Dive Brief:
- Day One Biopharmaceuticals is buying struggling cancer drug developer Mersana Therapeutics, offering $129 million up front to gain control of an experimental cancer drug in early-stage testing, the companies said Thursday.
- Per deal terms, Mersana stockholders will receive $25 a share, representing an equity value of $129 million and a roughly 180% premium to the company’s closing stock price on Wednesday. But the bulk of the payouts — an additional $30.25 per share — would only materialize if Mersana’s drug hits a variety of future milestones. The deal’s value would reach $285 million if it does.
- Mersana, a developer of a type of targeted cancer treatment called an antibody-drug conjugate, has tested and discontinued several experimental prospects because of safety issues or poor efficacy. Earlier this year, it slashed its workforce and trimmed research to fund operations through late 2026.
Dive Insight:
Day One successfully won an accelerated approval last year of a drug called Ojemda for a certain type of pediatric brain cancer. The company’s research costs, which include a confirmatory study for Ojemda plus early testing of its own ADC candidate, cost Day One $31 million in the third quarter, nearly equal to the roughly $40 million in revenue it earned from drug sales and licensing agreements.
The acquisition adds to Day One’s costs a pipeline that Mersana spent $16 million on in the second quarter (the company reports its latest earnings results on Friday). But those expenses were in large part tied to development of an ADC called emiltatug ledadotin, or emi-le, that Day One sees as a solution for a tumor in need of better treatment options.
Emiltatug ledadotin, or emi-le, targets a protein called B7-H4 that is overexpressed in several cancers. Mersana has been focusing development in a tough-to-treat “triple-negative” form of breast cancer. At the American Society of Clinical Oncology meeting earlier this year, the company presented data showing emi-le stimulated a response in 31% of trial enrollees, and had a higher response rate in those who had undergone four or more lines of treatment.
Day One, however, intends to prioritize development of emi-le in a different, rare and aggressive type of tumor called adenoid cystic carcinoma type 1, or ACC-1. There, emi-le has demonstrated “early anti-tumor activity” and could address a “clear unmet need,” the company said, adding that the data to date “may support a fast path to registration” given the lack of effective treatment options.
“This acquisition will add a potential game-changing new medicine to the Day One portfolio and, if approved, will broaden our opportunities for patient impact and for continued growth and value creation,” said Day One CEO Jeremy Bender, in a statement.
The Mersana board has unanimously voted in favor of the deal, which is expected to close by the end of January 2026. Mersana’s shareholders could receive a $4 increase in their payment in the near term if Day One begins testing emi-le in a pivotal trial in patients with ACC-1 tumors.
Another $9 per share would materialize following FDA approval, but the full $30.25 won’t be paid out unless it emi-le receives additional clearances and tops $300 million in annual sales by 2037.
