Merck adds to I-O stable with $300m Immune Design buy

Just a few months after Immune Design saw its shares crater on a phase II fail, Merck & Co/MSD has agreed a deal to acquire the biotech and its immuno-oncology and vaccines pipeline.

Merck is forking out $5.85 per share for the California company, a sizeable premium on Immune Design’s share price of around $1.50 in the weeks building up to the deal, and which values it at around $300 million. Shares in the biotech shot up immediately to approach the offer value.

Back in October, Immune Design’s stock plummeted more than 40% after it abandoned its lead CMB305 cancer vaccine programme after reporting disappointing mid-stage trial results in combination with Roche’s checkpoint inhibitor Tecentriq (atezolizumab) in patients with relapsed synovial sarcoma (SS), a rare form of soft tissue cancer.

As a result, the biotech pivoted its pipeline towards G100, a toll-like receptor 4 (TLR4) agonist in phase I/II testing for follicular non-Hodgkin’s lymphoma (NHL), and vaccines for respiratory syncytial virus (RSV) and peanut allergies. It didn’t abandon CMB305 entirely, but said it would try to find a partner to take development of the vaccine forward in sarcoma.

Merck will be able to fold Immune Design’s pipeline programmes into its immuno-oncology portfolio – headed by blockbuster checkpoint inhibitor Keytruda (pembrolizumab) – and its vaccines division, and the $300 million price tag looks pretty reasonable in the context of other recent oncology takeovers.

Its immuno-oncology approach uses a tumour’s individual composition against itself. Its GLAAS and ZVex platforms are designed to activate the immune system’s natural ability to generate and/or expand antigen-specific cytotoxic immune cells to fight cancer, as well as other chronic diseases.

ZVex uses a vector delivery system based on a re-engineered virus to carry the genetic information of a tumour antigen to dendritic cells in the body, which then stimulate cytotoxic T lymphocytes (CTLs) which directly attack malignant cells. The most advanced programme in Immune Design’s pipeline is a preclinical candidate that delivers interleukin-12.

The GLAAS platform – which is the basis of G100 - is based on a small synthetic molecule called GLA that bids to the TLR4 receptor.  When GLA is accompanied by a tumour antigen and injected into a patient, the combination is taken up by dendritic cells and leads to the production and expansion of CD4 T helper lymphocytes, boosting the CTL response.

“Scientists at Immune Design have established a unique portfolio of approaches to cancer immunisation and adjuvant systems designed to enhance the ability of a vaccine to protect against infection, which could meaningfully improve vaccine development,” said Roger Perlmutter, president of Merck Research Laboratories.