Gemini Therapeutics, a clinical-stage precision medicine company, has agreed to merge with Disc Medicine in an all-stock transaction to create a clinical-stage biopharmaceutical firm.

To support the deal, Disc secured $53.5m funding from a group of healthcare investors led by Access Biotechnology and also OrbiMed, 5AM Ventures, Atlas Venture, Novo Holdings, Arix Bioscience, Rock Springs Capital, and Janus Henderson Investors.

The combined entity is expected to be named Disc Medicine, which will be headquartered in Watertown, Massachusetts, US.

It will be valued at nearly $175m in cash or cash equivalents.

Disc Medicine is engaged in discovering and developing new therapies for patients with serious haematologic ailments.

Upon closing of the merger, the new entity will work on advancing the haematology programmes pipeline of Disc.

They include several patient clinical trials for Disc’s programmes, bitopertin and DISC-0974, which are currently in the clinical development stage.

A GlyT1 glycine transporter inhibitor, bitopertin showed effects on heme biosynthesis in clinical trials. Disc in-licensed bitopertin from Roche last year.

DISC-0974, in-licensed from AbbVie in 2019, is a monoclonal antibody. It acts on hemojuvelin co-receptor and could hinder the production of hepcidin and boost serum iron levels in individuals with anaemia of inflammation.

Furthermore, Disc has a research programme which can detect orally available small molecules to hinder Matriptase-2 and boost hepcidin production and hinder iron availability.

The current Disc Medicine CEO and president John Quisel will lead the merged entity along with other management team members.

Quisel said: “In the last few months, we have initiated clinical studies in patients for both bitopertin and DISC-0974 and presented first-in-human data from DISC-0974, our hepcidin suppression programme, establishing clinical proof-of-mechanism.

“This transaction will provide us with tremendous financial strength, propel several programmes through a series of data catalysts and enable us to explore the full potential of our pipeline.”

The deal, which was approved by the Board of Directors of Gemini Therapeutics and Disc Medicine, is expected to conclude in the fourth quarter of 2022, subject to necessary conditions and approvals.