Merck To Buy Late-Stage COVID-19 Treatment Company OncoImmune For $425M In Cash

Merck To Buy Late-Stage COVID-19 Treatment Company OncoImmune For $425M In Cash

Merck & Co., Inc. MRK, which has been lagging behind some of its large-pharma peers in COVID-19 treatment and vaccine development, announced the purchase Monday of a private company with a late-stage COVID-19 treatment candidate.

What Happened: Merck said it has executed a definitive agreement to buy all outstanding shares of the privately held, clinical-stage biopharma OncoImmune for an upfront payment of $425 million in cash.

OncoImmune shareholders will also be eligible to receive sales-based payments and payments contingent on the successful achievement of certain regulatory milestones.

OncoImmune's lead therapeutic candidate CD24Fc is being evaluated as a treatment option for patients with severe and critical COVID-19.

The agreement provides for OncoImmune spinning out certain rights and assets unrelated to the CD24Fc program to a new entity to be owned by the existing shareholders of OncoImmune.

Merck said it will invest $50 million in the new entity and become a minority shareholder.

The closing of the acquisition is expected before the end of 2020.

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Why It's Important: OncoImmune recently announced positive top-line findings from an interim efficacy analysis of a Phase 3 study of CD24Fc, with patients treated with a single dose of CD24Fc showing a 60% higher probability of improvement in clinical status, as defined by the protocol and compared to a placebo.

The risk of death or respiratory failure was reduced by more than 50%, according to Merck. 

Merck has already forayed into developing treatments and vaccine for SARS-CoV-2.

It licensed EIDD-2801, an investigational, orally available antiviral agent in early clinical development, from Ridgeback Biotherapeutics for the treatment of COVID-19 patients. 

Merck also executed a collaboration agreement with IAVI in late May to develop an investigational vaccine against SARS-CoV-2.

It also acquired Themis Bioscience, a company focused on vaccines and immune-modulation therapies for infectious diseases, including COVID-19.

Separately, Merck said Monday it submitted applications to the FDA and European Medicines Agency for regulatory approval of V114, its investigational 15-valent pneumococcal conjugate vaccine, for use in adults 18 years and older.

MRK Price Action: Merck shares were trading 0.46% higher at $80.08 at last check Monday. 

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Posted In: CoronavirusCovid-19BiotechM&ANews