A Cheshire drug developer has agreed a merger worth $425m with a US counterpart.
Alderley Park-based Redx Pharma and Jounce Therapeutics are both unanimously recommending the deal to their shareholders.
Redx is a clinical-stage biotechnology company focused on the discovery and development of novel, small molecule, targeted therapeutics for the treatment of cancer and fibrotic diseases and the emerging area of cancer-associated fibrosis.
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Jounce is a clinical-stage immunotherapy company, dedicated to transforming the treatment of cancer by developing therapies that enable the immune system to attack tumours and provide long-lasting benefits to patients through a biomarker approach.
Redx said the merger would create a "transatlantic organisation with proven expertise in both small molecule drugs and biologics, and a clinical pipeline with multiple value inflection points in the near and medium term".
It added the group's "highest priority" will be the development of RXC007.
The news comes after Jounce announced plans to reduce its workforce by approximately 57%.
After completion of the merger, around 47 Jounce employees will be retained by the combined group at a research and development base in Massachusetts, USA.
Named Redx Inc, the combined group would be solely listed on Nasdaq in the US.
It would be led by current Redx CEO Lisa Anson while Redx chair Dr Jane Griffiths would become the non-executive chair of the combined group.
Lisa Anson said: "By combining Redx's proven track record in small molecule drug discovery and development with Jounce's expertise in biologics and immunotherapy, we will establish a world-class biotech company with a robust pipeline, aimed at developing therapeutics for cancer and fibrotic disease. RXC007, our next-generation ROCK2 inhibitor, will lead the clinical pipeline, and we will now further investigate opportunities for this asset in cancer-associated fibrosis and other interstitial lung diseases.
"While the majority of the combined group's operations, and its headquarters, will be at Alderley Park in the UK, we believe that listing solely on Nasdaq is the most efficient way to enable us to access a deep pool of risk capital and engage with specialist global investors to support our future growth."
Richard Murray, chief executive and president of Jounce Therapeutics, added: "I am very proud of the work we have achieved at Jounce and today's news is testament to the accomplishments of our team's efforts.
"We are pleased that many of our employees will join the combined group and continue to focus on bringing much-needed alternatives to patients.
"Additionally, we are pleased that Redx will continue to advance certain of our early discovery programs.
"With a focus on cancer and fibrosis, and a strong scientific basis for discovery and development programs in those areas, we believe that the new company will be well positioned to succeed."
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