Oruka spins out of Paragon with 3 assets, reverse merger and cash

Oruka Therapeutics is jumping onto the biotech stage with a bang, going public via a reverse merger and tacking on $275 million through a private placement.

That’s certainly one way to let everyone know you’ve arrived. 

The dermatology-focused biotech formally unveiled Wednesday, spun out of Paragon Therapeutics with public market access and three preclinical assets. Oruka is Paragon's third offshoot, following public companies Spyre Therapeutics and Apogee Therapeutics. 

Oruka took the reverse merger route via ARCA Biopharma. The subsequent private placement was led by Venrock and Fairmount Partners, with other institutional biotech investors joining. 

Oruka's preclinical pipeline is an outlier among most companies going public these days as investors crowd around those with human data. That wasn’t of concern to Oruka CEO Lawrence Klein, who told Fierce Biotech that the private placement provides enough runway through 2027, meaning the company won’t have to gin up hype for the foreseeable future. Oruka expects to have two lead assets, ORKA-001 and ORKA-002, in the clinic by the first half of 2025. 

“I think there are different types of preclinical companies,” Klein said. “We have mechanisms that are well validated, and I think that's a different position than a platform technology that needs to get through some technical hoops to get into the clinic.” 

Improving dose frequency is one of Oruka’s critical sales pitches, with the belief that both ORKA-001 and ORKA-002 could be administered just once or twice per year. 

The immediate clinical focuses of the two assets will be plaque psoriasis and psoriatic arthritis, Klein said, with a third undisclosed asset from Paragon also in the works. Those three will be Oruka's near-term priorities, but Klein said the pipeline could be grown via Paragon or other external partners in the future.

Klein is back in the C-suite after spending seven years at CRISPR Therapeutics as both chief operating officer and chief business officer. He joined Versant Ventures as a partner in 2023 before departing to lead Oruka. 

“I'm thrilled to have a couple of colleagues who have since left CRISPR join me at Oruka in the early days,” he said. “I think a lot of that operational excellence will look to carry over to Oruka.”