Merck & Co., Inc. (NYSE:MRK) has reached an agreement for the acquisition of Rigontec, in a deal worth $137 million in cash. The deal also includes $417 million in additional payments tied to clinical, development, regulatory and commercial milestones.
Merck’s valuation of Rogontec is 15 times more the $34.9 million that Rigontec raised in a recent Series A financing round. Boehringer Ingelheim Venture Fund, Sunstone Capital, and Wellington Partners Life Sciences are some of the institutional investors believed to have shown interest in acquiring the company. Merck has been active in the mergers & acquisition market as it continues to pursue deals that have the potential to strengthen its oncology portfolio.
The acquisition should expand Merck’s cancer immunotherapy franchise that currently is led by Keytruda. Approved in 2014, the skin cancer drug generated $1.402 billion in revenue last year.
Immunotherapy is a rapidly expanding field of cancer where focus in the recent past has turned to using patients’ immune system to identify and destroy cancerous cells. Keytruda is currently the anchor of cancer immunotherapy research effort in the space.
Rigontec RNA Therapies
Rigontec is a leading developer of RNA-based immunotherapies that are under trials for use in the treatment of various types of cancer and viral disease. Founded in 2014, the company boast of proprietary agonists, designed to activate RIG-I to induce both immediate and long term antitumor immunity
The Munich based companies says its proprietary technology can be used to develop functional RNA molecules for the treatment of infectious and inflammatory diseases. Its lead candidate drug, RGT100, is currently in Phase 1 development for the treatment of various tumors.
“Rigontec’s immuno-oncology approach of engaging the innate immune system to safely eliminate cancer cells complements our strategy and our current pipeline. We are eager to build upon Rigontec’s science as we continue our efforts in bringing forward meaningful advances for patients with cancer,” said Eric Rubin, of Merck Research Laboratories.
Merck was up by 0.50% in Thursday’s trading session to end the day at $64.32 a share