WESTMINSTER, Colo. - ARCA biopharma, Inc. (NASDAQ:ABIO), a biopharmaceutical company, has announced the completion of its merger with Oruka Therapeutics, Inc., effective today at 4:03 pm ET. The merger follows ARCA's stockholder approval on August 22, 2024, and has resulted in Oruka becoming a wholly owned subsidiary of ARCA.
As part of the merger terms, each share of Oruka common stock has been converted into 6.8569 shares of ARCA common stock. ARCA stockholders of record as of August 26, 2024, were also issued a special cash dividend of $1.613 per share.
Additionally, the combined company will undergo a reverse stock split at a ratio of 1-for-12 shares on September 3, 2024. In this split, every 12 shares of existing common stock will be combined into one share, with stockholders receiving cash in lieu of any fractional shares. Shareholders who hold their shares through banks, brokers, or other nominees will not need to take any action as their shares will be automatically adjusted.
The combined entity will operate under the name Oruka Therapeutics, Inc. and will trade on The Nasdaq Global Market under the new ticker symbol ORKA beginning with the market opening on September 3, 2024. The new CUSIP number for the combined company's common stock following the reverse stock split and merger is 687604108.
Oruka Therapeutics focuses on developing novel biologics for the treatment of chronic skin diseases, aiming to provide patients with significant relief from conditions such as plaque psoriasis with infrequent dosing. The company is working on advancing a proprietary portfolio of antibodies targeting the core mechanisms underlying dermatologic and inflammatory diseases.
This merger is based on a press release statement and includes forward-looking statements regarding the combined company’s expectations for its product pipeline and business prospects. However, these statements are not guarantees of future performance and involve risks and uncertainties.
Investors are advised that the forward-looking statements in the press release are based on current beliefs and expectations, subject to risks and uncertainties that could cause actual results to differ materially. The company has not made any updates or revisions to the forward-looking statements contained in the press release.
In other recent news, ARCA biopharma has announced a special cash dividend of $1.59 per share in connection with its proposed merger with Oruka Therapeutics. The dividend, contingent on stockholder approval of the merger, is set to be distributed to stockholders of record as of August 26, 2024. The merger with Oruka Therapeutics, a company developing novel biologics for chronic skin diseases, is expected to close later this month, pending stockholder approval and satisfaction of all conditions under the merger agreement.
These recent developments also include an amendment to the Subscription Agreement with Oruka Therapeutics. The amendment corrects a clerical error in the definition of "Purchase Price" within the original agreement. Following this adjustment, the parties entered into an Amended and Restated Subscription Agreement, which includes provisions for the issuance of warrants to certain employees and service providers of Oruka.
The merger is anticipated to enhance the combined company's capabilities and resources, aligning with ARCA's precision medicine approach and Oruka's mission to provide innovative treatments. These are the latest developments in the ongoing merger process between ARCA biopharma and Oruka Therapeutics.
InvestingPro Insights
Following the recent merger of ARCA biopharma with Oruka Therapeutics, investors are closely monitoring the financial health and market performance of the newly combined company. According to InvestingPro data, ARCA biopharma currently holds a market capitalization of $36.7 million. Despite the challenges faced, one of the notable InvestingPro Tips highlights that ARCA biopharma maintains a stronger cash position than debt on its balance sheet, which could provide some financial flexibility in the merged entity's future operations.
InvestingPro data also reveals that ARCA biopharma has experienced significant price volatility. The stock has seen a large price uptick over the last six months, with a 111.52% price total return, reflecting investor optimism. This is juxtaposed against a one-week price total return of -10.97%, indicating recent market reactions. Additionally, the company does not pay a dividend, which can be a consideration for income-focused investors.
While ARCA's P/E ratio stands at -4.66, indicating that the company is not currently profitable, this metric alone does not capture the full potential of the merged entity. With Oruka Therapeutics' focus on developing novel biologics, the future profitability of the company could change as its product pipeline matures. Moreover, the InvestingPro platform lists several more tips, including observations on the company's gross profit margins and short-term liquidity, which could be invaluable to investors seeking a more comprehensive analysis.
For those interested in deeper insights, additional InvestingPro Tips for ARCA biopharma are available, offering a broader perspective on the company's financial health and market performance.
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