Acelyrin Shareholder Pushes for Liquidation Over Alumis Merger

In a significant development for the biotechnology sector, Trium Capital, a shareholder of immune drug developer Acelyrin, has come out against the company's planned merger with Alumis. The England-based investment fund argues that liquidation would provide better value for shareholders than the proposed merger.

Trium Capital's Opposition to Merger

Trium Capital, in a regulatory filing on Tuesday, revealed its intention to vote against the planned merger between Acelyrin and Alumis. The investment firm contends that liquidating Acelyrin's assets would yield superior returns for equity holders compared to the current merger offer or other alternatives the company has considered.

Felix Lo, portfolio manager at Trium Capital, stated in a letter to Acelyrin's board dated April 28, "We believe there is substantial upside to winding up the company as compared to the proposed merger." Lo emphasized that liquidation would provide certainty of value above any offers received thus far and allow shareholders to reinvest proceeds as they see fit.

Acelyrin's Financial Position and Strategic Options

Acelyrin, which raised $540 million in one of biotech's largest initial public offerings in 2023, has faced setbacks that have significantly impacted its market value. The company abandoned development of its lead drug candidate following disappointing study results, and a second therapy has not met expectations, leading to a depressed stock price.

Currently trading at approximately $2.50 per share, Acelyrin's net cash reserves of $448 million as of Q4 2024 equate to $4.45 per share, according to Trium's analysis. This discrepancy between market value and cash holdings has attracted attention from activist investors and potential acquirers.

Industry Trend of "Zombie" Biotech Scrutiny

Trium's push for liquidation aligns with a broader trend of increased investor scrutiny of biotech companies that have suffered setbacks and are trading below their cash values. These so-called "zombie" biotechs typically pivot to new strategies or seek mergers, but shareholders are increasingly advocating for more direct returns on their investments.

This trend has led to several recent cases of investor pressure on company boards, with Third Harmonic Bio approving a liquidation plan just two weeks ago. The situation at Acelyrin reflects the ongoing debate in the industry about the best course of action for struggling biotech firms with significant cash reserves.