Merck to Acquire Peloton Therapeutics for $2.2 Billion to Expand Oncology Portfolio

VCBeat (WeChat ID: vcbeat) has learned that on May 21, 2019, Merck & Co., Inc. announced the acquisition of biopharmaceutical company Peloton Therapeutics for up to $2.2 billion. The transaction is expected to close in the third quarter of 2019. Upon completion, Merck will gain access to Peloton Therapeutics’ lead drug candidate, PT2977.

Under the agreement, Merck & Co., Inc. will acquire all outstanding shares of Peloton Therapeutics for an upfront cash payment of $1.05 billion. Upon achievement of commercial milestones, shareholders of Peloton Therapeutics may receive an additional $1.15 billion.

Merck & Co., Inc. is a globally renowned pharmaceutical company headquartered in Kenilworth, New Jersey, USA, primarily engaged in the business of prescription drugs, vaccines, biologics, and animal health products. In 2017, Merck ranked 69th on the Fortune 500 list. In 2018, it was ranked 276th on the Fortune Global 500 list.

Peloton Therapeutics, founded in 2010, is a biopharmaceutical company dedicated to the development of novel small-molecule drugs for the treatment of cancer and other life-threatening diseases. The company is investigating PT2977, a small-molecule inhibitor of hypoxia-inducible factor HIF-2α. PT2977 blocks HIF-2α and is being developed for the treatment of renal cell carcinoma.

HIF-2α is a transcription factor that regulates the body’s response to hypoxia. Under normoxic conditions, HIF-2α remains inactive. However, inactivation of tumor suppressors can lead to abnormal activation of HIF-2α, turning it into an oncogenic driver and contributing to diseases such as renal cell carcinoma. Previously, biotechnology experts generally believed that small-molecule drugs could not inhibit HIF-2α. The research achievements of Peloton Therapeutics have pioneered the use of small-molecule inhibitors to block HIF-2α.

Studies have shown that PT2977 also has the potential to treat other cancers (such as glioblastoma multiforme, VHL disease, and GBM brain tumors). Industry insiders believe that once this drug is launched, it will shake the status of Keytruda as the "miracle anti-cancer drug."

It is understood that Peloton Therapeutics had originally planned to list on the Nasdaq Stock Exchange on May 23, aiming to raise $150 million. The proceeds from the IPO were intended to fund Phase 3 clinical trials of PT2977 to evaluate its potential in treating metastatic renal cell carcinoma. However, Merck’s substantial acquisition offer led the company to change its plans. Even excluding milestone payments, Merck’s offer significantly exceeded the amount expected from the IPO financing.

(Compiled by Jiao Yanli)