- Merck & Co. will acquire California-based Immune Design for about $300 million, aiming to strengthen its vaccine development capabilities.
- The deal would give Merck access to Immune Design's two in vivo technology platforms, ZVex and GLAAS, which aim to create — and in the case of GLAAS also expand — cytotoxic immune cells. The biotech developed its lead candidate through GLAAS, and is testing the therapy alone or in combination with either Keytruda or Rituxan in a Phase 1/2 study of follicular non-Hodgkin lymphoma patients.
- A Merck subsidiary will make an initial tender offer to acquire all outstanding shares of Immune Design for $5.85 apiece, representing a roughly 312% premium over the target's Wednesday closing share price. The big pharma predicts the deal will close early in the second quarter.
One of the big four vaccine developers, Merck has been on the hunt to explore vaccine-based approaches outside of infectious disease, with cancer being a primary target.
Merck and mRNA specialist Moderna Therapeutics are already partnered on at least two cancer vaccines. A Phase 1 study of mRNA-4157, which attempts to make cancer cells more easily recognizable to the immune system, should wrap up in September. Meanwhile, the companies are also advancing mRNA-5671, a therapy focused on mutations in the KRAS oncogene, toward in-human trials.
Snapping up Immune Design may provide a shot in the arm to Merck's pursuits, at least according to company executives.
"Scientists at Immune Design have established a unique portfolio of approaches to cancer immunization and adjuvant systems designed to enhance the ability of a vaccine to protect against infection, which could meaningfully improve vaccine development," Roger Perlmutter, president of Merck Research Laboratories, said in a Feb. 21 statement.
As for Immune Design, CEO Carlos Paya noted how the deal creates shareholder value and puts his company's technology in a good hands.
The deal isn't yet finalized, however. Merck would need a majority of Immune Design’s total outstanding shares to complete its initial tender offer. If that offer is successful, Merck would then move to acquire all shares not purchased in the tender through a second-step merger.
Still, at a more than 300% premium it's hard to see where Immune Design investors would push back against Merck's offer. SVB Leerink analyst Jonathan Chang wrote in a Feb. 21 note to the biotech's investors that the investment bank views it as "unlikely that other bidders will emerge at this point."
Immune Design has in place licensing agreements with Sanofi and AstraZeneca's MedImmune, as well as a clinical collaboration with Roche's Genentech.
A Merck spokesperson said the company "will evaluate all of Immune Design’s partnerships following closing."