Reneo Pharmaceuticals Announces Stockholder Approval of Merger with OnKure

Rhea-AI Summary

Reneo Pharmaceuticals (Nasdaq: RPHM) announced that its stockholders approved the proposed merger with OnKure, Inc. at a special meeting on September 26, 2024. The merger is expected to close around October 4, 2024. Key points:

• The combined company will be renamed OnKure Therapeutics, Inc. and trade under the ticker 'OKUR' on Nasdaq
• OnKure's management team will lead the combined company
• Focus will be on advancing OnKure's pipeline, including OKI-219 in Phase 1 trials for solid tumors
• Reneo will implement a 1-for-10 reverse stock split prior to the merger
• Trading under the new ticker is expected to begin on October 7, 2024

The reverse split will consolidate every 10 shares into 1, with cash payments for fractional shares. Stockholders do not need to take action, as positions will be automatically adjusted.

Positive

• Merger approval by stockholders indicates support for the strategic direction
• Combined company to focus on advancing OnKure's oncology pipeline, potentially expanding market opportunities
• Listing on Nasdaq under new ticker 'OKUR' maintains access to public markets
• 1-for-10 reverse stock split may help meet Nasdaq listing requirements and potentially attract institutional investors

Negative

• Reverse stock split reduces the number of outstanding shares, which may be viewed negatively by some investors
• Change in management team and company focus may lead to uncertainty and potential loss of existing Reneo shareholders
• Merger and reverse split processes may cause short-term stock price volatility

Insights

Financial Analyst

The merger between Reneo Pharmaceuticals and OnKure marks a significant strategic shift, transforming Reneo into OnKure Therapeutics with a focus on oncology. This move could potentially revitalize the company's prospects, particularly given OnKure's pipeline targeting PI3Kα mutations. The 1-for-10 reverse stock split is a notable financial maneuver, often used to boost share price and maintain Nasdaq listing requirements.

Key points to consider:

• The combined entity will trade under the ticker "OKUR", signaling a fresh start in the market.
• OnKure's management will lead the new company, bringing their expertise in oncology drug development.
• The lead program OKI-219 in Phase 1 trials for solid tumors could be a significant value driver if successful.
• The reverse split may improve the stock's appeal to institutional investors but also reduces the number of outstanding shares.

While this merger could open new opportunities, investors should closely monitor the progress of OnKure's clinical pipeline and the market's reception to the new entity post-merger.

Oncology Research Analyst

The merger between Reneo and OnKure represents a strategic pivot towards oncology, specifically targeting PI3Kα mutations. This is a promising area of research, as PI3Kα is frequently mutated in various cancers and plays a important role in cell growth and survival pathways.

Key considerations for investors:

• OnKure's lead candidate, OKI-219, targeting solid tumors, is currently in Phase 1 trials. This early-stage asset carries both high potential and significant risk.
• The PI3Kα inhibitor space is competitive, with several big pharma companies already having approved drugs or candidates in late-stage development.
• Success in this field could lead to substantial market opportunities, given the prevalence of PI3Kα mutations across multiple cancer types.

Investors should closely follow the progress of OKI-219 and any subsequent pipeline expansions. The merger's success will largely depend on the clinical outcomes and the new management's ability to navigate the complex oncology drug development landscape.

– Combined company to trade on Nasdaq under ticker “OKUR”

– Reneo announces 1-for-10 reverse split of common stock

IRVINE, Calif., Oct. 02, 2024 (GLOBE NEWSWIRE) -- Reneo Pharmaceuticals, Inc. (Nasdaq: RPHM) (“Reneo”) today announced the results of the special meeting of its stockholders held on September 26, 2024. At the special meeting, Reneo’s stockholders voted in favor of all proposals, including the proposals required to complete the proposed merger of Reneo and OnKure, Inc. (“OnKure”).

