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.
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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