ARCA biopharma Announces Completion of Merger with Oruka Therapeutics and Implementation of Reverse Stock Split

Rhea-AI Summary

ARCA biopharma (NASDAQ: ABIO) has announced the completion of its merger with Oruka Therapeutics. The combined entity will now operate as Oruka Therapeutics, Inc. and trade on Nasdaq under the symbol ORKA from September 3, 2024.

Following shareholder approval on August 22, 2024, each Oruka share was converted into 6.8569 ARCA shares. Existing ARCA shareholders received a special dividend of $1.613 per share on August 26, 2024.

The company will implement a 1-for-12 reverse stock split on September 3, 2024. Post-split, ARCA shares will be reclassified into Oruka Therapeutics shares, trading under the new CUSIP number 687604108. Fractional shares will be compensated in cash. Stockholders' positions via brokers will be automatically adjusted.

The merger and reverse split became effective on August 29, 2024, at 4:03 pm ET and September 3, 2024, at 12:01 a.m. ET, respectively.

Positive

• Completion of the merger with Oruka Therapeutics.
• Shareholders approved the merger and the reverse stock split.
• Each Oruka share converted to 6.8569 ARCA shares.
• Special cash dividend of $1.613 per share to ARCA shareholders.
• Reverse stock split of 1-for-12 shares effective September 3, 2024.

Negative

• Implementation of a reverse stock split could indicate stock price challenges.
• Shareholder dilution due to conversion of Oruka shares.

Insights

Financial Analyst

The merger between ARCA biopharma and Oruka Therapeutics marks a significant corporate restructuring with several key financial implications. The 6.8569-to-1 share conversion ratio for Oruka shareholders suggests a substantial valuation for Oruka relative to ARCA. The $1.613 per share special dividend to ARCA stockholders is a notable cash distribution, potentially aimed at sweetening the deal for existing shareholders. The upcoming 1-for-12 reverse stock split is likely designed to boost the share price and maintain Nasdaq listing compliance. This move, combined with the ticker change to "ORKA", signifies a complete rebranding and potentially a shift in business focus. While these actions don't guarantee future success, they do provide a clean slate for the combined entity to pursue its strategic objectives.

Market Research Analyst

This merger represents a strategic pivot for ARCA biopharma, potentially diversifying its pipeline and risk profile. The market's reaction will be important to watch, especially given the complexities of the transaction. The reverse split could be viewed positively as a move to attract institutional investors, or negatively if perceived as a way to artificially inflate the stock price. The special dividend might placate ARCA shareholders, but it's essential to consider the impact on the company's cash reserves. Key factors to monitor include:

• Post-merger pipeline synergies
• Management's ability to execute on the new combined strategy
• Investor sentiment towards the rebranded Oruka Therapeutics
• Potential dilution effects on existing ARCA shareholders

These elements will be critical in determining the long-term success of this corporate transformation.

Legal Expert

From a legal standpoint, this merger appears to have been executed with careful attention to regulatory compliance and shareholder rights. The stockholder approval for all merger-related proposals indicates proper corporate governance procedures were followed. The special cash dividend and share conversion ratio suggest efforts to ensure fair treatment of both ARCA and Oruka shareholders. The reverse stock split, while a common practice, requires careful implementation to avoid potential legal challenges related to fractional shares. It's important for the combined company to ensure all SEC filings and disclosures are updated promptly to reflect the new corporate structure, ticker symbol and CUSIP number. Additionally, management should be prepared for potential scrutiny regarding the fairness of the merger terms and any material changes in business strategy or risk profile.

The combined company will operate as “Oruka Therapeutics, Inc.” with its common stock traded on Nasdaq under trading symbol “ORKA” effective Tuesday, September 3, 2024

WESTMINSTER, Colo., Aug. 29, 2024 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (NASDAQ: ABIO) (“ARCA”) today announced completion of the merger with Oruka Therapeutics, Inc. (“Oruka”) following ARCA’s successful receipt of stockholder approval for all proposals related to the merger at a special meeting of stockholders on August 22, 2024. ARCA following the merger is referred to herein as the “combined company.” As previously announced, the combined company will effect a reverse stock split of its common stock subsequent to the merger.

