Proposed Acquisition of Viralytics Would Add
Investigational Oncolytic Immunotherapy, CAVATAK®,
Supporting Merck’s Strategy to Broaden Its Pipeline with the Best
Scientific Assets
Merck (NYSE: MRK), known as MSD outside the United States and
Canada, and Viralytics Limited (ASX: VLA, OTC: VRACY) today
announced that the companies have signed a definitive agreement
under which it is proposed that Merck, through a subsidiary, will
acquire Viralytics, an Australian publicly traded company focused
on oncolytic immunotherapy treatments for a range of cancers by way
of a scheme of arrangement (Scheme) for AUD 1.75 cash per
Viralytics share. The proposed acquisition values the total issued
shares in Viralytics at approximately AUD 502 million (USD 394
million). The cash consideration of AUD 1.75 per share represents a
premium of 160% to the one month volume weighted average price
(VWAP) of Viralytics shares.
This press release features multimedia. View
the full release here:
http://www.businesswire.com/news/home/20180221005575/en/
On completion of the transaction, Viralytics will become a
wholly-owned subsidiary of Merck, and Merck will gain full rights
to CAVATAK® (CVA21), Viralytics’s investigational oncolytic
immunotherapy. CAVATAK is based on Viralytics’s proprietary
formulation of an oncolytic virus (Coxsackievirus Type A21) that
has been shown to preferentially infect and kill cancer cells.
CAVATAK is currently being evaluated in multiple Phase 1 and
Phase 2 clinical trials, both as an intratumoral and intravenous
agent, including in combination with Merck’s KEYTRUDA®
(pembrolizumab), an anti-PD-1 therapy. Under an agreement between
Viralytics and a subsidiary of Merck, announced in November 2015, a
study is investigating the use of the CAVATAK and KEYTRUDA
combination in melanoma, prostate, lung and bladder cancers.
“Viralytics’s approach of engaging the innate immune system to
target and kill cancer cells complements our immuno-oncology
strategy, which is focused on the rapid advancement of innovative
monotherapy approaches and synergistic combinations to help the
broadest range of cancer patients,” said Dr. Roy Baynes, senior
vice president and head of global clinical development, chief
medical officer, Merck Research Laboratories. “We are eager to
further build on Viralytics’s science as we continue our efforts to
harness the immune system to improve long-term disease control and
survival outcomes for people with cancer.”
“This proposed acquisition culminates years of dedicated work by
the Viralytics team and represents an opportunity for significant
value creation for our shareholders. Viralytics is proud to have
progressed its lead investigational candidate CAVATAK to Phase 1
and Phase 2 clinical trials and, we believe that Merck, the leader
in immuno-oncology, is best suited to advance CAVATAK for the
benefit of patients globally, and to realize its potential,” said
Dr. Malcolm McColl, managing director and chief executive officer,
Viralytics.
The board of directors of Viralytics unanimously recommends that
its company’s shareholders vote in favor of the Scheme, subject to
there being no superior proposal and an independent expert
concluding that the Scheme is in the best interest of the company’s
shareholders. It is the intention of Viralytics’s directors to vote
all the shares of Viralytics held or controlled by them in favor of
the Scheme, subject to those same qualifications. Merck and
Viralytics anticipate the transaction will be implemented by the
second quarter of 2018. Implementation of the transaction is
subject to a Viralytics’s shareholder vote and customary regulatory
approvals.
Viralytics’s largest shareholder, Lepu Medical Group, which
currently holds voting power in 13 percent of the Viralytics’s
shares, has informed Viralytics that it intends to vote the shares
it holds at the time of the Scheme meeting in favor of the Scheme,
in the absence of a superior proposal and subject to the Viralytics
directors maintaining their recommendation to vote in favor of the
Scheme.
Chairman of Lepu Medical Group, Dr. Pu stated, “Lepu Medical
Group acknowledges this is an attractive opportunity for Viralytics
and, as such, is supportive of the transaction. In line with its
existing strategy, Lepu Medical Group intends to continue to focus
on developing immuno-oncology therapies, including in collaboration
with companies globally.”
