UC San Francisco spinout Effector Therapeutics is set to go public through a reverse merger with Locust Walk Acquisition Corp that includes a $60m PIPE financing.
Effector Therapeutics, a US-based cancer treatment developer spun out of University of California, (UC) San Francisco, agreed to a reverse merger with special purpose acquisition company Locust Walk Acquisition Corporation today.
Locust Walk is listed on Nasdaq Capital Market under the ticker symbol LWAC. It raised $175m in its initial public offering in January 2021 and the reverse merger will also include a $60m private investment in public equity (PIPE).
The PIPE financing has been committed by spinout-focused fund Osage University Partners (OUP) as well as SR One, Pfizer Ventures and Alexandria Venture Investments, respective vehicles for pharmaceutical firms GlaxoSmithKline and Pfizer, and real estate investment trust Alexandria Real Estate Equities.
Abingworth, Column Group, US Venture Partners (USVP), Altitude Life Science Ventures, Sectoral Asset Management and BioMed Ventures are also contributing to the PIPE financing.
The reverse merger is expected to conclude in the third quarter of 2021. It will trade using the ticker symbol EFTR, and the merger will value the combined business at $419m.
Founded in 2012, Effector Therapeutics is working on oncology drugs called selective translation regulator inhibitors. It has multiple assets in the clinic and is also exploring one candidate as a potential anti-viral therapy in patients with mild to moderate covid.
The spinout advances research undertaken in the laboratories of Davide Ruggero and Kevan Shokat at UC San Francisco. It will use proceeds from the reverse merger to further develop its pipeline through multiple clinical milestones.
Effector collected $20.4m in funding from unnamed backers in May 2019, according to a regulatory filing.
Alexandria Venture Investments joined Pfizer Ventures, SR One and peers Novartis Venture Fund, AbbVie Biotech Ventures and Astellas Ventures, subsidiaries of AbbVie and Astellas respectively, for a $38.6m series C round in 2017.
The series C round also attracted USVP, Abingworth, Column Group, Altitude Life Science Ventures, Sectoral Asset Management and BioMed Ventures.
OUP backed a $56m series B round in 2016, when SR One, AbbVie Biotech Ventures, Astellas Ventures, Novartis Venture Fund, Abingworth, BioMed, Column Group, USVP, Sectoral, Altitude Life Science and Mission Bay Capital also invested.
Effector had already received $45m in series A financing from OUP, Novartis Venture Fund, SR One, Astellas Venture Management, USVP, Abingworth and Mission Bay Capital in 2013.
