Merck to Buy OncoImmune and Potential Coronavirus Drug for $425 Million

Merck is expanding further into the biotech sector by acquiring Rockville, Md., biopharma company OncoImmune for $425 million, netting in the process an investigational drug that has shown promise as a treatment for hospitalized COVID-19 patients.

The purchase, which is expected to get regulatory approval by the end of the year, will see Merck obtain CD24Fc, OncoImmune’s lead investigational compound. In September, the recombinant protein showed positive results in a phase 3 trial as a treatment for patients hospitalized with COVID-19. Merck said it intends to accelerate development of the candidate after the deal goes through.

“Recent clinical investigations support the view that CD24Fc may provide benefit beyond standard-of-care therapy for COVID-19 patients requiring oxygen support and hence will represent an important addition to the Merck pipeline of investigational medicines and vaccines designed to address the COVID-19 pandemic,” said Roger Perlmutter, president of Merck Research Laboratories.

According to data from 203 participants in the late-stage trial, patients with severe or critical COVID-19 given a single dose of the investigational drug showed a 60 percent greater chance of improving compared to those given a placebo, and the drug cut the risk of respiratory failure or death by more than 50 percent. The trial is ongoing and plans to enroll 270 participants in total.

Before the purchase becomes final, OncoImmune will spin out certain assets unrelated to the CD24Fc program into a new company its existing shareholders will own, Merck said, adding that it will invest $50 million into that entity. OncoImmune will also stand to earn sales-based and regulatory milestone payments under the agreement.

The new purchase is Merck’s latest expansion into biotech. Near the end of 2015, the company shelled out a massive $17 billion to acquire German biotech company Sigma-Aldrich. More recently, in October 2019, Merck acquired Massachusetts-based FloDesign Sonics, a company developing an acoustic cell-processing technology for industrializing cell and gene therapy manufacturing, for an undisclosed amount. — James Miessler