The closing of the merger is anticipated to take place on or around Friday, October 4, 2024. Following the closing of the merger, the combined company plans to change its name from “Reneo Pharmaceuticals, Inc.” to “OnKure Therapeutics, Inc.” and trade on The Nasdaq Global Market under the ticker symbol “OKUR.” The combined company will be led by OnKure’s existing management team. The combined company will focus on advancing OnKure’s pipeline candidates targeting oncogenic mutations in phosphoinositide 3-kinase alpha (PI3Kα), including its lead program OKI-219, which is currently in a Phase 1 clinical trial for the treatment of solid tumors.

In addition, Reneo also announced that it will effect a 1-for-10 reverse split of its common stock that is expected to be effective immediately prior to the closing of the merger. The combined company’s common stock is expected to be reclassified as Class A common stock immediately prior to the closing of the merger. It is expected that the combined company's common stock will commence trading on a split-adjusted basis, and after giving effect to the merger, under the ticker symbol “OKUR” at the open of trading on October 7, 2024, under a new CUSIP number (68277Q 105).

On September 26, 2024, Reneo stockholders approved the reverse stock split and gave Reneo’s board of directors discretionary authority to select a ratio for the reverse stock split ranging from 1-for-7 to 1-for-15. Reneo’s board of directors approved the reverse stock split at a ratio of 1-for-10 on September 27, 2024.

Upon effectiveness of the reverse stock split, every 10 shares of Reneo’s common stock issued and outstanding or held as treasury shares as of such date will be automatically combined into one share of Reneo common stock. The reverse stock split will have no effect on the number of shares of Reneo common stock authorized for issuance or on the par value of Reneo’s common stock.

Outstanding Reneo equity-based awards under Reneo’s equity plans will be proportionately adjusted. No fractional shares will be issued in connection with the reverse stock split and following the effective time of the reverse stock split, and upon the surrender of any Reneo stockholders’ certificate(s) (if any), Reneo will pay cash to any such holder(s) of fractional shares of Reneo’s common stock an amount equal to such fractional shares multiplied by the fair value of Reneo’s common stock on the date of the reverse split, as determined by Reneo’s board of directors.

Reneo’s transfer agent, Equiniti Trust Company, LLC, will maintain the book-entry records for Reneo’s common stock. Registered stockholders holding pre-split shares of Reneo’s common stock electronically in book-entry form are not required to take any action to receive post-split shares or payment for fractional shares. Stockholders owning shares via a broker, bank, custodian or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to such broker’s particular processes, and will not be required to take any action in connection with the reverse stock split. Such beneficial holders are encouraged to contact their broker, bank or custodian with any procedural questions.

About OnKure

OnKure, Inc. is a clinical-stage biopharmaceutical company focused on the discovery and development of best-in-class precision medicines that target biologically validated drivers of cancers that are underserved by available therapies. Using structure-based drug design portfolio, OnKure is building a pipeline of tumor-agnostic candidates that are designed to achieve optimal efficacy and tolerability. OnKure is currently developing OKI-219, a selective PI3Kα^H1047R inhibitor, as its lead program. OnKure aims to become a leader in targeting oncogenic PI3Kα and has multiple programs designed to enable best-in-class targeting of this key oncogene.

About Reneo Pharmaceuticals

Reneo is a pharmaceutical company historically focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, express or implied statements regarding the timing, completion and impacts of the proposed merger between Reneo and OnKure, the expected management of the combined company, the development of the combined company’s current and future product candidates, the future operations of the combined company, the timing and completion of the reverse stock split and other statements that are not historical fact. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements generally are accompanied by words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “goal,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seem,” “seek,” “should,” “target,” “will,” “would,” and similar expressions that indicate future events or trends or that are not statements of historical matters. There can be no assurance that future developments affecting Reneo, OnKure or the proposed merger will be those that have been anticipated.

These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Reneo’s management and are not assurances as to actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances, many of which are outside of the control of Reneo, are difficult or impossible to predict and will differ from assumptions underlying forward-looking statements.

