Ikena Oncology inks $43M cash grab in all-stock deal for Pionyr

Ikena Oncology said it added about $43 million to its runway after making an all-stock acquisition of the private startup Pionyr Immunotherapeutics, a clinical-stage company that Gilead decided not to fully buy out earlier this year.

Ikena had slimmed down its pipeline in November as the publicly traded biotech went into cash-saving mode like many of its peers in the industry.

Now, the stock-for-stock deal, announced Monday morning, allows Ikena to keep pursuing the so-called Hippo pathway with its Phase I-stage IK-930. The initial clinical data are anticipated later this year. The cash is also expected to bankroll bringing its MEK-RAF inhibitor IK-595 into the clinic, and the company has plans to submit an IND this year.

Ikena’s stock $IKNA was up about 6% in premarket trading on Monday morning.

Pionyr shareholders get a total of 1.8 million shares of Ikena common stock as well as non-voting convertible preferred stock at $7.15 per share and will own about 12% of the outstanding shares. Ikena’s stock closed at $4.93 apiece on Friday.

In May it had priced a $40 million unwritten offering at $6.55 per share. The company had to buy back some of those shares after realizing it violated a Nasdaq listing rule, it revealed in June in an SEC filing.

The deal makes New Enterprise Associates, SV Health Investors, Sofinnova Investments, Vida Ventures and Gilead owners in Ikena. Gilead waived its option to buy out the remaining 50.1% of Pionyr in March but retained a 49.9% equity interest, which it nabbed for $275 million in 2020.

Steven James

At the time of Gilead’s no-go decision, Pionyr CEO Steven James told Endpoints News the startup had two years of cash runway and was “not in a hurry” to go public or bring in additional money. Pionyr was “back in the driver’s seat,” he said.

“We have been highly rigorous and selective in our search for a buyer,” James said in Monday’s press release. “Our attraction to Ikena was driven by not only the potential of their targeted oncology programs, but by their company culture and the way their team has managed capital and developed their pipeline.”

Ikena said it will look to out-license or make other business development deals for Pionyr’s programs. That includes two clinical-stage assets, TREM1-targeting PY159 and TREM2-directed PY314. Both are being tested solo and with Merck’s Keytruda. An IND was expected to be filed for MARCO-targeted PY265 this year. If the programs are monetized in the next two years, legacy Pionyr shareholders have the right to 50% of the net proceeds, sans royalties.

The deal was approved by both boards and has closed. None of Pionyr’s management or board will transfer over to Ikena.

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