Merck paying $425M in cash for biopharma with promising COVID candidate

As the nation continues to battle the COVID-19 pandemic, Merck has agreed to pay $425 million in cash for a privately held biopharmaceutical company with a therapeutic candidate for treating severe and critical COVID.

Kenilworth-based Merck is buying OncoImmune through a subsidiary, paying cash for all of the Maryland-based company’s outstanding shares.

OncoImmune recently announced positive top-line findings from an interim efficacy analysis of a Phase 3 student evaluating its lead candidate, CD24Fc, Merck said in a news release. The analysis found that patients with sever or critical COVID-19 treated with a single dose of the medication showed a 60% higher probability of improvement in clinical status, compared with a placebo, and the risk of death or respiratory failure was reduced more than 50%.

“Meaningful new therapeutic options are desperately needed for possibly millions of people around the world who will develop severe or critical COVID-19 disease,” Roger Perlmutter, president of Merck Research Laboratories, said in a prepared statement. “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 will spin out certain rights and assets unrelated to the CD24Fc program to a new entity, prior to the completion of the acquisition, it noted. Merck will invest $50 million and become a minority shareholder in this new entity.

The closing is expected by year-end, pending customary approvals and conditions.

Goodwin Procter LLP was OncoImmune’s legal adviser and Guggenheim Securities was its financial adviser.