Transaction Terms and Implementation Process
The Scheme proposes that Merck acquires 100 percent of the
issued shares in Viralytics. Implementation of the Scheme will be
subject to customary conditions, including Viralytics shareholder
approval, court approval, regulatory approval, an independent
expert concluding, and continuing to conclude, that the Scheme is
in the best interest of shareholders, and no material adverse
change or prescribed event occurring.
More information on the Scheme and conditions is provided in a
copy of the scheme implementation agreement which has been appended
to this announcement. The agreement also contains exclusivity
provisions that are customary in Australia, including “no shop”,
“no talk” and “no due diligence” provisions, a break fee, as well
as a notification obligation and matching right. The “no talk”, “no
due diligence” and notification obligation provisions are subject
to the directors’ fiduciary obligations.
A scheme booklet is expected to be dispatched to Viralytics
shareholders in April 2018. The scheme booklet will contain
information relating to the Scheme, the independent expert’s report
on whether the Scheme is in the best interests of Viralytics
shareholders, the reasons for the directors’ unanimous
recommendation and details of the Scheme meeting and other matters
relevant to Viralytics shareholders’ vote on the Scheme.
Indicative timetable
A number of expected key dates relevant to the proposed
acquisition have been outlined below.
Key milestones Date (AEDT)
Announcement of the proposed
acquisition
February 21, 2018
First court hearing April 23, 2018 Scheme booklet dispatched to
Viralytics shareholders April 27, 2018 Viralytics shareholder
meeting to approve the scheme May 28, 2018 Final court hearing June
4, 2018 Implementation date June 20, 2018
Advisors
Credit Suisse Securities (USA) LLC is serving as financial
advisor to Merck, and Baker & McKenzie is serving as Merck’s
legal counsel. Lazard is serving as financial advisor and
McCullough Robertson is serving as legal counsel to Viralytics.
About CAVATAK
Viralytics is developing oncolytic immunotherapy treatments for
a range of cancers. The company’s lead investigational product,
CAVATAK®, is currently being studied in clinical trials for the
treatment of melanoma, as well as bladder and lung cancers. CAVATAK
is a proprietary formulation of the Coxsackievirus Type A21 (CVA21)
that preferentially binds to specific ‘receptor’ proteins highly
expressed on multiple cancer types. CAVATAK acts to kill both local
and metastatic cancer cells through cell lysis and the potential
generation of an immune response against the cancer cells – a
two-pronged mechanism of action known as oncolytic
immunotherapy.
About Viralytics Limited
Viralytics is focused on the development and commercialization
of oncolytic immunotherapies that harness the power of specific
viruses to preferentially infect and kill cancer cells. Based
in Sydney Australia, the company is listed on the Australian
Securities Exchange (ASX: VLA) while Viralytics’s ADRs also trade
under VRACY on the US OTCQX International market. For more
information, please visit www.viralytics.com.
Merck’s Focus on Cancer
Merck’s goal is to translate breakthrough science into
innovative oncology medicines to help people with cancer worldwide.
At Merck, helping people fight cancer is our passion and supporting
accessibility to our cancer medicines is our commitment. Our focus
is on pursuing research in immuno-oncology and we are accelerating
every step in the journey – from lab to clinic – to potentially
bring new hope to people with cancer.
As part of our focus on cancer, Merck is committed to exploring
the potential of immuno-oncology with one of the fastest-growing
development programs in the industry. We are currently executing an
expansive research program evaluating our anti-PD-1 therapy across
more than 30 tumor types. We also continue to strengthen our
immuno-oncology portfolio through strategic acquisitions and are
prioritizing the development of several promising immunotherapeutic
candidates with the potential to improve the treatment of advanced
cancers.
For more information about our oncology clinical trials, visit
www.merck.com/clinicaltrials.
About Merck
For more than a century, Merck, a leading global
biopharmaceutical company known as MSD outside of the United States
and Canada, has been inventing for life, bringing forward medicines
and vaccines for many of the world’s most challenging diseases.
