Inmagene Biopharmaceuticals Completes Reverse Merger with Ikena Oncology to List on Nasdaq with $175M in Combined Capital

Recently, it was announced that Ikena Oncology (Nasdaq: IKNA, hereinafter referred to as “Ikena”), a company listed on the U.S. Nasdaq Stock Market, and Inmagene Biopharmaceuticals (hereinafter referred to as “Inmagene Bio”) have entered into a definitive merger agreement. The merger will generate $175 million (over RMB 1.2 billion) in funding to support the further development of IMG-007, including a $75 million oversubscribed private investment in public equity (PIPE). IMG-007 is a monoclonal antibody targeting OX40 for the treatment of atopic dermatitis.

Ikena has entered into subscription agreements with new investors, including Deep Track Capital, Foresite Capital, and RTW Investments. In addition, existing shareholders of Ikena, such as BVF Partners LP, Blue Owl Healthcare Opportunities, Omega Funds, and OrbiMed, also participated in this PIPE subscription.

It is reported that following the completion of the merger and financing, the company will operate under the name ImageneBio. Existing shareholders of Ikena Oncology are expected to hold approximately 34.8% of the shares in the merged entity. Shareholders of ImageneBio are projected to own about 43.5%, while financing investors are anticipated to hold roughly 21.7%. In other words, ImageneBio will gain control of the Nasdaq-listed company and achieve a backdoor listing in the U.S. stock market through this transaction.

What makes this transaction particularly notable is that ImageneBio gained controlling interest in the public company following the merger. Furthermore, although Ikena Oncology’s development path was not always smooth, it still held over $100 million in cash on its balance sheet. Combined with the funds raised in the latest financing round, this deal has not only enabled ImageneBio to become a U.S.-listed company but also provided it with substantial capital for future growth.

Wang Jian, the founder of Chuanxiang Biopharma, holds a Ph.D. in Neurobiology from Columbia University and an MBA from Stanford University. However, he is perhaps better known in the industry as an investor. Wang Jian previously served as a Global Partner at OrbiMed and as the Founding Partner of OrbiMed Asia. During his 12-year tenure at OrbiMed, he co-founded and managed a $1.1 billion private equity and venture capital fund.

With over 20 years of investment experience in the biomedicine sector, Wang Jian has previously served as Chairman of publicly listed companies such as Apollomics and Angelalign. He has invested in nearly 60 startups, including Zai Lab and Gracell Biotechnologies. Leveraging his extensive investment expertise and resources, Mr. Wang founded AcceGen Biotechnology in 2019. The company successfully closed a $21 million Series B financing round in 2020, just one year after its establishment, and secured a $100 million Series C financing round in June 2021, less than a year later. Current shareholders of AcceGen Biotechnology include Vertex Venture Holdings, Ruifu Ventures, HighTide Capital, Kunlun Capital, Zhongnan Ventures, and DP Asset Management, among other institutional investors.

Well-versed in the capital operation model of “leveraging strength against strength,” Wang Jian has employed various strategies to drive the global expansion of his portfolio’s pipeline.

It is worth noting that Chuanxiang Biopharma had already practiced the Newco overseas expansion model, which gained significant prominence in 2024, back in September 2023. At that time, Chuanxiang Biopharma collaborated with the U.S. company Aditum Bio to establish Celexor Bio. Under the terms of the collaboration, Celexor Bio obtained exclusive global rights to develop, manufacture, and commercialize IMG-018 (a monoclonal antibody targeting Immunoglobulin-like Transcript 7 [ILT7] with potent plasmacytoid dendritic cell [pDC] depletion capabilities, later renamed CLXR-901) from Chuanxiang Biopharma’s portfolio. According to the agreement, Chuanxiang Biopharma received an upfront payment and is eligible for up to $287 million in development and sales milestone payments, as well as future royalties on product sales.

For Ikena, the merger is aimed at fostering better growth.

In early 2024, Ikena terminated its collaboration with Bristol Myers Squibb and laid off more than one-third of its workforce. By May of the same year, the situation had not improved; Ikena adopted a strategy similar to that of other biotech companies—slashing its pipeline. This led to the suspension of development for its lead asset, a selective TEAD1 inhibitor targeting the Hippo pathway, and resulted in layoffs affecting more than half of the remaining employees. Although its core pipeline failed to achieve success, the Ikena team remains strong overall, and public disclosures indicate that the company still holds over $130 million in cash.

