Magenta Therapeutics has thrust Dianthus Therapeutics onto Wall Street through a reverse merger months after proceeding with wind-down plans.
The deal is a last hurrah for Magenta’s shareholders, who now have the opportunity to buy into the joint operation under Dianthus’ name and management team. The new company will hit Wall Street with $180 million in cash, which includes a $70 million private financing that’s been concurrently raised, according to an announcement from both companies Wednesday.
It’s been a swift decline for Magenta after the company disclosed in late January that a patient treated with its leukemia drug died in a phase 1/2 trial. The company paused the study, sending shares spiraling, and roughly a week later made plans to wind down. Shortly after, 85% of the staff were laid off and most of the C-suite—save for Chief Financial Officer Steve Mahoney—headed for the exits.
Magenta shareholders now have been tossed a potential financial life preserver, owning 21.3% of the joined venture. The company will be led by Dianthus’ management team, including CEO Marino Garcia, and have a 6-2 board makeup between Dianthus and Magenta, respectively.
Dianthus is a year to the day removed from a $100 million series A meant to fund the clinical development of its rare-disease-focused pipeline. So far, so good, as recruitment continues in a phase 1 trial testing Dianthus’ lead monoclonal antibody DNTH103 targeting the complement system in healthy volunteers. A look at the data is expected before the end of 2023.
If all signs check out then, Dianthus plans to ask regulators to greenlight a phase 2 trial in early 2024 to study the med in patients with myasthenia gravis. Magenta’s Mahoney said on a presentation Wednesday that the new lump sum of cash should be enough to fund through multiple phase 2 readouts; an interim look at the myasthenia gravis data is expected in 2025.
But myasthenia gravis is just the start for DNTH103, according to Garcia in the same presentation. Next on the clinical docket would be phase 2 trials in patients with multifocal motor neuropathy and chronic inflammatory demyelinating polyneuropathy.
“This is just the start of where we want to take the DNTH103 in the future,” Garcia said. Dianthus holds exclusive rights to the drug outside of Greater China, where Zenus BioPharma retains control.
There’s little else for the company to work on beyond DNTH103, but that’s set to change. Dianthus plans to pluck additional lead candidates out of the discovery stage this year.