Shares of Eliem Therapeutics, Inc. (NASDAQ: ELYM) have embarked on a bullish trajectory this morning, marking a substantial increase of 53.93% to reach $4.11 as per the latest check. This upsurge comes in the wake of an announcement regarding an acquisition through an equity maneuver, consequently boosting investor confidence in ELYM shares.
Eliem (ELYM) has disclosed today that it has formalized a definitive acquisition pact with Tenet Medicines, Inc., a privately held biotechnology enterprise in the developmental phase. Pursuant to this agreement, Eliem has committed to acquiring Tenet.
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The amalgamated entity aims to concentrate on advancing TNT119, an anti-CD19 antibody potentially renowned for its efficacy across a broad spectrum of autoimmune ailments, including systemic lupus erythematosus, immune thrombocytopenia, and membranous nephropathy.
In substantiation of this acquisition, Eliem has entered into a securities purchase agreement for a $120 million private placement of common stock with a consortium of both new and existing institutional life science investors. This private placement is anticipated to conclude concurrently with the finalization of the acquisition.
Within this private placement, Eliem has consented to vend 31,238,282 shares of its common stock at a rate of $3.84 per share, thus accumulating aggregate gross proceeds of $120 million upon the closure of the private placement. Upon the conclusion of the acquisition and the private placement, the combined company is slated to possess an estimated total of approximately $210 million in cash and cash equivalents.
Eliem anticipates that this will suffice to finance the planned operations of the combined entity until 2027 and facilitate the prospective attainment of pivotal clinical and developmental milestones for TNT119. Midway through 2024 is when the purchase and private placement are expected to close, pending Eliem’s stockholders’ approval and the satisfaction of other usual closing requirements.
Eliem’s common stock will be distributed to Tenet shareholders in compliance with the terms of the acquisition agreement when the transaction is completed. The equityholders of Tenet prior to the acquisition are projected to possess roughly 15% ownership in the combined company, while the pre-acquisition equityholders of Eliem are expected to retain approximately 85% ownership in the combined entity, prior to the implementation of the concurrent private placement.
