10:51 AM EDT, 04/03/2024 (MT Newswires) -- ARCA biopharma (ABIO) and Oruka Therapeutics said Wednesday that they have agreed to merge the companies in an all-stock deal.

On completion, the combined company will operate as Oruka Therapeutics and will be listed on the Nasdaq under the ticker symbol ORKA, according to a joint statement.

Oruka has received a private financing commitment of $275 million in its common stock and pre-funded warrants from healthcare investors led by Fairmount and Venrock Healthcare Capital Partners, the statement said.

The companies expect to close the financing before completion of the merger and funds raised will support Oruka's operations through 2027.

ARCA shareholders will own about 2.4% of the combined company while Oruka shareholders, including investors in the private financing, will own the remaining stake, the statement added.

Additionally, ARCA will contribute $5 million to the combined company and expects to give a pre-merger cash dividend of about $20 million.

Board members of both companies have approved the merger and the transaction is expected to close in Q3.

Current Oruka Chief Executive Lawrence Klein will lead the combined company, the statement said.

ARCA shares surged more than 106% in recent trading.

Price: 3.53, Change: +1.82, Percent Change: +106.43