Merck supports its drug pipeline with Buyout for $1.35 billion of Imago BioSciences, a biotech developing therapies for blood and bone marrow disorders that could offer advantages over currently available treatments. The deal, announced Monday, comes weeks ahead of Imago’s planned presentations of key interim clinical data supporting pivotal tests of its lead drug candidate. It also comes before a rival big pharma company with an inside track could make a play on the biotech.
Imago develops treatments for myeloproliferative neoplasms, a group of diseases in which the bone marrow produces an excess of red blood cells, platelets, or certain types of white blood cells. The extra cells that accumulate in the blood and bone marrow can cause problems such as bleeding, anemia, infection, and fatigue. They can also lead to cancer.
The Imago drug pipeline consists of a single drug candidate, bomedemstat, which is in development for the treatment of several different types of myeloproliferative neoplasms. The South San Francisco-based biotech has reached mid-stage clinical trials in two types of bone marrow cancer, myelofibrosis and essential thrombocythemia. Bomedemstat is a small molecule designed to block lysine-specific demethylase 1 (LSD1), an enzyme that plays a key role in the production of blood cells by the bone marrow. Inhibiting this enzyme aims to modulate the production of cancerous blood cells.
Bomedemstat was discovered and developed by Imago. With the drug, the company aims to offer a safer and potentially more effective alternative to currently available treatments for myelofibrosis. FDA approval of Jakafi in 2011 made this drug Incyte the first approved therapy for blood cancer. Since then, Inrebic from Bristol Myers Squibb and soonest Vogno, from CTI BioPharmawon regulatory nods in myelofibrosis. GSK joins pursuit of myelofibrosis drugs with $1.9 billion acquisition of Sierra Oncology earlier this year. Sierra’s drug, momelotinib, is currently under FDA review and expected to receive regulatory approval decision by mid-2023. All four drugs are JAK inhibitors, and although this class of drugs has shown efficacy in a number of diseases, these drugs also fall under regulatory control for dangerous and potentially fatal side effects.
The phase 2 study of Bomedemstat in myelofibrosis included patients whose disease was not adequately controlled by JAK-blocking drugs. At the European Society of Hematology Annual Meeting in June, Imago presented interim data from phase 2 trials of bomedemstat in advanced myelofibrosis and essential thrombocythemia.
Imago is scheduled to present updated clinical trial results at the American Society of Hematology (ASH) annual meeting next month. According to art myelofibrosis research summary undergoing ASH, patients treated with the drug Imago showed improvements in several parameters. Of those who could be evaluated at week 24, 66% showed a decrease in spleen volume (an enlarged spleen is one of the complications of myelofibrosis). Of those who needed blood transfusions to manage the disease, 14% became transfusion independent. No dose-limiting toxicity was reported, nor were there any drug-related deaths. None of the patients in the study had disease that progressed to acute myeloid leukemia. Imago is planned to present the data on 12 Dec.
Merck is putting a lot of money into trying to develop and commercialize an alternative to JAK inhibitors. Under the terms of the acquisition agreement, the Raway, New Jersey-based pharmaceutical giant will pay $36 in cash for each Imago share, a 107% premium to the biotech’s stock price at Friday’s close. Shares of the biotech jumped on Monday, opening nearly at that price. This is Merck’s second blood disease acquisition this year, following $11.5 billion buyout of Acceleron Pharma, whose lead drug candidate, sotatercept, is a potential treatment for pulmonary arterial hypertension.
“We continue to invest in our pipeline with a focus on applying our unique capabilities to unlock the value of breakthrough science for the patients we serve,” Merck President and CEO Robert Davis said in a prepared statement. “This acquisition of Imago expands our line and strengthens our presence in the growing field of hematology.”
When Imago raised $134 million in an IPO last year, the biotech company priced its shares at $16 apiece. Concurrent with the IPO, Pfizer purchased $20 million worth of Imago stock. In exchange, Imago agreed to give Pfizer early access to clinical and preclinical data on bomedemstat up to 30 months after the IPO, according to Imago’s IPO prospectus. It is unclear whether Pfizer has made a competing bid for Imago, but the data-sharing requirement will end with a change in control of the company, Imago filings said.
Imago’s board of directors unanimously approved the acquisition by Merck. The company said in a securities filing that he has agreed not to seek other bids, although the board may respond to unsolicited bids. If Imago decides to terminate the agreement to acquire Merck, it must pay a termination fee of $47.1 million, according to the filing. The companies expect to close the transaction in the first quarter of 2023.