Ram Aiyar, PhD
Ram Aiyar, PhD
President and CEO, Korro Bio

A pending reverse merger with troubled Frequency Therapeutics is giving new meaning to Korro Bio’s slogan, “Edit the message. Rewrite the future.”

For Korro, a developer of RNA-edited therapies, the challenges of editing and rewriting come down to dollars and sense. To bring its lead therapy—an RNA-edited oligonucleotide designed to treat alpha-1 antitrypsin deficiency (AATD) in the liver—through early clinical trials, Korro recently concluded that it will need at least as much as the $116 million in Series B financing it raised early last year, just as financial markets turned bearish.

Based in Cambridge, MA, Korro says its best prospects for raising that capital will come from a reverse merger with troubled Frequency Therapeutics, through an all-stock transaction that began in mid-July. The combined company will operate as Korro Bio and is applying to Nasdaq to trade its shares publicly under the symbol KRRO. Korro will function as a wholly owned subsidiary of Frequency, which now trades as FREQ on the Nasdaq Global Select Market, and will be the surviving corporation of the merger.

The combined company will continue pursuing the original Korro’s pipeline of wholly-owned RNA-edited therapies for a variety of rare and highly prevalent diseases—including Parkinson’s disease, severe alcoholic hepatitis, amyotrophic lateral sclerosis (ALS), subsets of pain, and cardiometabolic disease.

At the same time, Korro has gained commitments from a syndicate of top-tier investors for a $117-million financing, set to close immediately before completion of the merger, which is expected during the fourth quarter. The new capital will give the combined company a pro-forma cash balance of about $170 million in cash, cash equivalents, and marketable securities by the time the deal closes. The balance is expected to provide Korro a cash runway through several milestones and into 2026.

Reverse gear

“Our first goal was to capitalize this company. The second goal was to be public by the second half early next year,” explained Vineet Agarwal, Korro’s chief financial officer. “As a public company, I think there is more optionality for us in progressing the pipeline and raising more capital subsequently. So, this transaction is just a step in the process to get there.”

Korro considered going public through an initial public offering (IPO) before opting instead for a reverse merger, in which a smaller, private company acquires a larger, publicly listed company. According to insurance brokerage and consulting firm Woodruff Sawyer, reverse mergers offer private companies a faster way to go public while bypassing many time-consuming and complex steps of traditional IPOs—a market that has continued to lag with only 13 biotechs going public this year—though four have done so since July 1.

“We needed an additional, call it $150 million, to get into clinical data” for the AATD treatment, Agarwal recalled. “Earlier this year, with our board of directors, we asked, what are the different paths we can go into? One was a straight IPO. The second part that we were also exploring was a reverse merger road because it gets you public. It gets you the financing; the end result is the same.

“And when we found Frequency as a willing partner, where they were exploring other kinds of opportunities as well, we concluded it was very actionable, and we were able to capitalize this company with $170 million at close, which is where we wanted to be,” Agarwal added.

He said the additional details on the reverse merger will be disclosed when Frequency files a Form S-4 with the U.S. Securities and Exchange Commission. Such forms are required to be filed by a publicly traded company to register any material information related to a merger or acquisition, as well as companies offering securities in place of cash.

Performing OPERA

The better capitalized the combined company, added Korro’s president and CEO Ram Aiyar, PhD, the further it can advance its pipeline of RNA editing-based treatments based on Korro’s proprietary platform called OPERA™—short for Oligonucleotide Promoted Editing of RNA.

Through OPERA, Korro can use a proprietary engineered oligonucleotide to introduce precise edits in RNA through a single base change. By precisely and transiently editing the genetic mutation in RNA rather than permanently altering DNA, Korro reasons that it can avoid harmful effects of permanent DNA-based genome editing, such as off-target edits.

For patients, Korro says, OPERA-created treatments will deliver the functional benefits of gene therapy with a transient, titratable and specific treatment regimen, thus advancing genetic medicines beyond rare genetic diseases into more common diseases affecting larger patient populations.

“OPERA as a platform, and RNA editing as a modality is going to revolutionize how we develop medicines for certain indications,” Aiyar declared. “To really provide the best opportunity for patients and ensuring that we can move a pipeline of programs, it was imperative for us to 1) raise the capital, 2) get to showing proof of concept with our lead indication, which is alpha 1, but also 3), expand the pipeline to go after targets and indications that you can’t with traditional modalities.”

Later this year, Korro plans to nominate an oligonucleotide as its lead development candidate for treatment of AATD, a genetic disorder characterized by a lack of alpha-1 antitrypsin (A1AT), which can result in severe progressive lung and liver disease. There are some 100,000 AATD patients in the U.S.

Using an established intravenous lipid nanoparticle (LNP)-based delivery system, the AATD development candidate will be designed to repair inherited mutations and restore production of normal functional A1AT in the liver, by harnessing the body’s ADAR natural base editing system. Korro is drawing upon the LNP technology of Genevant Sciences, through a collaboration of undisclosed value announced in March.

