Rare Daily Staff
Rare disease drug developer Mereo BioPharma Group and cancer therapeutics developer OncoMed Pharmaceuticals, two clinical-stage companies, said they have agreed to merge.
The deal will create a combined company with a diversified combined portfolio of seven assets, a cash position with an operational runway into 2020, and a core focus on Mereo’s strategy to target orphan diseases.
The transaction is expected to be completed in the first half of 2019. Both companies’ boards have unanimously approved the deal. The combined company expects to have a NASDAQ American Depositary Receipt (ADR) Level III listing, in addition to Mereo’s existing AIM listing.
Based on OncoMed’s net cash balance of $38 million at completion, current Mereo shareholders are expected to own approximately 75 percent of the of the merged company, while current OncoMed shareholders are expected to own approximately 25 percent of the new company. In addition, OncoMed shareholders will receive contingent value rights representing the right to receive future conditional cash payments and additional ADRs based on the achievement of certain milestones relating to OncoMed assets.
“The Transaction allows us to broaden our asset base, including strengthening our cash position to enable us to progress beyond our key clinical milestones,” said Mereo CEO Denise Scots-Knight.
Following completion of the merger, the Mereo board of directors will be expanded to 10 people to accommodate the appointment of current OncoMed directors Michael Wyzga and Deepa Pakianathan as independent non-executive directors. Wyzga currently serves as a CFO of Aura Biosciences and Pakianathan is a managing member at Delphi Ventures.
OncoMed is significantly reducing its workforce. It will maintain a core employee base to meet the obligations for the ongoing OncoMed operations and clinical programs. It will include the retention of key employees who will join Mereo after the completion of the transaction.
December 6, 2018
Photo: Denise Scots-Knight, CEO of Mereo