Poolbeg slumps as Hookipa merger is called off

A proposed merger of the UK's Poolbeg Pharma with Austrian biotech Hookipa has been called off after the latter abruptly withdrew from negotiations.

The news was announced in a stock exchange filing by Poolbeg this morning that said the company was "surprised and disappointed" by Hookipa's decision.

In January, London-listed Poolbeg said it was pursuing an all-share merger with Hookipa, which is listed on the Nasdaq in the US, to create a biopharma company focused on immunotherapies for the treatment of cancer and other serious diseases.

It would have two principal assets – Poolbeg's phase 2-ready POLB 001, an orally delivered p38 MAP kinase inhibitor therapy being developed for cancer immunotherapy-induced cytokine release syndrome, and 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 being prepared for phase 1.

The proposal would have resulted in Poolbeg shareholders owning 55% of the combined company, which would retain its Nasdaq listing, but would have been followed by a financing round that would reduce that stake to around 40%.

Poolbeg's update didn't reveal the reasons for the breakdown in negotiations, while Hookipa said that it has "determined that it does not intend to make an offer for Poolbeg," also without giving any explanation.

In a statement, the UK company's co-founder Cathal Friel – who was supposed to become executive chairman of the new company – said: "Throughout this process, we have seen strong interest in the potential of POLB 001 and we continue to be focused on maximising the potential of our in-house programmes and exploring new opportunities to generate value for our shareholders."

The merger proposal came shortly after Hookipa said it would halt 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.

Along with POLB 001, which Poolbeg maintains could address a potential $10 billion-plus market worldwide, the UK firm's pipeline also includes an oral GLP01 receptor agonist with potential in obesity and diabetes.

Poolbeg had around £10 million (around $13 million) in cash reserves at end-June 2024, according to its interim results announcement, while Hookipa was sitting on just under $60 million. Shares in Poolbeg were down 16% in mid-morning trading, while Hookipa stayed largely unchanged.