Merck to Acquire VelosBio for $2.75Bn

Merck known as MSD outside the United States and Canada, and VelosBio Inc. today announced that the companies have entered into a definitive agreement pursuant to which Merck, through a subsidiary, will acquire all outstanding shares of VelosBio for $2.75 billion in cash, subject to certain customary adjustments. VelosBio is a privately held clinical-stage biopharmaceutical company committed to developing first-in-class cancer therapies targeting receptor tyrosine kinase-like orphan receptor 1 (ROR1). VelosBio’s lead investigational candidate is VLS-101, an antibody-drug conjugate (ADC) targeting ROR1 that is currently being evaluated in a Phase 1 and a Phase 2 clinical trial for the treatment of patients with hematologic malignancies and solid tumors, respectively.

Dr. Roger M. Perlmutter, president, Merck Research Laboratories “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 October 2020, VelosBio announced the initiation of a Phase 2 clinical trial (NCT04504916) to evaluate VLS-101 for the treatment of patients with solid tumors, including patients with triple-negative breast cancer (TNBC), hormone receptor-positive and/or HER2-positive breast cancer, and non-squamous non-small-cell lung cancer (NSCLC). In early clinical trials, VLS-101 demonstrated a manageable safety profile and early signs of anti-tumor activity. Results of a Phase 1 clinical trial, to be presented virtually at the 62nd American Society of Hematology Annual Meeting (Dec. 5-8, 2020), showed that VLS-101 resulted in objective clinical responses, including complete responses, in 47% (n=7/15) of patients with mantle cell lymphoma (MCL) and 80% (n=4/5) of patients with diffuse large B-cell lymphoma. Patients in this Phase 1 trial had been heavily pretreated with other anticancer medications, and their cancers had failed to respond or had relapsed after initially responding to these other anticancer medications. In addition, VelosBio is developing a preclinical pipeline of next-generation ADCs and bispecific antibodies targeting ROR1 with the potential to complement VLS-101 by offering alternative methods of tumor cell killing.

Dave Johnson, founder and chief executive officer at VelosBio Said “Merck is a recognized 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 recognized 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.”

The closing of the transaction, which is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, is expected by the end of 2020.

Merck was represented by Gibson Dunn & Crutcher LLP as legal advisor and J.P. Morgan Securities LLC as financial advisor. VelosBio was represented by Cooley LLP as legal advisor and Centerview Partners LLC as financial advisor.

About VLS-101

VLS-101 is an investigational ADC comprising a monoclonal antibody targeting ROR1 that is linked to a chemotherapeutic agent called monomethyl auristatin E (MMAE). After the antibody binds to ROR1 on cancer cells, the ADC is designed to enter those cells and release MMAE to destroy the cancer cells. In mouse models of human hematologic malignancies and solid tumors, VLS-101 showed robust antitumor activity. VLS-101 is in clinical development for patients with previously treated hematologic malignancies and solid tumors. The U.S. Food and Drug Administration has granted VLS-101 orphan drug and fast track designations for the treatment of MCL.

Merck’s Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, the potential to bring new hope to people with cancer drives our purpose and supporting accessibility to our cancer medicines is our commitment. As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the largest development programs in the industry across more than 30 tumor types. We also continue to strengthen our portfolio through strategic acquisitions and are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers.

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