“The Genevant collaboration has been extremely fruitful,” Aiyar said. “We’ve made tremendous progress with them in terms of getting a development candidate in the next couple of months. The product candidates that we’re working on are showing tremendous promise from a potency and durability perspective. We’ll start IND-enabling studies in a reasonably short timeframe.”

ADAR, short for adenosine deaminase acting on RNA, is a family of proteins that catalyzes the posttranscriptional conversion of adenosine to inosine (A-to-I) specifically in double-stranded RNA, which can lead to the creation of missense mutations in coding sequences. By harnessing ADAR, OPERA makes targeted edits using a combination of oligo discovery, chemistry and data-driven design with clinically validated delivery vehicles, all with the aim of developing highly selective RNA editing product candidates.

Beyond knockdown

“When we think about editing, we don’t want to knock down a protein. We want to change the protein’s function so that it’s either repaired back to its original self, or it gives it additional function to be able to do something that it hasn’t been able to do before,” Aiyar said.

According to Korro, its AATD program has demonstrated proof of concept in preclinical models that have shown an increase of normal A1AT protein to 85% of total protein in circulation. Studies in mice and non-human primates have demonstrated high editing efficiency and expression of functional A1AT protein.

Korro says it plans to submit a regulatory filing to launch clinical trials for the AATD candidate in the second half of 2024, and potentially report data from its first clinical study in the second half of 2025.

AATD is one of six wholly-owned programs Korro says it will initially focus on developing.

“Our current focus is going into the liver, and we have a couple of different ways to go into hepatocytes,” Aiyar said. “The next focus is to go into areas of the central nervous system. And there are specific tissues that we can go after based over delivery.”

Beyond the liver and CNS, Korro plans to expand into other tissue types, pursuing partnerships that will focus on targets as well as delivery mechanism. “We haven’t disclosed anything yet, in terms of additional tissue types,” Aiyar said. “We want to show that this technology works in the clinic first, which is why our focus is on our lead indication and showing that in the liver we can deliver it.”

Riding the wave

Korro is among a small but growing number of companies focused on developing therapies based on RNA editing.

Last week, Wave Life Sciences said it expects to submit clinical trial applications “imminently” for lead candidate WVE-006, which the company hopes will be the first RNA editing therapeutic candidate to reach the clinic. WVE-006 is a first-in-class, GalNAc-conjugated RNA editing candidate which, like Korro’s lead candidate, is also designed to treat AATD by restoring functional wild-type AAT protein and reducing Z-AAT protein aggregation—giving the treatment the potential of modifying disease in both the lung and liver, according to Wave.

Shape Therapeutics (ShapeTX), which develops programmable RNA therapies using artificial intelligence, presented research at the American Society of Gene and Cell Therapy (ASGCT) Annual Meeting in May showing how it combined high-throughput screening with machine learning to design a guide RNA capable of applying ADAR to selectively edit multiple adenosines.

Meanwhile, ADARx Pharmaceuticals includes precise editing of a single base among approaches designed to target RNA. Its lead candidate, ADX-324, is a short interfering RNA designed to treat hereditary angioedema by reducing the production of the PKK protein. ADX-324 is under study in a Phase I trial (NCT05691361) that dosed its first patient in January.

The RNA-editing therapies being developed by Wave, ShapeTX and other companies differ from the treatments of established RNA drug developers like Alnylam Pharmaceuticals and Ionis Pharmaceuticals—while RNA base editing differs from the DNA focus applied by bigger-name base editing companies such as Beam Therapeutics and Verve Therapeutics.

Beam’s pipeline is led by two Phase I/II ex-vivo base editing candidates: BEAM-101 for sickle cell disease (SCD) and beta thalassemia; and BEAM-102, designed to treat SCD by directly correcting the causative point mutation in the beta globin gene.

Verve, which specializes in gene editing therapies for cardiovascular disease, is building a pipeline of single-course in vivo gene editing programs led by VERVE-101, a treatment for Heterozygous Familial Hypercholesterolemia (HeFH) that became the first in vivo base editing therapy to reach the clinic last year. VERVE-101 consists of an adenine base editor messenger RNA that Verve has licensed from Beam, plus an optimized guide RNA targeting the PCSK9 gene packaged in an engineered lipid nanoparticle.

Transient focus

Does Korro consider itself a base editing company?

“I would say that it is a transient base editing company. But there are passionate DNA folks that, when you think about base editing, they only think about DNA rather than RNA, even though we edit a single base on RNA,” Aiyar said. “That’s where the RNA editing piece of Korro is very exciting, because we are not trying to compete with the Alnylams and the Ionises of the world, or the Verves and the Beams of the world. Our focus is, how do you make a single point mutation, change the protein or increase the protein, and have an effect on biology?”

