Pharmaceutical firm Merck & Co agreed yesterday to acquire oncology therapy developer VelosBio for $2.75bn in cash, enabling pharmaceutical companies Chiesi and Takeda, to exit.
Founded in 2017, VelosBio is working on cancer drugs targeted at a type of protein known as the tyrosine kinase-like orphan receptor 1.
The company’s lead product candidate, VLS-101, is an antibody-drug conjugate in a phase 1 clinical trial for haematologic malignancies and a phase 2 trial for solid tumours. It had secured $202m in funding prior to the acquisition agreement.
Hedge fund manager Matrix Capital Management and Surveyor Capital, a subsidiary of investment manager Citadel, co-led a $137m series B round for VelosBio three months ago that also featured Takeda’s corporate venturing unit, Takeda Ventures.
Adage Capital Management, Cormorant Asset Management, Farallon, Foresite Capital, Janus Henderson Investors, Logos Capital, OrbiMed, Venrock Healthcare Capital Partners, Viking Global Investors, Wellington Management, Arix Bioscience, Decheng Capital, Pappas Capital and Sofinnova Ventures filled out the round with funds and accounts advised by T. Rowe Price.
VelosBio had already received $58m in a late 2018 series A round co-led by Arix Bioscience and Sofinnova Ventures and backed by Takeda Ventures and Chiesi Ventures, the investment arm of Chiesi, as well as Pappas Ventures and Decheng Capital.
Takeda Ventures and Decheng Capital were billed as existing investors in the series A round, which came after $7.7m in funding earlier in the year according to a securities filing. It was also part of pharmaceutical group Johnson & Johnson’s JLabs accelerator in 2018.
Roger M. Perlmutter, president of Merck subsidiary Merck Research Laboratories said: “At Merck, we continue to bolster our growing oncology pipeline with strategic acquisitions that both complement our current portfolio and strengthen our long-term growth potential.
“Pioneering work by VelosBio scientists has yielded VLS-101, which in early studies has provided notable evidence of activity in heavily pre-treated patients with refractory haematological malignancies, including mantel cell lymphoma and diffuse large B-cell lymphoma.”
