Redx Pharma and Jounce Therapeutics Inc (NASDAQ: JNCE) agreed to merge via a proposed all-share transaction. Redx is a clinical-stage biotechnology company focused on discovering and developing small molecule, targeted therapeutics for cancer and fibrotic diseases and cancer-associated fibrosis. The combined group's highest priority will be the development of RXC007, currently in a Phase 2a study in idiopathic pulmonary fibrosis, with topline data expected in Q1 2024. Additionally, RXC004 is being developed as a targeted treatment for Wnt-ligand-dependent cancers. It is progressing through Phase 2 trials, and RXC008, a GI-targeted ROCK inhibitor for fibro stenotic Crohn's disease, is expected to enter clinical development in H1 2024. Jounce is expected to have around $155 million in cash and cash equivalents, which, together with Redx's expected cash at completion, would provide a cash runway into H2 2025. Concurrently, Jounce is reducing its workforce by approximately 57%. Jounce expects a non-recurring charge of approximately $11.2 million in Q1 of 2023 related to the restructuring that will be completed by the end of March. The combined group will retain around 47 Jounce employees at a research and development base in Massachusetts. Named Redx Inc., the combined group will be listed on Nasdaq in the U.S. under the ticker symbol REDX. Led by current Redx CEO Lisa Anson, Dr. Jane Griffiths, current Redx Chair, will become the non-executive Chair of the combined group. Redx Shareholders shall receive 0.2105 Jounce Shares in exchange for each Redx share. Jounce intends to conduct a reverse stock split with a ratio of 1-for-5. If the Reverse Stock Split is approved, the Exchange Ratio will be adjusted to 0.0421 Jounce Shares in exchange for each Redx share. Price Action: JNCE shares are up 14.10% at $1.13 during the premarket session on the last check Thursday.

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