Leap Therapeutics will acquire Macrocure in a deal intended to create a stronger developer of immune-oncology treatments.

The combined company, Leap and Macrocure said, will advance development of Leap’s two first-in-class cancer immunotherapies.

One is the company’s lead development candidate DKN-01, a humanized monoclonal immunoglobulin G4 (IgG4) monoclonal antibody with neutralizing activity against the Dickkopf-1 protein that is being studied in clinical trials in esophageal cancer and cholangiocarcinoma.

Earlier this year at the European Society for Medical Oncology (ESMO) World Congress on Gastrointestinal Cancer, Leap presented data showing clinical activity for DKN-01 in combination with paclitaxel in patients with esophageal cancer. Additional data on DKN-01 plus the combination of gemcitabine and cisplatin in patients with cholangiocarcinoma will be presented at ESMO’s Annual Meeting in October.

Two years ago at the American Society for Clinical Oncology (ASCO) 2014 Annual Meeting, Leap presented data from a Phase I dose-escalation study showing that DKN-01 demonstrated clinical activity as a single agent in patients with non-small-cell lung cancer. 

At ASCO’s annual meeting this year, Leap presented Phase I data on its other immune-oncology candidate, TRX518, an aglycosylated monoclonal agonist antibody targeting the glucocorticoid-induced TNFR-related (GITR) protein. The trial showed that a single dose of TRX518 in patients with advanced solid tumors was safe and well-tolerated, with no autoimmune treatment-related adverse events, Leap said on June 5.

“We anticipate achieving substantial clinical milestones over the course of 2016 and 2017,” Leap CEO Christopher K. Mirabelli, Ph.D., said in a statement, including presenting data and initiating randomized studies for DKN-01 and reporting data from a repeat-dose study of TRX518.

Added Nissim Mashiach, Macrocure’s president and CEO: “After careful review of many alternatives, the executive team and Board of Directors of Macrocure believe this transaction provides great potential for our shareholders.”

Massiach and another Macrocure-designated person will join Leap's Board of Directors upon closing of the transaction. The combined company will be based at Leap’s corporate offices in Cambridge, MA, and be led by Leap’s executive team, which will remain in place. Christopher K. Mirabelli, Ph.D., will serve as CEO and chairman, Augustine Lawlor as COO, and Douglas E. Onsi as CFO.

Macrocure shareholders will exchange their shares for new shares of Leap common stock. On a pro forma basis, Macrocure equity holders are expected collectively to own approximately 31.8% of the combined company, with the remaining 68.2% to be owned by Leap equity holders, subject to adjustments based on Macrocure's net cash level at closing.

Existing Leap shareholders will receive the right to a royalty based on future net sales. The combined company is expected to have a minimum of $30 million cash at closing to finance future operations, Leap and Macrocure said.

Macrocure will become a wholly owned subsidiary of Leap, while Leap will become a public company, applying to list shares of the combined entity for trading on NASDAQ upon completion of the merger.

The transaction is expected to close near year end, subject to shareholder approval and other customary closing conditions. The boards of Leap and Macrocure have unanimously approved the proposed merger, while holders of approximately 51% of Macrocure voting shares have entered into agreements supporting the deal, assuring approval of the merger, according to both companies. All Macrocure shareholders will be asked to vote on the merger at a shareholders meeting.

Additionally, entities affiliated with HealthCare Ventures and Eli Lilly, which own all of Leap's outstanding voting shares, have entered into agreements supporting the proposed transaction, Leap and Macrocure added.

Existing Leap investors, including entities affiliated with HealthCare Ventures, have committed to invest an additional $10 million at the closing of the transaction.








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