Merck, through a subsidiary, has agreed to acquire clinical-stage biopharmaceutical company OncoImmune for an upfront cash payment of $425m.
Under the deal, OncoImmune shareholders will be eligible to secure sales-based payments and payments contingent on the achievement of certain regulatory milestones.
Recently, the biopharmaceutical company announced positive top-line results from an interim efficacy analysis of a phase 3 study, which is assessing the firm’s therapeutic candidate CD24Fc to treat patients suffering from severe Covid-19.
CD24F, a first-in-class recombinant fusion protein, has been designed to target the innate immune system. Before the phase 3 clinical trial for Covid-19 patients, CD24Fc has been evaluated for safety in healthy volunteers and in phase 2 clinical trials to prevent graft versus host disease (GVHD) after the transplantation of hematopoietic stem cell in patients with leukaemia.
OncoImmune’s interim analysis of data from 203 participants demonstrated a 60% higher probability of improvement in clinical status when treated patients with severe or critical Covid-19 with a single dose of CD24Fc.
OncoImmune’s SAC-COVID phase 3 clinical trial is a randomised, double-blind and placebo-controlled trial designed to assess the safety and efficacy of CD24Fc in hospitalized patients with Covid-19 requiring oxygen support, including patients requiring supplemental oxygen, high flow oxygen and mechanical ventilation.
OncoImmune co-founder and CEO Yang Liu said: “We look forward to working with the scientists and manufacturing engineers at Merck as well as regulators as we seek to accelerate the global development of this potentially important therapy.”
The deal includes the spin-out of certain rights and assets unrelated to the CD24Fc programme to a new entity to be owned by the existing shareholders of OncoImmune.
Merck will invest $50m to become a minority shareholder in the new entity, upon closing of the deal.
Subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, the deal is expected to be completed by the end of this year.
Merck Research Laboratories president Dr Roger Perlmutter said: “Recent clinical investigations support the view that CD24Fc may provide benefit beyond standard of care therapy for Covid-19 patients requiring oxygen support, and hence will represent an important addition to the Merck pipeline of investigational medicines and vaccines designed to address the Covid-19 pandemic.”
Goodwin Procter has served as legal advisor to OncoImmune, while Guggenheim Securities as financial advisor to the company.
Earlier this month, Merck agreed to acquire US-based clinical-stage biopharmaceutical company VelosBio for $2.75bn in cash.