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Mereo’s shareholders back OncoMed takeover

Deal expected to go through next week

Mereo BioPharma

UK company Mereo BioPharma is on the brink of a US listing, via the takeover of troubled US biotech OncoMed, after the deal was backed by OncoMed shareholders at a meeting yesterday.

The deal – first announced last December – should go though next week with Mereo’s American Depositary Receipts starting to trade on the Nadasq on 24 April.

Mereo is already listed on the UK AIM but accessing the US capital markets will give it more scope to raise funding for its pipeline, currently headed by BPS-804 (setrusumab), a sclerostin-targeting antibody for osteogenesis imperfecta, commonly known as brittle bone disease which is in a phase 2b trial.

California-based OncoMed was formed in 2004 to develop antibody drugs targeting cancer stem cells – known as tumour-initiating cells – and managed to gather a sizeable group of development partners including GlaxoSmithKline, Bayer and Celgene, whilst raising hundreds of millions of dollars in funding.

It went public in 2013, raising $81m, but a couple of years later started to suffer a series of major clinical setbacks that all-but obliterated its clinical pipeline. GSK-partnered tarextumab for pancreatic cancer was the first casualty in 2016, followed by Celgene-partnered demicizumab a year later, and then Bayer pulled out of its alliance.

That prompted a cull of the pipeline and big job losses, with OncoMed focusing its energies on early-stage candidates navicixizumab, etigilimab and OMP-336b11 for solid tumours, plus a fourth drug – rosmantuzumab – that was dropped last year.

OncoMed ended 2018 with around $57m in cash, and at the time the deal was announced Mereo said the combined company would have around $115m on hand.

Those programmes will slot into Mereo’s pipeline alongside its other clinical candidates, including MPH-966 for alpha-1 antitrypsin deficiency (AATD) and BGS-649 for hypogonadotropic hypogonadism in phase 2, as well as BCT-197 for severe exacerbations of chronic obstructive pulmonary disease (COPD) which is heading for a phase 3 trial.

After the merger goes through, OncoMed will be a wholly-owned subsidiary of Mereo, with the combined company 75% owned by Mereo shareholders.

18th April 2019

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