London-listed Poolbeg discussing Hookipa merger

The UK's Poolbeg Pharma has disclosed that it is in talks over a possible combination with Hookipa, an Austrian biotech that is listed on the Nasdaq.

The all-share merger – which, if completed, would see Poolbeg de-list from the London Stock Exchange's AIM – would create a "strong clinical-stage biopharmaceutical company focused on developing and commercialising innovative medicines for critical unmet medical needs, with a special focus on next-generation immunotherapies for the treatment of cancer and other serious diseases," according to a statement.

Under the proposed terms, Poolbeg shareholders would receive 0.03 Hookipa shares for each Poolbeg share they own, resulting in Poolbeg backers owning 55% of the enlarged company, which would retain its Nasdaq listing. However, Hookipa has indicated it will raise $30 million in funding upon completion of the deal, which would reduce Poolbeg's stake to around 40%.

Poolbeg co-founder Cathal Friel would become executive chairman of the new company, according to the statement, with Hookipa's chief executive, Malte Peters, retaining that role if the transaction goes through.

The combined company would have an in-house pipeline that includes Hookipa's multi-KRAS targeting immunotherapy HB-700 for KRAS-mutated cancers, including pancreatic, colorectal, and lung cancer, which has generated preclinical results and is ready for phase 1 trials, and Poolbeg's small molecule POLB 001, an orally delivered p38 MAP kinase inhibitor therapy being developed for cancer immunotherapy-induced cytokine release syndrome that is heading for phase 2.

It would also have two Hookipa programmes partnered with Gilead Sciences, namely HB-500, an alternating, 2-vector arenaviral therapeutic vaccine that is being evaluated as part of a potential curative regimen for HIV, and HB-400, which is based on similar technology and is directed against hepatitis B virus (HBV).

The announcement comes a few weeks after Hookipa said it would pause the development of its former lead candidate eseba-vec, which had reached phase 1/2 testing for human papillomavirus type 16 (HPV16) positive cancers, and slash around 80% of its workforce as it turned its focus on HB-700. There was no mention of eseba-vec in the combined company's plans.

News of the merger discussions caused Poolbeg's share price to fall around 40%, while Hookipa remained largely unchanged, although, it remains at a fraction of its 52-week high point following the restructuring announcement.

Hookipa, which has set up a webpage to allow shareholders to track progress with the potential deal and associated fundraising, said that the merger would create a company with "clinical data expected across multiple programmes over the next 24 months in large therapeutic areas with unmet medical needs."