Equillium cancels Metacrine buy, citing 'strong financial position' after Ono deal

Fledgling metabolic biotech Metacrine is back out in open corporate seas after the sinking of a planned merger with Equillium. 

Equillium said that after recently handing away the rights to its lead med, itolizumab, to Ono Pharmaceutical, the company is now in a better financial position than it had expected. It no longer needs to buy up Metacrine to bolster its cash runway, according to an announcement Friday afternoon. The decision ends a $26 million agreement for Equillium to absorb Metacrine, which was first announced in early September. 

The 180-degree change leaves Metacrine back in the unenviable position it found itself in before the planned merger, which was retooling both its team and its pipeline. Earlier this year, the company redirected its lead asset MET642 toward inflammatory bowel syndrome after the med failed a phase 2 trial in patients with nonalcoholic steatohepatitis in late 2021. The pivot forced the company to lay off half of its staff alongside the exit of its chief medical officer. 

Metacrine did not immediately respond to a request for comment when asked how it planned to proceed solo. According to its third-quarter earnings report, the company has $52.8 million on hand, enough to last through 2023.

Equillium, on the other hand, is optimistic about its future following the Ono deal, which extended its cash runway into at least 2025. 

“We therefore find ourselves in a strong financial position, and with our pipeline of wholly-owned multi-cytokine inhibitors in the clinic we are excited about the opportunity to unlock value in our programs during 2023 and beyond,” CEO Bruce Steel said in a release. 

By handing itolizumab’s commercial rights to Ono earlier this month, Equillium added $26 million in upfront cash plus $138.5 million in potential biobucks. The company is currently enrolling a phase 3 study in graft-versus-host disease in addition to a phase 1 trial exploring the drug as a treatment for lupus. Itolizumab’s use in the latter has received a fast-track tag from the FDA. Japan-based Ono will own the rights to both indications in addition to commercialization privileges in the U.S., Canada, Australia and New Zealand.