Merck & Co. to pay $1 billion upfront to buy Peloton Therapeutics, gaining late-stage renal cancer drug PT2977

Merck & Co. agreed to acquire all outstanding shares of Peloton Therapeutics under a deal potentially worth up to $2.1 billion, including an upfront cash payment of $1 billion, the companies announced Tuesday. The transaction will bolster Merck's oncology pipeline with the addition of Peloton's lead candidate PT2977, an oral HIF-2 alpha inhibitor in late-stage development for renal cell carcinoma (RCC).

"This acquisition exemplifies Merck's strategy to pursue novel therapeutic candidates," remarked Roger Perlmutter, president of Merck Research Laboratories, adding that PT2977 "has already shown intriguing activity in the treatment of [RCC]." Mid-stage data presented in April showed that among 55 previously-treated patients with advanced RCC who received PT2977, 22 percent had a confirmed partial response, while median progression-free survival had not been reached at the time.

PT2977 is also being investigated in a Phase II trial in von Hippel-Lindau disease-associated RCC, a mid-stage study in combination with Exelixis' cabometyx (cabozantinib) in metastatic RCC, as well as Phase I/II trial in glioblastoma multiforme.

Under the transaction, along with the upfront payment, Peloton shareholders are eligible to receive a further $1.15 billion linked to regulatory and sales milestones for certain candidates. The purchase is expected to close in the third quarter.

The deal comes shortly after Peloton announced plans to raise as much as $150 million via an initial public offering, which at the mid-point of the expected share price range would have valued the company at around $742 million. Meanwhile, in February, Peloton brought in $150 million via a Series E financing.

 

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