Pity poor Infinity Pharmaceuticals. The cash-strapped company had been relying on a long-planned merger with MEI Pharma to keep it afloat, but now a new potential buyer has thrown this plan into disarray.
MEI received an “unsolicited proposal” last week from a group led by investment companies Anson Advisors and Cable Car Capital, the biotech revealed in a release this morning. According to a Securities and Exchange Commission filing, the group already owned 8% of MEI’s shares as of Dec. 31.
Unlike the planned merger with Infinity, which would see MEI’s shareholders retain 58% of the company, this new bid is a straightforward sale, with the group paying $8 in cash for each outstanding share of MEI.
MEI’s shareholders will also receive a contingent value right to share 80% of the net proceeds from “any license or disposition” of the company’s clinical assets.
Bearing in mind that MEI’s stock reached $7.20 apiece on May 23—the day the company received the offer—it doesn’t seem like the prospective buyers are being unnecessarily generous with their $8 bid. Still, MEI’s board will “review the proposal … and respond in due course,” the biotech said in the release.
The news echoes a similar situation that Jounce Therapeutics found itself in earlier this year, when Concentra Biosciences upended Redx Pharma’s long-standing plan to acquire the biotech by making an offer that Jounce couldn’t resist.
If MEI goes for the new offer, it will be bad news for Infinity. The company revealed in March that the proposed combination with MEI could be the last chance to avoid bankruptcy as its lead clinical candidate eganelisib eats up remaining cash reserves.
But for now, MEI says the recommendation of its board to proceed with the Infinity deal “remains unchanged.”
If the merger still goes ahead, the combined company’s lead asset will remain eganelisib, an oral immuno-oncology macrophage reprogramming candidate that will be evaluated with Keytruda in patients with head and neck squamous cell carcinoma. The remainder of the pipeline will consist of two MEI drugs: voruciclib, a CDK9 inhibitor in a phase 1b trial for acute myeloid leukemia and B-cell malignancies; and ME-344, a tumor-selective mitochondrial inhibitor due to begin a phase 1 study in relapsed colorectal cancer.
The combined company is expected to have $100 million in the bank, which should fund trials for all three candidates through mid-2025.