BioNTech, a German developer of cancer immunotherapies, will buy Neon Therapeutics in an all-stock deal worth $67 million, rescuing the Cambridge, Mass.-based biotech after steady share price declines forced a restructuring last November.The deal, which the companies announced Thursday, implies a purchase price of $2.18 per Neon share —technically a premium over the dollar and change the biotech has traded at since last year, but representing an 86% discount to the $16 per share that Neon debuted at in an initial public offering 18 months ago.Neon’s research centers on cell therapies engineered to target unique proteins expressed on the surface of tumors, a field of research in which BioNTech is also active.
The J.P. Morgan Healthcare Conference, which ran from Monday through Thursday this week, is looked to by Wall Street as catalyst for dealmaking. BioNTech’s buyout of Neon is probably not what they had in mind in the run-up to this year’s meeting.
The German drugmaker is acquiring Neon at a bargain price, after the biotech’s year-and-a-half run in the public markets eroded much of the company’s value.
Last November, Neon laid off nearly a quarter of its workforce and shut down investment into two of its cancer vaccine programs, a restructuring that bought it enough of a runway to last it through a good part of this year.
Instead, BioNTech will be carrying forward Neon’s research, which is now headlined by a personalized T cell therapy and an earlier stage cell treatment targeting cancers with RAS mutations.
No mention was made in BioNTech’s statement on the deal of NEO-PV-01, a cancer vaccine that yielded initial data last July in patients with melanoma, lung and bladder cancers. After initially indicating it would advance the therapy into Phase 2 testing, Neon opted against further development in that November overhaul.
Both companies are investigating the role played by antigens, proteins expressed on the surface of cells. Shared antigens can feature on both healthy and tumor cells, while so-called neoantigens are specific to an individual’s tumor.
Targeting those neoantigens, the thinking goes, could be a potent treatment approach, although much of the clinical research in the field remains early.
Per deal terms, BioNTech will issue Neon investors 0.063 American Depositary Shares of BioNTech, implying a value of $2.18 per Neon share when using the ADS’ closing price of $34.55 Wednesday. The companies expect the deal to close by the second quarter of 2020.
The Neon deal isn’t the first time BioNTech has made a deal with a distressed drugmaker, either. Last May, the German company acquired the antibody programs and infrastructure from San Diego-based MabVax Therapeutics.