Gemini has entered into a business alliance agreement with Disc Medicine.

Gemini Therapeutics has signed a definitive agreement to merge with Disc Medical in an all-stock deal to create a clinical-stage biopharmaceutical company.

To fund the merger, Disc has raised $53.5m in funding from a group of healthcare investors led by Access Biotechnology and including OrbiMed, Atlas Ventures and 5AM Ventures, among others.

The combined company is expected to be a disc therapy company with corporate headquarters in Watertown, Massachusetts, US.

It would be worth about $175 million in cash or cash equivalents.

Proceeds from the business combination will be used to advance the disc’s pipeline into clinical trials and provide funding through 2025.

DISC focuses on discovering and developing new treatments for patients with severe blood disorders.

Following the merger, the combined business will work to advance Disc’s pipeline of hematology programs.

They include multi-patient clinical trials for DISC programs, bitpeppertin and DISC-0974, which are currently in clinical development.

The GlyT1 glycine transporter inhibitor, bitopertin, has shown an effect on heme biosynthesis in clinical trials. Last year, the bitpeppertin disk under license from Roche.

Licensed from AbbVie in 2019, DISC-0974 is a monoclonal antibody. It acts on the hemojuvelin co-receptor and can inhibit hepcidin production and raise serum iron levels in people with anemic inflammation.

Disc also has a research program developing orally available small molecules to inhibit Matriptase-2 and increase hepcidin production and iron availability.

Current Disc Medicine CEO and President John Kuisel will lead the combined company along with other members of the management team.

Gemini & Disc Medicine’s board of directors has unanimously approved the settlement agreement.

Kuisel said: “Over the past few months, we have initiated clinical studies for bitopertin and DISC-0974 in patients and have provided first-in-human data establishing clinical mechanistic validation of our DISC-0974 hepcidin suppression program.

“This transaction provides us with excellent financial strength, activates several programs with consistent data incentives and allows us to explore the full potential of our pipeline.”

The deal is expected to close in the fourth quarter of this year, subject to certain conditions and approvals.