Merck & Co. has agreed to acquire Peloton Therapeutics for up to $2.2 billion, the companies said today, in a deal designed to expand the buyer’s cancer pipeline with a candidate in Phase II development for renal cell carcinoma (RCC)—just a week after Peloton filed for an amended initial public offering (IPO) seeking to raise up to $157.9 million in net proceeds.

Peloton’s lead candidate, PT2977, is a small molecule oral inhibitor of hypoxia-inducible factor-2α (HIF-2α) that is being evaluated as a treatment for RCC in two Phase II trials, a Phase I/II study assessing the candidate in RCC, and an expansion arm of that study in glioblastoma multiforme (GBM).

Peloton reasons that in various cancers, HIF-2α is aberrantly activated as a result of the inactivity of the VHL tumor suppressor. That inactivation has been seen in over 90% of clear cell RCC, the most common form of kidney cancer.

“Peloton scientists have applied their unique expertise in HIF-2α biology to develop PT2977, which has already shown intriguing activity in the treatment of renal cell carcinoma,” Roger M. Perlmutter, MD, PhD, president, Merck Research Laboratories, said in a statement. “This acquisition exemplifies Merck’s strategy to pursue novel therapeutic candidates based on exceptionally promising and innovative research.”

The deal is Merck’s second in three months focused on boosting its oncology pipeline. The first was announced February 21 when Merck agreed to acquire cancer vaccine developer Immune Design for approximately $300 million, a transaction completed April 2.

In Merck’s most recent quarterly conference call with analysts on April 30, chairman and CEO Kenneth C. Frazier signaled the company’s continuing interest in potential acquisitions by saying it was “focused on advancing our promising pipeline and continuing to augment our internal research and development efforts with external innovation.

“We are excited by the prospect of our pipeline, which includes potential new treatments and vaccines [in] oncology, HIV, and many other areas of significant and ongoing unmet needs,” Frazier said, according to a transcript published by Seeking Alpha.

PT2977 is being evaluated in a Phase II clinical trial in von Hippel-Lindau (VHL) disease-associated RCC (NCT03401788), which completed patient enrollment on April 9; a Phase II trial in combination with cabozantinib, a VEGFR-targeting agent, in metastatic RCC (NCT03634540); and a Phase I dose-escalation and dose-expansion trial assessing PT2977 tablets in patients with advanced solid tumors, including RCC, and an expansion arm studying the treatment in GBM (NCT02974738).

Promising Phase II data

On April 1, at the Fourteenth European International Kidney Cancer Symposium in Dubrovnik, Croatia, Peloton presented Phase II data showing favorable safety and early signs of anti-tumor activity as a monotherapy for the treatment of patients with advanced RCC. Among the 55 patients who were treated at the RP2D, 12 patients (22%) had a confirmed partial response. Median progression-free survival (PFS) was not yet reached in the study with a median follow-up of nine months, and 36% of patients remained on study at the time of the data cut-off, according to Peloton.

“The data presented today pave the way for a planned monotherapy Phase III trial that will further explore this exciting new mechanism of action in patients with advanced kidney cancer,” Peloton CEO John A. Josey, PhD, stated at the time.

Merck, through a subsidiary, plans to acquire all outstanding shares of Peloton in exchange for $1.05 billion cash upfront. Merck has also agreed to pay Peloton shareholders up to $1.15 billion tied to achieving regulatory and sales milestones.

Merck’s planned acquisition comes about a month after Peloton first filed for an IPO on April 26. On May 13, Peloton filed an amended S-1 registration form disclosing plans to generate at least $137 million in net proceeds—or $157.9 million if underwriters exercise their option to acquire additional shares in full, at the $16 IPO price.

Of the IPO’s net proceeds, Peloton stated:

  • Approximately $75 million to $85 million would be spent on funding development of PT2977, including a planned Phase III clinical trial in previously treated mRCC patients and the current Phase II trial in patients with VHL disease;
  • Approximately $10 million would advance the development of Peloton’s other pipeline candidate, the preclinical PT2567 for pulmonary arterial hypertension (PAH), including a planned Phase I trial.
  • Approximately $10 million “to fund new and ongoing activities for our research-stage programs.”
  • The remainder would fund general research and development activities, working capital and other general corporate activities.

“Merck is recognized as a leader in cancer research and shares our commitment to accelerating the development of candidates targeting HIF-2α to help patients with advanced cancers and other diseases,” Josey said. “We are proud to have advanced PT2977 to this stage of development and believe that Merck is well suited to build upon the progress our company has made.”



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