Kineta may receive after the closing from the potential pre-closing sale by Kineta of certain non-KVA12123 products and technologies.
In connection with the merger agreement, TuHURA and Kineta entered into a Clinical Trial Funding Agreement under which TuHURA agreed to continue to fund clinical trial expenses for KVA12123 in an amount of up to $900,000, which may be increased upon mutual agreement. The merger agreement also provides that Kineta may request the extension of up to $2,000,000 in working capital loans from TuHURA, $1,750,000 of which will be contingent on the completion of a financing transaction by TuHURA.
The merger agreement has been unanimously approved by the boards of directors of both companies and is subject to Kineta stockholder approval. The completion of the Proposed Transaction is also subject to the satisfaction or waiver of certain other conditions, such as the approval by TuHURA’s stockholders of an increase in the number of authorized shares of TuHURA common stock, Kineta’s working capital deficit not exceeding $12,000,000 at the time of closing, the effectiveness of a registration statement on Form S-4 registering the shares of TuHURA common stock issuable to the Kineta stockholders in the Proposed Transaction, and other customary closing conditions. The Proposed Transaction is currently expected to close in the first quarter of 2025.