CAMBRIDGE, Mass. - Korro Bio, Inc. (NASDAQ: KRRO), a biopharmaceutical company specializing in RNA editing technology for genetic diseases, has secured approximately $70 million in a private financing round, the company announced today.
The private investment in public equity (PIPE) deal, led by Deep Track Capital, includes participation from Atlas (NYSE:ATCO) Venture, Blue Owl Healthcare Opportunities, NEA, Rock Springs Capital, Tri Locum Partners, and other healthcare investors.
The financing is expected to close on April 22, 2024, subject to customary closing conditions. With the addition of the PIPE funds to its existing cash reserves, Korro anticipates a pro-forma cash balance of around $236 million. This capital injection is intended to support the company's operations into the second half of 2025.
Korro's lead investigational drug, KRRO-110, is designed to treat Alpha-1 Antitrypsin Deficiency (AATD), a genetic condition that can lead to lung and liver disease. The company is on track to file for regulatory approval to begin a First-in-Human (FIH) study in AATD patients in the second half of 2024.
The proceeds from the PIPE are also earmarked to fund the completion of a Phase 1/2 trial of KRRO-110, with an interim readout expected in the second half of 2025 and study completion anticipated in 2026.
The offer and sale of the securities in the PIPE are being made in a private transaction and have not been registered under the Securities Act of 1933. Korro has agreed to file a registration statement with the SEC for the resale of the shares issued in the PIPE. Piper Sandler is acting as the lead placement agent, with RBC Capital Markets and BMO Capital Markets serving as co-placement agents.
Korro Bio focuses on developing RNA-based therapies, which offer the potential for precision and tunability in treating a range of diseases. The company aims to leverage its proprietary platform and the established regulatory pathways of approved oligonucleotide drugs to bring its therapies to patients.
This press release contains forward-looking statements, including statements regarding the anticipated use of net proceeds and the expected closing of the PIPE. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially.
The information reported is based on a press release statement and has not been independently verified.
InvestingPro Insights
Korro Bio, Inc. (NASDAQ: KRRO) has recently made headlines with its successful $70 million private financing round. As investors consider the potential of this biopharmaceutical innovator, it's crucial to look at the financial health and market performance of the company. InvestingPro data reveals a market capitalization of $555.92 million, which reflects the company's current valuation in the market.
Despite not having a positive P/E ratio, indicating that the company is not currently profitable, the significant Price to Book ratio of 3.27 suggests that investors are willing to pay a premium over the company's book value for its shares. This could be due to the promising pipeline of drugs and the potential market for their RNA editing technology.
InvestingPro Tips highlight that Korro Bio holds more cash than debt, which is a strong indicator of financial stability, especially important for a company in the capital-intensive biotech sector. Moreover, the stock has experienced a high return over the last year, with a 347.67% one-year price total return, which may interest investors looking for high-growth potential in their portfolios.
Still, analysts caution that Korro is not expected to be profitable this year, and the company suffers from weak gross profit margins, which could be a concern for long-term sustainability.
For those interested in a deeper analysis, InvestingPro offers additional insights on Korro Bio, including 11 more InvestingPro Tips that could help investors make a more informed decision. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the comprehensive financial metrics and expert analysis that InvestingPro provides.
The recent capital raise and the progress in Korro's drug development pipeline are key considerations for investors. With the next earnings date slated for May 7, 2024, stakeholders will be watching closely for further updates on the company's financial health and the advancement of its clinical trials.
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