Estrella Biopharma, Inc. and TradeUP Acquisition Corp. have entered into a definitive business combination agreement that will result in Estrella becoming a publicly listed company.
Upon closing of the transaction, TradeUP will be renamed Estrella Immunopharma, Inc.
Estrella Biopharma is a preclinical-stage biopharmaceutical company developing CD19-targeted ARTEMIS T-cell therapies under certain license agreements with the capacity to address treatment challenges for patients with blood cancers and solid tumors.
Estrella Biopharma’s lead product candidate, EB103, a CD19-Redirected ARTEMIS T-cell therapy, targets CD19, a protein expressed on the surface of almost all B-cell leukemias and lymphomas. Estrella is also developing EB104, a CD19/22 duel-targeting ARTEMIS T-cell therapy, which targets both CD19 and CD22, a protein expressed on the surface of mature B lymphocytes.
EB103 and EB104 utilize the ARTEMIS Cell Receptor Platform technologies Estrella Biopharma in-licensed from Eureka Therapeutics, Inc. earlier this year. Estrella Biopharma is also collaborating with Imugene Ltd and its product candidate, CF33-CD19t, an oncolytic virus, which forces solid tumor cells to express a CD19 target, to treat solid tumors in a “Mark and Kill” strategy.
Estrella Biopharma’s president and CEO, Cheng Liu, and the current management team will continue to lead the combined company. Liu will also continue in his role as president and CEO of Eureka.
“Estrella is committed to making a meaningful difference in areas of unmet medical needs by continuing advancing our pipeline programs into the clinics. The team is confident that fueled by ARTEMIS technologies, EB103 and EB104 have the potential to address blood cancers while mitigating safety concerns. Meanwhile, we plan to extend the use of our CD19 ARTEMIS® T-cell therapy into diverse solid tumors by combining with Imugene’s CF33-CD19t in the novel “Mark and Kill” approach,” Liu said.
Providing resources to Estrella
Weiguan Yang, co-CEO of TradeUP, said: “We are truly excited about the merger with Estrella. Estrella represents a rare opportunity to further advance T-cell therapies in minimizing life-threatening side effects such as cytokine release syndrome and has the potential to address blood cancers while mitigating safety concerns.
“The collaboration with Imugene is expected to tackle the major challenge for current T-cell therapies in solid tumor treatment. We believe this business combination will provide Estrella or the combined company the financial resources to continue developing its lead drug candidate and bring its novel therapies to fruition.”
Transaction overview
The pro forma equity valuation (assuming no redemptions) of the combined company is expected to be approximately $398.5 million. Estimated cash proceeds to the combined company from the transaction are expected to consist of TradeUP’s approximately $45.4 million of cash in trust (assuming no redemptions).
Upon closing of the transaction, and assuming none of TradeUP’s public stockholders elect to redeem their shares of common stock and no additional shares of common stock are issued upon the closing of the transaction, it is anticipated TradeUP’s public stockholders would retain an ownership interest of approximately 11.1% in the combined company. The sponsors, officers, directors and other holders of TradeUP founder shares will retain an ownership interest of approximately 3.6% of the combined company, and Estrella stockholders will own approximately 81.6% of the combined company.
The board of directors of each of TradeUP and Estrella Biopharma as well as stockholders of Estrella Biopharma approved the transaction, which is expected to close in the first half of 2023. The transaction will require the approval of the stockholders of TradeUP and is subject to other customary closing conditions including the receipt of certain regulatory approvals.