When Chuangxiang was founded five years ago, the oncology R&D boom was sweeping the market, yet Chuangxiang Biopharma charted a unique course by pioneering the development of autoimmune disease therapeutics.

Interestingly, IMG-007, the pipeline asset that will be the focus of R&D following this merger, is not ImageneBio’s inaugural pipeline. The story dates back to January 2021, when Hutchmed (HCM.US, 0013.HK) entered into a strategic collaboration with ImageneBio to further develop four candidate drugs discovered by Hutchmed for the treatment of various immune-mediated diseases. Under the partnership, the two companies planned to advance these candidates toward Investigational New Drug (IND) applications. According to the terms of the agreement, Hutchmed granted ImageneBio exclusive options to license the four candidate drugs for the treatment of immune-mediated diseases.

In February 2024, both parties announced the exercise of options related to the licensing of two candidate drugs under the aforementioned agreement. ImageneBio selected IMG-007 and IMG-004, thereby securing the rights to further develop, manufacture, and commercialize these two pipelines globally.

IMG-007 is currently the only non-depleting anti-OX40 monoclonal antibody in clinical development worldwide, with potential applications across a broad range of inflammatory indications, including atopic dermatitis, asthma, hidradenitis suppurativa, and systemic sclerosis. IMG-007 targets the OX40 receptor through a unique mechanism that does not deplete T cells, and its long half-life positions it as a best-in-class candidate.

OX40 is a member of the tumor necrosis factor receptor superfamily, primarily expressed on the surface of activated T cells. Upon binding to its ligand OX40L, it activates downstream immune responses, promoting T cell survival, differentiation, and immune activation. Currently, drug development targeting OX40 focuses on two areas: OX40 agonists are mainly developed for cancer therapy to enhance tumor-specific effector T cell immune responses and improve tumor cell killing; OX40/OX40L antagonists are primarily developed for the treatment of autoimmune diseases, inhibiting excessively activated immune responses in autoimmune conditions by blocking the interaction between OX40 and OX40L.

It is worth noting that, compared with traditional autoimmune targets, OX40/OX40L offers unique advantages: the OX40 pathway acts upstream in the immune response, enabling OX40/OX40L antagonists to broadly suppress multiple autoimmune-related signaling pathways with more durable effects.

In May 2024, ImageneBio announced that its anti-OX40 monoclonal antibody, IMG-007, had yielded positive interim results from a Phase 2a clinical study in patients with atopic dermatitis. The Phase 2a study enrolled a total of 13 patients. Baseline disease characteristics included a mean EASI score of 29.5 and a mean body surface area (BSA) involvement of 52.0%; 61.5% of patients had an Investigator’s Global Assessment (IGA) score of 3, while 38.5% had an IGA score of 4. Additionally, patients who had previously received systemic therapies (e.g., biologics) were included in the study; the use of topical or systemic medications for the treatment of atopic dermatitis was prohibited during the study.

Patients meeting the study criteria received three intravenous infusions of IMG-007 300 mg over a 4-week period (at baseline, Week 2, and Week 4), with follow-up extending to Week 24. The key endpoints of the study included safety and the percentage change from baseline in the Eczema Area and Severity Index (EASI) over time.

Phase 2a data demonstrated that EASI scores showed rapid and significant improvement from baseline as early as Week 1 following treatment with IMG-007, with continued improvement observed after the last dose at Week 4. By Week 20, 69%, 54%, and 31% of patients achieved EASI-50 (≥50% improvement in EASI score from baseline), EASI-75 (≥75% improvement in EASI score from baseline), and EASI-90 (≥90% improvement in EASI score from baseline), respectively.

Notably, IMG-007 demonstrated a favorable safety profile: no serious adverse events (SAEs) occurred during the study, no adverse events led to discontinuation of the study drug, no study drug-related adverse events were reported, and no patients reported fever or chills.

Liu Tianran, a partner at Vertex Ventures, pointed out: “ImageneBio has advanced its OX40-targeting candidate IMG-007 into Phase 2 clinical trials, ranking it third among all OX40 drugs under development globally.” It is worth noting that she was an early investor in ImageneBio. Meanwhile, this acquisition by ImageneBio marks the third healthcare M&A deal she has led on behalf of Vertex Ventures in 2024, following those involving Progenics and Rigel.

When asked why ImageneBio chose to undergo a reverse merger with Ikena Oncology, Liu Tianran stated that while a reverse merger may appear straightforward, its actual execution is far more complex than anticipated.

