Korro Announces $70 Million Private Placement

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Korro Bio, Inc. announces a $70 million private placement led by Deep Track Capital and other healthcare investors. The financing is expected to close on April 22, 2024, providing pro-forma cash of approximately $236 million. Korro plans to use the proceeds for regulatory filings, interim readouts, and study completions for its genetic medicines. The company aims to advance its pipeline programs and platform development, with a focus on delivery and machine learning.

Positive

• Korro Bio secures $70 million in a private placement led by Deep Track Capital and other healthcare investors.
• Pro-forma cash and cash equivalents expected to reach $236 million post-financing.
• Proceeds to fund regulatory filings, interim readouts, and study completions for genetic medicines.
• Korro plans to advance liver and CNS pipeline programs, along with platform development focusing on delivery and machine learning.
• Piper Sandler, RBC Capital Markets, and BMO Capital Markets act as placement agents for the private placement.

Negative

• None.

Financial Analyst

The private placement executed by Korro Bio raises a substantial $70 million, significantly bolstering the company's pro-forma cash position to $236 million. This signals strong investor confidence, particularly from institutional entities like Deep Track Capital and Atlas Venture. Given that clinical trials, especially in the biopharmaceutical sector, can be exceedingly cash-intensive, this influx of capital is essential. For a retail investor, this event could indicate a strengthened financial foundation for Korro, potentially reducing near-term solvency concerns. However, the nature of private placements often leads to dilution of existing shares, which might be a concern for current shareholders. The earmarking of funds for the KRRO-110 trial and other pipeline projects conveys strategic focus on advancing its RNA-editing therapies. As these areas are prone to high volatility depending on trial outcomes, cautious optimism may be warranted. It's also pertinent to note that the securities issued are non-public, with conditions for future resale that could influence liquidity.

Biotech Market Analyst

Korro Bio's focus on RNA-editing for rare diseases such as Alpha-1 Antitrypsin Deficiency (AATD) is carving a niche in the competitive genetic medicine landscape. The anticipated FIH study places them on the map for potential breakthroughs in a market that's keen on innovation. A retail investor looking at the long-term horizon could find promise in the commitment to not only clinical studies but also the enhancement of platform capabilities like machine learning. As this is a space where technological advancements can disrupt traditional approaches, Korro's trajectory might be attractive to those who bank on progressive research and development. However, it's critical to approach the biotech sector with an understanding of inherent risks, including the binary nature of clinical trial outcomes and the regulatory hurdles that accompany drug development.

Medical Research Analyst

Entering the clinic with a novel therapeutic like KRRO-110 for AATD patients represents a significant milestone for Korro Bio. AATD is a genetic condition with limited treatment options, thus a successful trial could have profound implications for patients. Investors should be aware of the high stakes involved; positive trial results could lead to substantial stock appreciation, while unfavorable outcomes could have the opposite effect. Furthermore, Korro's investment in machine learning for drug delivery optimization hints at potential beyond the immediate pipeline. From an investor's perspective, especially those concerned with the societal impact of their portfolio, backing a company striving for medical advancements in rare diseases might align with both ethical and financial objectives. However, the intricate nature of genetic medicine warrants a careful evaluation of the scientific data as it unfolds.

• Financing led by Deep Track Capital with participation from other leading healthcare investors

• Pro-forma cash and cash equivalents of approximately $236 million before fees and expenses
• On track for regulatory filing for First-in-Human (FIH) study of KRRO-110 in Alpha-1 Antitrypsin Deficiency (AATD) patients anticipated in the second half of 2024
• Proceeds fund interim readout in the second half of 2025 and FIH study completion in 2026 for KRRO-110

CAMBRIDGE, Mass., April 18, 2024 (GLOBE NEWSWIRE) -- Korro Bio, Inc. (Korro) (Nasdaq: KRRO), a biopharmaceutical company focused on developing a new class of genetic medicines based on editing RNA for both rare and highly prevalent diseases, announced today that it has entered into a subscription agreement with certain new and existing accredited investors to issue and sell an aggregate of 1,249,283 shares of its common stock in a private placement (PIPE) that is expected to result in gross proceeds of approximately $70.0 million, before deducting placement agent fees and estimated offering expenses. The PIPE is expected to close on April 22, 2024, subject to the satisfaction of customary closing conditions.

