Velaris Therapeutics, the newest spinout from Paragon Labs, is going public through a reverse merger with Alaunos Therapeutics, BioPharma Dive reports. Velaris focuses on diseases of the heart and lungs. Alaunos, a former cell therapy developer that abandoned its programs in 2023, had struggled financially and at least twice risked losing its Nasdaq listing. The combined company will focus on Velaris' pipeline, and Fairmount Funds will effectively control four of the five board seats.
Fairmount, the Philadelphia investment firm that founded Paragon in 2021, led a concurrent private placement of about $350 million to support Velaris' research into 2029. Participants included Venrock Healthcare Capital Partners, Wellington Management, Janus Henderson Investors, Perceptive Advisors, and T. Rowe Price accounts. The deal was structured as a simultaneous sign and close, a faster version of the usual reverse merger.
The transaction is part of a broader shift in biotech finance. Reverse mergers were once seen as a last resort, but Fairmount has helped make them a credible alternative to IPOs. More than two dozen biotech reverse mergers have been announced in 2026, roughly matching the number of IPOs so far this year. Most Paragon spinouts have taken this route; Apogee Therapeutics was the exception, raising $300 million in an IPO in 2023 and later selling to AbbVie for nearly $11 billion. The combined company also intends to keep working on Alaunos' obesity and metabolic disorders drug.