First, a reverse merger differs from the SPAC model commonly understood in the past; it involves a private company achieving public listing by acquiring a publicly traded company, with the greatest challenge lying in identifying suitable shell resources.

“Behind shell companies are often institutional investors with substantial strength and professional operations,” introduced Liu Tianran. “These top-tier investors have high expectations for the future development of shell companies and are extremely cautious when selecting partners, adhering to very stringent standards.”

She further explained, “High-quality shell companies on the Nasdaq are currently relatively scarce, leading to intense competition; a single high-quality shell may attract bids from over a hundred companies. In such circumstances, the shell companies hold significant bargaining power. That ImageneBio has emerged victorious from this fierce competition underscores its competitiveness and appeal.”

Liu Tianran further stated that Chuangxiang Bio received multiple financing offers this year, including proposals for reverse mergers. These diverse options reflect the market’s strong recognition and trust in Chuangxiang Bio. After careful consideration, Chuangxiang Bio ultimately decided to proceed with a reverse merger. This decision not only demonstrates proactive adaptation to the current market environment but also conveys confidence in the company’s future prospects post-merger.

So, why Innovent Biologics?

“The core remains the innovativeness and market competitiveness of the pipeline.”

In Liu Tianran’s view, the fundamental logic for selecting acquirers is highly consistent with that for investing in primary market enterprises.

“For an innovative pharmaceutical company to excel, its R&D pipeline must directly address well-defined clinical unmet needs, offering solutions that are significantly superior to existing therapies. This involves not only the efficacy and safety of the product but also multiple dimensions such as health economics and patient adherence. Furthermore, the product’s positioning in terms of novel mechanisms of action and the competitive landscape determines its market potential and long-term value.”

Liu Tianran further pointed out that the competitiveness of a company’s core pipeline products, as well as its positioning within the global R&D landscape, are key to securing favorable leverage in negotiations. This means that companies must not only maintain a leading edge in technological innovation but also possess a deep understanding of and the ability to rapidly respond to market dynamics, competitors’ strategies, and shifts in global healthcare needs.

Chuangxiang Biopharma’s successful completion of this reverse merger is primarily attributable to the distinct advantages of its products in addressing critical clinical unmet needs, as well as the strong competitiveness and market potential demonstrated within the global competitive landscape.

“This transaction represents a significant turning point and milestone for Chuangxiang, carrying profound strategic significance,” commented Liu Tianran.

First, Triumvira Immunologics’ adaptability in a dynamic market environment has been validated through this transaction. The swift strategic pivot by a Chinese innovative drug company in response to challenges in its R&D pipeline, ensuring the company’s continued forward momentum, serves as a benchmark case. It also underscores the importance for startups to identify the right direction early in the industry’s development and proactively establish a diversified pipeline portfolio.

Secondly, this transaction provides a significant reference for the development trends of the pharmaceutical industry in 2024, reflecting the flexibility and diversity of capital providers and enterprises in investment decisions and exit strategies. Such flexibility not only helps enterprises seek new growth opportunities in an uncertain market but also offers investors more diverse pathways for investment returns.

In recent years, the exit strategies and development trajectories of domestic biotechnology (biotech) companies have undergone significant changes. Initially, many biotech firms tended to establish partnerships with large pharmaceutical companies or other biotechnology firms, adopting models such as joint research and development or licensing agreements. This strategy enabled companies to share R&D risks and costs without fully relinquishing ownership of their technologies or products, while also securing cash flow and a share of future revenues.

However, as the industry continues to develop and the market gradually matures, large foreign pharmaceutical companies and listed firms have begun to rapidly acquire innovative technologies and products by merging with or acquiring domestic biotech companies and their R&D pipelines. This trend has become increasingly active since late last year, marking the international market’s recognition and emphasis on Chinese biotechnology. Such mergers and acquisitions not only provide biotech companies with necessary financial and resource support but also accelerate the commercialization of their products and facilitate investor exits.

“In recent years, there has been a continuous emergence of license-out deals for Chinese innovative drugs featuring substantial upfront payments, and cross-border mergers and acquisitions have become increasingly active. This trend essentially reflects the growing international recognition of original innovative drugs developed in China. This shift will not only help elevate the overall standards of the domestic biotechnology industry but also accelerate China’s participation in global healthcare initiatives, thereby fostering globalization of innovation,” summarized Liu Tianran.