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Cambridge startup Synlogic to go public through reverse merger

Two-year-old Cambridge startup Synlogic Inc., which is synthetically engineering microbes into disease-fighting drugs, said Tuesday that it has struck an unusual deal to allow it to go public this summer through a reverse merger with a Texas shell company.

Under the terms, Synlogic will merge with a wholly owned subsidiary of Austin-based Mirna Therapeutics Inc. in an all-stock transaction. Mirna currently has no products, but it has a stock symbol — MIRN — that will be acquired by Synlogic, enabling the Cambridge company to raise money on the capital markets without going through an initial public offering.

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Synlogic, which will be the surviving company in the deal, will then change the stock symbol. It expects to begin trading on the Nasdaq exchange in August or September.

“We thought this was the most efficient way to generate funds to get us to the clinic,” said Synlogic chief executive Jose-Carlos Gutierrez-Ramos. He said the company plans to begin human clinical trials in mid-year of its lead experimental drug, which treats two rare metabolic disorders that cause elevated levels of ammonia in patients.

Synlogic, which has about 40 employees working in a former Vertex Pharmaceuticals Inc. building in the Cambridgeport neighborhood, wants to become the leading developer of drugs that harness the microbiome, a vast collection of microbes in the gut that break down food and protect people against diseases.

“We have a very huge platform that uses synthetic biology to create living medicines,” Gutierrez-Ramos said. “The goal is to focus on the science and get it to the patients as soon as possible.”

Gutierrez-Ramos said Synlogic will spend $82 million to advance its experimental treatments. Of that total, $42 million will come from a new funding round from a group of biotech investors. The remainder will be cash in Mirna’s coffers.

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Mirna shareholders will own about 17 percent of Synlogic after the reverse merger. The rest will be owned by current Synlogic stockholders.


Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.