Korro Bio was established in 2018 to commercialize research by Josh Rosenthal, PhD, a neurobiologist at the Marine Biological Laboratory (MBL), whose research into how marine organisms adapt to the physical environment led him to focus on editing RNA transcripts in a cell, potentially altering the proteins produced by that cell.

Rosenthal, who remains an advisor to Korro, is one of four people who founded the company, along with:

  • Nessan Bermingham, PhD, Korro’s executive chairman, and a serial biotech entrepreneur and investor. Appearing on the “Close to the Edge” video series, he discussed Korro and several other companies he co-founded, including Triplet and Intellia Therapeutics.
  • Jean-François Formela, MD, a partner at Atlas Venture and a board member of Korro.
  • Andrew Fraley, PhD, whose executive experience includes a senior role at Moderna, where he enabled development of modified messenger RNA.

“When they started off, they knew all the pluses that were involved with DNA-mediated CRISPR-Cas9 systems. Then, they began to think about, How can you alleviate some of those challenges with RNA-mediated editing?” Aiyar said. “The understanding is that without touching any genomic material, without creating any permanent off-target effects, without having challenges from a delivery standpoint because of a complicated drug product that you’d have for DNA editing, that’s where this platform was born.”

Aiyar joined Korro as CEO in 2020 from Corvidia Therapeutics, a cardio-renal drug developer that he co-founded. Aiyar was chief financial officer and chief business officer at Corvidia, which Novo Nordisk acquired that year for up to $2.1 billion.

Aiyar and Agarwal are among seven senior executives who will lead the combined company. The other five are: Steve Colletti, PhD, chief scientific officer; Todd Chappell, senior vice president, strategy and portfolio planning; Shelby Walker, senior vice president, general counsel; Venkat Krishnamurthy, PhD, senior vice president, head of platform; and Stephanie Engels, senior vice president, HR, people and culture.

The reverse merger is set to close in the fourth quarter, subject to customary closing conditions that include approval by Frequency Therapeutics’ stockholders. Frequency shareholders will own approximately 8% of the combined company; the remaining roughly 92% of the stock will be held by shareholders of Korro pre-merger, plus buyers of shares in the private financing. However, the percentage that Frequency Therapeutics stockholders will own may change based on how much net cash that company has when the deal closes.

The value of the reverse merger has yet to be set. While Korro Bio has been ascribed an aggregate equity value of approximately $325.6 million, according to a regulatory filing, Frequency’s equity value will be based on the value of its net cash, which won’t be known until the merger closes.

Off pitch

For Frequency, the reverse merger with Korro Bio caps a turbulent six months triggered by the failure of its lead candidate, FX-322, in a Phase IIb trial (FX-322-208; NCT05086276) in patients with acquired Sensorineural Hearing Loss (SNHL). FX-322 missed the study’s primary efficacy endpoint of an improvement in speech perception, with data showing no statistically meaningful difference in improved speech perception at day 90. The failure sent Frequency shares cratering 81% on February 13, from $3.93 to 77 cents, with shares around that price since then.

Frequency eliminated more than half of its workforce last February soon after the trial failure, and chopped the remainder by 55 percent in May—some 38 jobs, based on its most recent Form 10-K annual report. Frequency is also exploring strategic alternatives for its sole remaining pipeline program, which it has discontinued—a preclinical remyelination program focused on treating multiple sclerosis. (That program was expected to enter the clinic late this year, then the first half of 2024). If Frequency cannot find a buyer or partner for this program, Frequency shareholders will receive a contingent value right (CVR) per share they own that they could exchange for cash.

Frequency’s CEO David L. Lucchino is joining the seven-member board of the combined company. Four of the new board’s members will be designated by Korro, while two will be independent directors.

Two directors of Korro’s current board have agreed to resign: Alex Silverstein, portfolio manager at Point72, and Jordan Baumhardt, PhD, a research analyst and principal at Eventide Asset Management. Point72 and Eventide are among investors that joined to raise the concurrent $117 million financing, along with Atlas Venture, NEA, Platanus, Qiming Venture Partners USA, MP Healthcare Venture Management, Fidelity Management & Research Company LLC, Invus, Verition Fund Management, Monashee Investment Management, Sixty Degree Capital, and additional unnamed investors. Surveyor Capital (a Citadel company) and Cormorant Asset Management co-led the financing.

Korro has a workforce of about 85 people. Agarwal said the combined company does not expect to expand its staff or relocate from the current Korro’s home base.

“Getting this financing doesn’t mean that we need to grow significantly or exponentially here. We have to be disciplined and see where we need growth. So we did build on a lot of infrastructure on the people side over the last year and a half and I think we’re well set there,” Agarwal said. “Our goal is to be in one place, and that place for now is going to be Cambridge.”

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