Targovax to merge with Oncos then IPO in push for immuno-oncology mainstream

Targovax is to merge with fellow Nordic biotech Oncos Therapeutics to create an immuno-oncology player with the critical mass to get noticed in the congested and fiercely fought field. The merged company will fuel the first-phase of its ambitions through a private placement, with an IPO in Oslo to follow within the next 12 months.

Targovax CEO Gunnar Gårdemyr

Oslo, Norway-based Targovax will give Oncos' shareholders around NOK 236 million ($30 million) in stock, a sum that equates to 50% of the combined company. Targovax, which registered on Norway's NOTC-list exchange last year, is also planning a private placement of up to $19 million to finance the merged business after which it will push ahead with plans to IPO on the Oslo Børs. Gunnar Gårdemyr, CEO of Targovax, expects the IPO to take place in the first half of 2016, but isn't ruling out fast-tracking the offering to raise cash before the end of the year.

The money, whenever it is raised, will go toward advancing the combined company's portfolio of clinical-phase immuno-oncology assets through the clinic. Helsinki, Finland-based Oncos is bringing the Phase II-ready engineered human serotype 5 adenovirus ONCOS-102 to the combination, while Targovax's most advanced contribution is the RAS mutation-targeting vaccine TG01. Interim Phase I/II data on TG01 in patients with pancreatic cancer are due in the first half of 2016, by when ONCOS-102 will be gearing up for a Phase II mesothelioma trial and Phase I study in patients with prostate cancer.

Targovax and Oncos view the assets and the teams developing them as complementary, resulting in Targovax having a broader, more diversified portfolio than either of the individual firms. Importantly, this will lead to Targovax pumping out a steady flow of news over the next few years, something Gårdemyr sees as key if it is to attract attention despite being based in a relative backwater of the biotech industry. For all their merits, Oslo and Helsinki aren't Boston and San Francisco. "We are not at the center of the world so I think we need this critical mass to get noticed," Gårdemyr told FierceBiotech.

Some organizations have already started to take notice, according to Gårdemyr, leading to talks with big-name cancer institutions and large pharma companies in the U.S. about combination therapies. It is likely to be months before Gårdemyr has a concrete deal to discuss publicly, assuming it comes to fruition, but the talks nonetheless highlight one avenue he is keen for Targovax to pursue. With evidence of the potential and limitations of checkpoint inhibitors mounting, Targovax is pitching TG01 and particularly ONCOS-102 as ways to boost the proportion of patients who respond to such drugs. 

- read the release
- check out the accompanying presentation (PDF)

Editor's note: This story was amended to remove references to "Polaris." The combined company will keep the name Targovax. Polaris is the name of the merger project.

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