Eliem cuts in on Tango, proposing acquisition after strategic review

Eliem Therapeutics is sashaying away from the brink of closure, joining hands with a private biotech identified as "Tango" after reviewing strategic alternatives.

RA Capital-backed Eliem is set to snap up Tango, another company that has funds affiliated with RA Capital, according to Securities and Exchange Commission documents filed March 18. Currently, there's no webpage for a private biotech called Tango and the company is not listed as part of RA's portfolio.  

According to the proposed transaction, Eliem will issue common stock to Tango’s equityholders in exchange for all outstanding equity of Tango, with the company becoming a wholly owned Eliem subsidiary. The proposal means that Tango shareholders would own 15.4% of equity of the company immediately before the deal closes, according to SEC documents.

The proposed exchange ratio values Eliem initially at $110 million right when the deal closes, while Tango valued at $20 million.

If the acquisition goes through, a concurrent private placement of the new company’s common stock would be put into effect. Funds affiliated with RA Capital are expected to purchase a portion of the securities in the concurrent investment, according to SEC filings.

The deal still has to be approved by both companies’ boards and stockholders.

Eliem has been searching for a savior since July 2023, when the biotech shuttered its last pipeline program and launched a search for strategic alternatives. Just a few months before, the nervous system disorder-focused company axed a phase-2-ready depression drug candidate and laid off 55% of staff, citing a “challenging capital environment” as the reason for ending work on its most advanced candidate.  

Editor's note: An initial version of this article referred to Tango as "Tango Therapeutics," which is a separate biotech that RA Capital has backed.