Merck snaps up OncoImmune for $425M

KENILWORTH, N.J. & ROCKVILLE, Md.—Merck, known as MSD outside of the United States and Canada, has signed a definitive agreement with clinical-stage biopharmaceutical company OncoImmune under which Merck, via a subsidiary, will acquire all of OncoImmune’s outstanding shares for an upfront payment of $425 million in cash. OncoImmune shareholders also stand to receive sales-based payments and other payments contingent on the achievement of regulatory milestones.

Per the terms of the agreement, prior to the acquisition's closing, OncoImmune will spin-out certain rights and assets unrelated to its CD24Fc program to a new entity that will be owned by OncoImmune’s existing shareholders. Once the acquisition closes, Merck will invest $50 million in the new entity and become a minority shareholder. The transaction is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions, and is expected to close before the end of the year.

“Outstanding work by the OncoImmune team has provided compelling evidence regarding the use of CD24Fc in patients with severe and critical COVID-19 in our Phase 3 trial,” said Dr. Yang Liu, co-founder and CEO of OncoImmune. “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.”

CD24Fc is OncoImmune’s lead candidate for the treatment of severe and critical COVID-19, a first-in-class recombinant fusion protein that targets the innate immune system. Prior to the COVID-19 trial, CD24Fc has also been studied for safety in healthy volunteers and in Phase 2 clinical trials for the prevention of graft versus host disease (GVHD) following hematopoietic stem cell transplantation in patients with leukemia.

OncoImmune recently shared top-line findings from an interim efficacy analysis of CD24Fc in a Phase 3 study. The study assessed the safety and efficacy of CD24Fc in hospitalized patients with COVID-19 who required oxygen support, including those requiring supplemental oxygen, high flow oxygen, and mechanical ventilation. Interim analysis of data from 203 participants (75 percent of the planned enrollment) demonstrated that patients with severe or critical COVID-19 treated with a single dose of CD24Fc showed a 60-percent higher probability of improvement in clinical status, as defined by the protocol, compared to placebo. The risk of death or respiratory failure was reduced by more than 50 percent. OncoImmune intends to submit detailed results for publication in a peer-reviewed medical journal.

“Meaningful new therapeutic options are desperately needed for possibly millions of people around the world who will develop severe or critical COVID-19 disease,” Dr. Roger M. Perlmutter, president of Merck Research Laboratories, commented in a press release. “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.”

OncoImmune also has a pipeline of immuno-oncology candidates, which will be the focus of the new spin-out entity, according to a press release. The therapeutic candidates—ONC-392, ONC-781, ONC-841 and ONC-895—are about to begin or have entered preclinical development, with ONC-392 in Phase 1 testing. The pipeline features a variety of targets/mechanisms of action, including anti-CTLA-4 and CAR-T.