Merck & Co. Inc. (NYSE: MRK) has joined the fight against COVID-19, after the company announced that it would be acquiring OncoImmune in an all-cash transaction. The deal is subject to regulatory approval and customary closing conditions, but it is expected to close before the end of 2020.
Under the terms of the deal, Pfizer will make an upfront payment of $425 million in cash for the clinical-stage biopharmaceutical company.
For those late to the party, OncoImmune recently announced positive top-line findings from an interim efficacy analysis of a Phase 3 study evaluating its lead therapeutic candidate CD24Fc for the treatment of patients with severe and critical COVID-19.
In terms of the specifics from this late-stage study, the interim analysis from the 203 participants indicated that patients with severe or critical COVID-19 treated with a single dose of CD24Fc showed a 60% 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%.
Also under the agreement, prior to the completion of the acquisition, OncoImmune will spin out certain rights and assets unrelated to the CD24Fc program to a new entity to be owned by the existing shareholders of OncoImmune. In connection with the closing of the acquisition, Merck will invest $50 million and become a minority shareholder in the new entity.
Merck’s management noted that 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.
Excluding Monday’s move, Merck stock had underperformed the broad markets with a retreat of about 11.5% year to date. In the past 52 weeks, the share price was closer to 6% lower.
Merck stock traded up fractionally early Monday at $80.66, in a 52-week range of $65.25 to $92.64. The consensus price target is $95.58.