Eliem Therapeutics Inc (NASDAQ:ELYM) has agreed to acquire Tenet Medicines Inc., a development-stage private biotechnology company.

The combined company plans to focus on advancing TNT119, an anti-CD19 antibody designed for a broad range of autoimmune diseases, including systemic lupus erythematosus, immune thrombocytopenia, and membranous nephropathy.

In June 2023, Eliem Therapeutics completed a review of its business, including the status of its programs, resources, and capabilities. The company has decided to halt further development of its Kv7 program and comprehensively explore strategic alternatives.

Also, Eliem entered a securities purchase agreement for a $120 million private placement. Eliem has agreed to sell 31.2 million shares at $3.84 per share.

The private placement is expected to close concurrently with the closing of the acquisition anticipated in mid-2024.

The combined company's total cash and cash equivalents are expected to be approximately $210 million.

Eliem expects this will be sufficient to fund the combined company's planned operations into 2027 and to enable the potential attainment of key clinical and development milestones for TNT119.

"The Eliem board of directors has conducted a thorough review of strategic alternatives, and we believe the transaction we are announcing today with Tenet presents a compelling opportunity for our stockholders," said Andrew Levin, Executive Chairman of Eliem. "We believe TNT119 represents a promising clinical asset across multiple autoimmune diseases targeting markets where there is a need for improved treatment options."

Pre-acquisition Tenet equity holders are expected to own approximately 15% of the combined company, and pre-acquisition Eliem equity holders are expected to own approximately 85%.

Price Action: ELYM shares are up 56.2% at $4.17 on the last check Thursday.