Through our prescription medicines, vaccines, biologic therapies
and animal health products, we work with customers and operate in
more than 140 countries to deliver innovative health solutions. We
also demonstrate our commitment to increasing access to health care
through far-reaching policies, programs and partnerships. Today,
Merck continues to be at the forefront of research to advance the
prevention and treatment of diseases that threaten people and
communities around the world - including cancer, cardio-metabolic
diseases, emerging animal diseases, Alzheimer’s disease and
infectious diseases including HIV and Ebola. For more information,
visit www.merck.com and connect with us
on Twitter, Facebook, Instagram, YouTube
and LinkedIn.
Viralytics Forward-Looking Statements
Certain statements made in this presentation are forward looking
statements within the meaning of the safe harbor provisions of the
United States Private Securities Litigation Reform Act of 1995.
These forward-looking statements are not historical facts but
rather are based on Viralytics’s current expectations, estimates,
assumptions and projections about the industry in which Viralytics
operates. Material referred to in this document that use the words
‘estimate’, ‘project’, ‘intend’, ‘expect’, ‘plan’, ‘believe’,
‘guidance’ and similar expressions are intended to identify forward
looking statements and should be considered an at-risk
statement. These forward-looking statements are not a
guarantee of future performance and involve known and unknown risks
and uncertainties, some of which are beyond the control of
Viralytics or which are difficult to predict, which could cause the
actual results, performance or achievements of Viralytics to be
materially different from those which may be expressed or implied
by these statements. These statements are based on our
management’s current expectations and are subject to a number of
uncertainties and risks that could change the results described in
the forward-looking statements. Risks and uncertainties
include, but are not limited to, general industry conditions and
competition, general economic factors, the impact of pharmaceutical
industry regulation and health care legislation in the United
States and internationally, and challenges inherent in new product
development. Investors should be aware that there are no assurances
that results will not differ from those projected and Viralytics
cautions shareholders and prospective shareholders not to place
undue reliance on these forward-looking statements, which reflect
the view of Viralytics only as of the date of this presentation.
Viralytics is not under a duty to update any forward-looking
statement as a result of new information, future events or
otherwise, except as required by law or by any appropriate
regulatory authority.
Forward-Looking Statement of Merck & Co., Inc.,
Kenilworth, N.J., USA
This news release of Merck & Co., Inc., Kenilworth, N.J.,
USA (the “company”) includes “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These statements are
based upon the current beliefs and expectations of the company’s
management and are subject to significant risks and uncertainties.
There can be no guarantees with respect to pipeline products that
the products will receive the necessary regulatory approvals or
that they will prove to be commercially successful. If underlying
assumptions prove inaccurate or risks or uncertainties materialize,
actual results may differ materially from those set forth in the
forward-looking statements.
Risks and uncertainties include but are not limited to, general
industry conditions and competition; general economic factors,
including interest rate and currency exchange rate fluctuations;
the impact of pharmaceutical industry regulation and health care
legislation in the United States and internationally; global trends
toward health care cost containment; technological advances, new
products and patents attained by competitors; challenges inherent
in new product development, including obtaining regulatory
approval; the company’s ability to accurately predict future market
conditions; manufacturing difficulties or delays; financial
instability of international economies and sovereign risk;
dependence on the effectiveness of the company’s patents and other
protections for innovative products; and the exposure to
litigation, including patent litigation, and/or regulatory
actions.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause
results to differ materially from those described in the
forward-looking statements can be found in the company’s 2016
Annual Report on Form 10-K and the company’s other filings with the
Securities and Exchange Commission (SEC) available at the SEC’s
Internet site (www.sec.gov).
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180221005575/en/
Media
Contacts:MerckPamela Eisele,
267-305-3558orMerckTeresa Mueller,
908-740-1884orInvestor
Contacts:MerckMike DeCarbo,
908-740-1807orViralyticsDr. Malcolm McColl, +61 (0)2 9988
4000
Merck (NYSE:MRK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Merck (NYSE:MRK)
Historical Stock Chart
From Apr 2023 to Apr 2024