Thomas A. Keuer, President of ARCA said, “We are pleased with the outcome of the special meeting and appreciate our stockholders’ support for the merger with Oruka.”

Pursuant to the terms of the previously disclosed merger agreement, Oruka became a wholly owned subsidiary of ARCA upon completion of the merger, and each outstanding share of Oruka common stock was converted into 6.8569 shares of common stock of ARCA. 

In connection with the closing of the merger, ARCA previously issued a special cash dividend of $1.613 per share of such common stock to ARCA stockholders of record as of August 26, 2024. 

In addition, the combined company will implement a reverse split of its common stock at a ratio of 1-for-12 shares on September 3, 2024. In the reverse stock split, every 12 shares of the combined company’s common stock outstanding will be combined and reclassified into 1 share of the combined company’s common stock.

The combined company’s stockholders will receive cash in lieu of any fractional shares resulting from the reverse stock split. Stockholders owning shares of common stock via a bank, broker, or other nominee will have their positions automatically adjusted to reflect the reverse stock split and will not be required to take further action in connection with the reverse stock split, subject to their brokers’ particular processes. The new CUSIP number for the combined company following the reverse stock split, merger and other attendant transactions is 687604108. 

The merger became effective today at 4:03 pm ET. The reverse stock split will become effective on September 3, 2024 at 12:01 a.m. Eastern Time.

The combined company will operate under the name, Oruka Therapeutics, Inc., and its shares will begin trading on The Nasdaq Global Market on a post-reverse split, post-merger basis under the ticker symbol “ORKA” effective with the open of business on Tuesday, September 3, 2024.

About Oruka Therapeutics 

Oruka Therapeutics is developing novel biologics designed to set a new standard for the treatment of chronic skin diseases. Oruka’s mission is to offer patients suffering from chronic skin diseases like plaque psoriasis the greatest possible freedom from their condition by achieving high rates of complete disease clearance with dosing as infrequently as once or twice a year. Oruka is advancing a proprietary portfolio of potentially best-in-class antibodies that were engineered by Paragon Therapeutics and target the core mechanisms underlying plaque psoriasis and other dermatologic and inflammatory diseases. For more information, visit www.orukatx.com and follow Oruka on LinkedIn. 

Forward Looking Statements 

Certain statements in this press release, other than purely historical information, may constitute “forward-looking statements” within the meaning of the federal securities laws, including for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, express or implied statements relating to the combined company’s expectations, hopes, beliefs, intentions or strategies regarding the future of its pipeline and business including, without limitation, the combined company’s ability to achieve the expected benefits or opportunities with respect to its product candidates, the ultimate profile of products from its program, the potential of its products to become best-in-class drugs and the timing of its reverse split and Nasdaq trading. 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. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments affecting the combined company will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the combined company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those uncertainties and factors described under the heading “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the combined company’s most recent filings with the SEC (including its S-4 Registration Statement). Should one or more of these risks or uncertainties materialize, or should any of the combined company’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth therein 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. The combined company does not undertake or accept any duty to make any updates or revisions to any forward-looking statements. 

Investor Contact:
Alan Lada
650-606-7911
alan.lada@orukatx.com

FAQ

When will ARCA biopharma trade under the new symbol ORKA?

ARCA biopharma will trade under the new symbol ORKA starting September 3, 2024.

What is the conversion rate for Oruka shares to ARCA shares?

Each Oruka share was converted into 6.8569 shares of ARCA common stock.

What is the reverse stock split ratio for ARCA biopharma?

The reverse stock split ratio is 1-for-12, effective September 3, 2024.

What was the special cash dividend issued to ARCA shareholders?

ARCA issued a special cash dividend of $1.613 per share on August 26, 2024.

What is the new CUSIP number for Oruka Therapeutics post-merger?

The new CUSIP number is 687604108.