The acquisition will strengthen Merck’s oncology portfolio with investigational antibody-drug conjugate VLS-101 for blood cancers and solid tumours
Merck has agreed to acquire VelosBio, a clinical-stage biopharmaceutical company, in an all-cash deal worth $2.75bn.
San Diego-based VelosBio is engaged in developing advanced cancer therapies that target receptor tyrosine kinase-like orphan receptor 1 (ROR1).
Through the transaction, Merck is expected to benefit from the VelosBio’s lead investigational drug candidate VLS-101.
VLS-101 is an antibody-drug conjugate (ADC), comprising a monoclonal antibody that targets ROR1, linked to monomethyl auristatin E (MMAE), a chemotherapeutic agent.
The drug is currently being studied in Phase 1 clinical trial for the treatment of patients with hematologic malignancies and a Phase 2 trial for solid tumours.
Merck Research Laboratories president Roger Perlmutter said: “At Merck, we continue to bolster our growing oncology pipeline with strategic acquisitions that both complement our current portfolio and strengthen our long-term growth potential.
“Pioneering work by VelosBio scientists has yielded VLS-101, which in early studies has provided notable evidence of activity in heavily pretreated patients with refractory hematological malignancies, including mantel cell lymphoma and diffuse large B-cell lymphoma.”
In a previous Phase 1 clinical trial, treatment using VLS-101 resulted in positive objective clinical responses in 47% of patients with mantle cell lymphoma (MCL) and 80% of patients with diffuse large B-cell lymphoma.
A Phase 2 clinical trial initiated in October 2020, is evaluating patients with solid tumours including triple-negative breast cancer (TNBC), hormone receptor-positive and/or HER2-positive breast cancer, and non-squamous non-small-cell lung cancer (NSCLC).
VelosBio is developing portfolio of next-generation anti-ROR1 ADCs
VelosBio said that it is developing a preclinical portfolio of next-generation anti-ROR1 ADCs and bispecific antibodies that offer alternative methods for killing tumour cells.
The acquisition is expected to be completed by the end of 2020, subject to certain customary closing conditions, and approval under the Hart-Scott-Rodino Antitrust Improvements Act.
For the transaction, Gibson Dunn & Crutcher is serving as legal advisor and J.P. Morgan Securities as a financial advisor for Merck, while Cooley serving as legal advisor and Centerview Partners as a financial advisor for VelosBio.
VelosBio founder and chief executive officer Dave Johnson said: “Merck is a recognised leader in oncology, and this acquisition reflects the hard work and commitment of all the employees at VelosBio in advancing the science of ROR1.
“We are very pleased that Merck has recognised the value of our first-in-class ROR1-directed investigational therapeutics.
“As part of Merck’s oncology pipeline, our lead product candidate, VLS-101, is now well-positioned to achieve its maximum potential to benefit appropriate cancer patients in need.”