The PIPE was led by funds affiliated with Deep Track Capital, with participation from Atlas Venture, Blue Owl Healthcare Opportunities, NEA, Rock Springs Capital, Tri Locum Partners, and other leading healthcare investors.

Korro expects that the net proceeds from the PIPE along with its existing cash and equivalents of $166.4 million as of December 31, 2023, will provide runway to fund the completion of a Phase 1/2 trial of KRRO-110 in ZZ AATD patients, anticipated in 2026, progress additional liver and CNS pipeline programs into the clinic and its platform with a focus on delivery and machine learning, with the remainder used for working capital and general corporate purposes.

Piper Sandler is acting as lead placement agent and RBC Capital Markets and BMO Capital Markets are acting as co-placement agents for the PIPE.

The offer and sale of the securities in the PIPE are being made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended, and may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Pursuant to a registration rights agreement, Korro agreed to file a registration statement with the SEC covering the resale of the shares issued in the PIPE.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Korro

Korro is a biopharmaceutical company focused on developing a new class of genetic medicines for both rare and highly prevalent diseases using its proprietary RNA editing platform. Korro is generating a portfolio of differentiated programs that are designed to harness the body’s natural RNA editing process to effect a precise yet transient single base edit. By editing RNA instead of DNA, Korro is expanding the reach of genetic medicines by delivering additional precision and tunability, which has the potential for increased specificity and improved long-term tolerability. Using an oligonucleotide-based approach, Korro expects to bring its medicines to patients by leveraging its proprietary platform with precedented delivery modalities, manufacturing know-how, and established regulatory pathways of approved oligonucleotide drugs. Korro is based in Cambridge, Mass.

Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include, but are not limited to, express or implied statements regarding expectations, hopes, beliefs, intentions or strategies of Korro regarding the future including, without limitation, express or implied statements regarding: the closing of the PIPE and intended use of net proceeds from the PIPE; Korro’s pro forma cash runway resulting from the PIPE; planned Phase 1/2 clinical trial of KRRO-110 in AATD and completion thereof; and Korro’s ability to advance its pipeline and the role of RNA editing technology in developing therapeutic options; among others. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would,” “aim,” “target,” “commit,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that statement is not forward looking. Forward-looking statements are based on current expectations and assumptions that, while considered reasonable are inherently uncertain. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, various factors beyond management’s control including risks associated with market conditions and meeting customary closing conditions, as well as risks inherent in biopharmaceutical development; risks associated with pre-clinical studies and clinical trials; and other risks associated with obtaining regulatory approvals and protecting intellectual property; as well as risks associated with general economic conditions; the inability to recognize the anticipated benefits of the recently completed merger, which may be affected by, among other things, competition, Korro’s ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees; costs related to merger; the possibility that Korro may be adversely affected by other economic, business, and/or competitive factors; other risks and uncertainties indicated from time to time in Korro’s filings with the SEC, including Item 1A. “Risk Factors” in Korro’s Annual Report on Form 10-K filed with the SEC on March 26, 2024, as such may be amended or supplemented by its other filings with the SEC. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements in this press release, which speak only as of the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Except as required by law, Korro does not undertake or accept any duty to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or in the events, conditions or circumstances on which any such statement is based. This press release does not purport to summarize all of the conditions, risks and other attributes of an investment in Korro.

Korro Contact Information 

Investors 
IR@korrobio.com 

Media 
Glenn Silver 
FINN Partners 
Glenn.silver@finnpartners.com 

FAQ

What is the amount of the private placement announced by Korro Bio, Inc.?

Korro Bio, Inc. announced a $70 million private placement.

Who led the financing for the private placement?

The financing for the private placement was led by Deep Track Capital.

When is the expected closing date for the private placement?

The private placement is expected to close on April 22, 2024.

What is the pro-forma cash and cash equivalents expected post-financing?

The pro-forma cash and cash equivalents are expected to reach approximately $236 million post-financing.

What are the intended uses of the proceeds from the private placement?

The proceeds from the private placement will be used for regulatory filings, interim readouts, study completions, advancing pipeline programs, and platform development focusing on delivery and machine learning.