XOMA Royalty Corporation announced on June 27, 2025, that it has entered into a definitive merger agreement to acquire Turnstone Biologics Corp. for $0.34 in cash per share of Turnstone common stock plus one non-transferable contingent value right (CVR). The Turnstone Board of Directors unanimously determined that the acquisition is in the best interests of all stockholders and approved the merger agreement following a thorough review process with legal and financial advisors.
Transaction Structure and Timeline
Under the merger agreement terms, XOMA Royalty will commence a tender offer by July 11, 2025, to acquire all outstanding shares of Turnstone common stock. The closing of the offer requires several conditions, including the tender of Turnstone common stock representing at least a majority of outstanding shares, a minimum cash balance at closing, and other customary closing conditions.
Turnstone stockholders holding approximately 25.2% of common stock have signed support agreements committing to tender their shares in the offer and support the merger transaction. The merger transaction is expected to close in August 2025.
Following the tender offer closing, XOMA Royalty will acquire Turnstone, and all remaining shares not tendered in the offer, except those validly subject to appraisal, will be converted into the right to receive the same cash and CVR consideration per share as provided in the tender offer.
Company Profiles and Strategic Rationale
XOMA Royalty operates as a biotechnology royalty aggregator, acquiring potential future economics associated with pre-commercial and commercial therapeutic candidates licensed to pharmaceutical or biotechnology companies. When XOMA Royalty acquires future economics, sellers receive non-dilutive, non-recourse funding for advancing internal drug candidates or general corporate purposes. The company maintains an extensive and growing portfolio of assets, defined as rights to receive potential future economics associated with therapeutic candidate advancement.
Turnstone Biologics has historically focused on developing a differentiated approach to treat and cure patients with solid tumors by pioneering selected tumor-infiltrating lymphocyte (Selected TIL) therapy. This innovative therapeutic approach represents a specialized form of cancer immunotherapy targeting solid tumors.
Advisory Teams
Leerink Partners serves as exclusive financial advisor to Turnstone, with Cooley LLP acting as legal counsel. Gibson, Dunn & Crutcher LLP provides legal counsel to XOMA Royalty.
Risk Factors and Regulatory Process
The companies acknowledged various risks and uncertainties that could affect the transaction completion, including the possibility that closing conditions may not be satisfied or waived, uncertainties regarding the percentage of Turnstone stockholders tendering their shares, potential competing offers, and significant costs associated with the proposed transactions.
The tender offer has not yet commenced, and this announcement serves informational purposes only. Upon commencement, XOMA and its acquisition subsidiary will file a tender offer statement on Schedule TO with the SEC, while Turnstone will file a Solicitation/Recommendation Statement on Schedule 14D-9. The companies emphasized that investors should review these materials carefully when available, as they will contain important information for decision-making regarding share tendering.
