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Jounce Therapeutics to Merge With Redx After Laying Off 57 Percent of Workforce

NEW YORK – Jounce Therapeutics said Thursday that it plans to merge with Redx, a UK-based biotech developing treatments for cancer and fibrotic diseases, a day after announcing that it would reduce its workforce by 57 percent and seek business development opportunities for its two clinical programs JTX-8064 and vopratelimab.

Both companies' boards unanimously recommended the merger which, if approved, would be completed during the second quarter of 2023.

Jounce, based in Cambridge, Massachusetts, is studying vopratelimab, a monoclonal antibody that activates the inducible T-cell costimulator on certain T cells, as a treatment for metastatic non-small cell lung cancer patients selected by Jounce's 18-gene RNA tumor inflammation signature, TISvopra, in the Phase II SELECT trial. Jounce was also studying vopratelimab with its PD-1 inhibitor pimivalimab in the SELECT trial, but reported in August that the combination did not meet the primary endpoint of change in measurable lesion size from baseline.

JTX-8064, the company's LILRB2/ILT4 antibody, was being studied in the Phase I/II INNATE trial as a monotherapy and in combination with pimivalimab in patients with advanced refractory solid tumors, including ovarian, renal cell carcinoma, triple-negative breast, non-small cell lung, cutaneous squamous cell carcinoma, undifferentiated pleomorphic sarcoma, biliary duct, gallbladder, and head and neck cancer.

"We believe data in both the SELECT and INNATE clinical trials is intriguing, but to date neither study has demonstrated clinical activity sufficient to create the value necessary for Jounce to independently advance these programs to the next stage of development," Jounce CEO Richard Murray said in a statement. "We believe a company with additional resources and a longer value creation timeline could potentially advance these programs, for the benefit of cancer patients."

With the Redx merger, the combined firm would not pursue Jounce's clinical programs beyond currently ongoing trials, but instead will focus on development of Redx's ROCK2 inhibitor RXC007 for idiopathic pulmonary fibrosis. The new company is expected to have a market value of $425 million, and a cash runway into the second half of 2025. It would trade on the Nasdaq under the ticker REDX and be led by Redx CEO Lisa Anson.

Jounce's remaining 47 employees will be retained at an R&D facility in Massachusetts and are expected to bring complementary expertise in biologics and immuno-oncology. The firm will be headquartered in Alderley Park, UK.