The UK’s Mereo BioPharma is planning to merge with US group OncoMed Pharmaceuticals.
The transaction will create a combined business with a diversified combined portfolio of seven assets, which will result in an increased number of potential near-term catalysts with a core focus remaining on Mereo’s strategy to target orphan diseases, the groups said.
The transaction has been unanimously approved by the Boards of Directors of each company.
Subject to potential adjustment and based upon an OncoMed net balance of $38 million at completion, current Mereo shareholders are expected to own around 75% of the merge's shared capital, while current OncoMed shareholders are expected to own approximately 25%.
Commenting on the announcement, Mereo's chief executive, Dr Denise Scots-Knight, said: “The Transaction allows us to broaden our asset base, including strengthening our cash position to enable us to progress beyond our key clinical milestones.
“We believe that our plan to initiate a US ADR programme on NASDAQ, in addition to the continued listing of our ordinary shares on AIM, will facilitate a deep engagement with the broadest range of appropriate investors.”
Mereo noted that its continues to expect “several value inflection points” next year, including data from its Phase IIb dose ranging study for BPS-804 for osteogenesis imperfecta and data from its Phase II dose ranging study for MPH-966 for alpha-1 antitrypsin deficiency, both being run in the US and Europe.
“Alongside these milestones, we are also progressing partnering discussions for our other two products, BCT-197 for acute exacerbations of COPD and BGS-649 for hypogonadotropic hypogonadism. We also intend to begin partnering discussions for OncoMed’s navicixizumab programme, which has generated encouraging clinical data in ovarian cancer that should guide further clinical development,” Scots-Knight added.
The transaction is expected to complete in the first half of next year.