08:25 AM EDT, 05/13/2024 (MT Newswires) -- Reneo Pharmaceuticals ( RPHM ) and OnKure said Monday they entered into a merger agreement in an all-stock transaction.

The combined company will focus on advancing OnKure's potential breast cancer treatments and pipeline of solid tumor oncology therapies.

As part of the merger, Reneo Pharmaceuticals ( RPHM ) has secured $65 million in public equity financing from a group of institutional investors including Acorn Bioventures, Cormorant Asset Management, Deep Track Capital, Perceptive Advisors, Samsara BioCapital, Citadel's Surveyor Capital, and Vestal Point Capital.

The deal has already been approved by the boards of directors of both companies and is expected to close this year subject to customary closing conditions, shareholder approval, and a stipulation that Reneo Pharmaceuticals ( RPHM ) have at least $55 million in cash at closing in addition to the private equity investment.

Reneo's current stockholders are expected to own approximately 31% of the combined company, and OnKure stockholders the rest, though the percentages may be adjusted at closing, a statement said,

The merged entity is expected to hold approximately $120 million of cash and cash equivalents at closing, operate under the brand OnKure Therapeutics, trade on Nasdaq under the OKUR ticker symbol, and be led by Onkure Chief Executive and President Nicholas Saccomano.

Shares of Reneo were up nearly 5% in recent Monday premarket activity.

Price: 1.9093, Change: +0.10, Percent Change: +5.49