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NKGen Biotech to Go Public Through SPAC Merger

NEW YORK – NKGen Biotech, a company developing autologous and allogeneic CAR therapies for neurodegenerative and oncological diseases, is preparing to go public, the firm said Friday.

Santa Ana, California-based NKGen plans to merge with Graf Acquisition Corp. IV, a special purpose acquisition company. NKGen expects the deal to close in Q3 2023, at which time the merged entity will operate under the name NKGen Biotech and will be publicly listed on the New York Stock Exchange, NYSE American, or Nasdaq under the ticker symbol NKGN.

The business combination is expected to have a pro forma enterprise value of at least $160 million based on a pre-equity value of $145 million and conversion of at least $15 million of outstanding private convertible securities and accrued interest at closing. Graf and NKGen plan to seek new PIPE funding before closing the deal. 

NKMax, a publicly traded South Korean firm that is a majority stockholder in NKGen, will provide up to $25 million cash funded at $10 per share pursuant to a backstop agreement. The combined business needs at least $50 million in net transaction cash proceeds to fund Phase II trials of its pipeline products and its operations through Q2 2025.

NKGen's lead product candidate, SNK01, is an autologous therapy it is studying in advanced Alzheimer's disease patients in a Phase I trial underway in Mexico. Additionally, in two Phase I/II trials in the US, NKGen is studying SNK01 as a monotherapy and in combination with other agents in advanced refractory solid tumors. The firm is also developing allogeneic CAR therapies in other cancer settings.

"We believe having access to the public markets will help enable us to fund our clinical development in advanced neurodegenerative diseases and support the launch of our off-the-shelf allogenic program in oncology," NKGen CEO Paul Song said in a statement.

Since launching in 2017, most of NKGen's funding has come from NKMax, which conducts biopharmaceutical R&D activities underpinning the intellectual property that is licensed to NKGen for use in markets outside Asia.

The boards of NKGen, NKMax, and Graf have approved the business combination. The deal is expected to close once Graf stockholders approve it and other closing conditions are met.