Werewolf Therapeutics Inc (NASDAQ:HOWL) shares soared 120% in premarket trading on Friday after the biotechnology company agreed to merge with Ambros Therapeutics Inc alongside a $150 million private placement.
The all-stock combination will create a company centred on the development of neridronate, Ambros Therapeutics’ late-stage drug candidate for Complex Regional Pain Syndrome Type 1 (CRPS-1). Subject to shareholder approval and customary closing requirements, the transaction is expected to be completed during the first quarter of 2027.
Private placement raises $150 million
Alongside the merger, the companies announced an oversubscribed $150 million private placement led by RA Capital Management and Janus Henderson Investors.
Additional investors include Aberdeen Investments, Adage Capital Partners, ADAR1 Capital Management, Affinity Asset Advisors, Arkin Bio Capital, Balyasny Asset Management, Patient Square Capital’s Enavate Sciences platform, SilverArc Capital, Sphera Healthcare and Woodline Partners LP.
The financing is intended to provide the combined business with sufficient capital to advance its principal clinical programme through important development and regulatory milestones.
Ambros shareholders to control majority of combined company
Under the agreed ownership structure, existing Werewolf shareholders are expected to hold approximately 6.8% of the merged company.
Pre-merger Ambros shareholders will own around 71.7%, while investors participating in the private placement are expected to control approximately 21.5%.
The exchange ratio underpinning the transaction assigns an implied value of $500 million to Ambros and $47.5 million to Werewolf.
Following completion, the combined business will operate under the Ambros Therapeutics name and its shares are expected to trade under the ticker symbol “AMBX.”
Neridronate becomes central focus of merged business
The combined company will concentrate primarily on advancing neridronate as a potential treatment for CRPS-1, a condition estimated to affect around 65,000 newly diagnosed patients in the United States each year and for which there is currently no FDA-approved therapy.
Neridronate has already received Breakthrough Therapy, Fast Track and Orphan Drug designations from the US Food and Drug Administration. The treatment has also been administered to approximately 600,000 patients in Italy across its approved indications.
The company plans to continue development through the pivotal CRPS-RISE Phase 3 clinical trial, with topline results expected in 2028. It also intends to pursue a New Drug Application submission to the FDA.
Following completion of the merger and financing, the combined company expects its available capital to provide a cash runway into the first half of 2029, including through the anticipated Phase 3 readout and planned regulatory filing.
The sharp premarket rally in Werewolf shares reflects investor reaction to both the substantial valuation attributed to Ambros in the merger and the fresh financing supporting neridronate’s late-stage clinical development.