Reneo Pharma to merge with OnKure

California, USA-based rare disease company Reneo Pharmaceuticals (Nasdaq: RPHM) saw its shares fall 12.2% to $1.59 yesterday, when it announced it has entered into a definitive merger agreement with privately-held OnKure to combine the companies in an all-stock transaction.

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 I clinical trial for the treatment of solid tumors. Upon completion of the transaction, the combined company is expected to operate under the name OnKure Therapeutics, and trade on the Nasdaq Global Market under the ticker symbol “OKUR”.

Pre-merger Reneo stockholders are expected to own about 31% of the combined company, and pre-merger OnKure stockholders are expected to own around 69% of the combined company, upon the closing of the merger, exclusive of the PIPE financing.