Merck & Co has agreed to acquire OncoImmune, a Rockville, Maryland-based clinical-stage biopharmaceutical company with a drug to treat COVID-19 in Phase III development, in a $475-million deal.

OncoImmune recently announced positive findings from an interim efficacy analysis of a Phase III study evaluating its lead therapeutic candidate, CD24Fc, for the treatment of patients with COVID-19. Overall, the company is focused on the discovery and development of biopharmaceuticals for the treatment of cancer and autoimmune disease.

Merck, through a subsidiary, will acquire all outstanding shares of OncoImmune for an upfront payment of $425 million. In addition, OncoImmune shareholders will be eligible to receive sales-based payments and payments contingent on the successful achievement of certain regulatory milestones.

Under the agreement, prior to the completion of the acquisition, OncoImmune will spin out certain rights and assets unrelated to the CD24Fc program to a new entity to be owned by the existing shareholders of OncoImmune. In connection with the closing of the acquisition, Merck & Co. will invest $50 million and become a minority shareholder, in the new entity.

The closing of the acquisition, which is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, is expected before the end of 2020.

Source: Merck & Co. and OncoImmune