These forward-looking statements are subject to a number of risks and uncertainties, including, among other things: the risk that the conditions to the closing of the proposed merger are not satisfied; uncertainties as to the timing of the closing of the proposed merger and the ability of each of Reneo and OnKure to consummate the proposed merger; risks related to the ability of Reneo and OnKure to correctly estimate and manage their respective operating expenses and expenses associated with the proposed merger pending the closing of the proposed merger; risks associated with the possible failure to realize certain anticipated benefits of the proposed merger, including with respect to future financial and operating results; the potential for the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the proposed merger and any agreements entered into in connection therewith; the possible effect of the announcement, pendency or completion of the proposed merger on Reneo’s or OnKure’s business relationships, operating results and business generally; risks related to the market price of Reneo’s common stock relative to the value suggested by the exchange ratio; unexpected costs, charges or expenses resulting from the proposed merger; the potential for, and uncertainty associated with the outcome of, legal proceedings instituted against Reneo or OnKure or any of their respective directors or officers related to the proposed merger; risks related to OnKure’s early stage of development; the uncertainties associated with OnKure’s product candidates, as well as risks associated with the clinical development and regulatory approval of product candidates, including potential delays in the completion of clinical trials; the significant net losses each of Reneo and OnKure has incurred since inception; the combined company’s ability to initiate and complete ongoing and planned preclinical studies and clinical trials and advance its product candidates through clinical development; the timing of the availability of data from the combined company’s clinical trials; the outcome of preclinical testing and clinical trials of the combined company’s product candidates, including the ability of those trials to satisfy relevant governmental or regulatory requirements; the combined company’s plans to research, develop and commercialize its current and future product candidates; the clinical utility, potential benefits and market acceptance of the combined company’s product candidates; the requirement for additional capital to continue to advance these product candidates, which may not be available on favorable terms or at all; the combined company’s ability to attract, hire, and retain skilled executive officers and employees; the combined company’s ability to protect its intellectual property and proprietary technologies; the combined company’s reliance on third parties, contract manufacturers, and contract research organizations; the possibility that Reneo, OnKure or the combined company may be adversely affected by other economic, business, or competitive factors; risks associated with changes in applicable laws or regulations; those risks and uncertainties more fully described in periodic filings with the U.S. Securities and Exchange Commission (“SEC”), including the factors described in the section titled “Risk Factors” in Reneo’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q, as well as the final proxy statement/prospectus on Form 424(b)(3) filed with the SEC on August 26, 2024; and other risks.

This press release also concerns product candidates that are under clinical investigation and which have not yet been approved for marketing by the U.S. Food and Drug Administration. Such product candidates are currently limited by federal law to investigational use, and no representation is made as to their safety or effectiveness for the purposes for which they are being investigated.

No Offer or Solicitation

This press release is for informational purposes only and is neither an offer to sell, nor a solicitation of an offer to buy or subscribe for, any securities of Reneo or OnKure, nor is it a solicitation of any vote in any jurisdiction with respect to the proposed merger or otherwise.

Contacts:

Investor Relations
Reneo Pharmaceuticals, Inc.
investors@reneopharma.com 

Investor Relations
OnKure, Inc.
Dan Ferry
LifeSci Advisors
daniel@lifesciadvisors.com 

FAQ

When will the merger between Reneo Pharmaceuticals (RPHM) and OnKure close?

The merger between Reneo Pharmaceuticals and OnKure is expected to close on or around Friday, October 4, 2024.

What will be the new ticker symbol for the combined Reneo-OnKure company?

The combined company will trade on The Nasdaq Global Market under the ticker symbol 'OKUR'.

What is the ratio of the reverse stock split for Reneo Pharmaceuticals (RPHM)?

Reneo Pharmaceuticals will implement a 1-for-10 reverse stock split, meaning every 10 shares will be combined into one share.

When will the new combined Reneo-OnKure stock begin trading under the OKUR ticker?

The combined company's stock is expected to begin trading under the ticker symbol 'OKUR' on October 7, 2024.

What will be the focus of the combined Reneo-OnKure company after the merger?

The combined company will focus on advancing OnKure's pipeline candidates targeting oncogenic mutations in PI3Kα, including the lead program OKI-219 for solid tumors.