Infinity Pharmaceuticals' merger saga has rumbled on almost as long as its namesake, but finally the biotech has closure—just not the way it wanted.
The planned acquisition of MEI Pharma by Infinity has been in the works since February. Despite surviving the intervention of a surprise bidder at the last minute, MEI’s shareholders have now voted on the original proposal from Infinity—and sunk the deal for good.
At a special meeting of stockholders, 51% of votes cast were opposed to the transaction, leading MEI to notify Infinity that the merger agreement has been terminated.
Had the deal gone ahead, the combined company was projected to have a cash balance of around $100 million—enough to fund operations into mid-2025. That should have been enough to tick off some major readouts, including for immuno-oncology macrophage reprogramming candidate eganelisib, which is due to produce initial safety and survival data from a phase 2 trial of a combo with Keytruda in the second half of 2024.
There’s also CDK9 inhibitor voruciclib, for which initial results are expected from a phase 1b trial of a combo treatment with Venclexta in patients with hematologic malignancies toward the end of this year. Finally, there’s ME-344, a tumor-selective mitochondrial inhibitor targeting the OXPHOS pathway, that is being evaluated in combination with Avastin in a phase 1b trial of patients with relapsed colorectal cancer that is also expected to read out toward the end of the year.
Under the terms of the merger agreement, Cambridge, Massachusetts-based Infinity would have become a wholly owned subsidiary of MEI. MEI's shareholders would have owned approximately 58% of the combined company, while the remainder would have been owned by Infinity's shareholders. The headquarters of the combined company would have been in MEI's hometown of San Diego, and its shares would have been traded on the Nasdaq.
But when it came to the crunch vote, MEI’s shareholders clearly weren’t convinced.
“While we believe the benefits of the Infinity transaction were compelling for MEI stockholders, we appreciate and value the perspectives of our stockholders,” MEI CEO David Urso said in a Sunday afternoon release. “Our board and management team remain highly focused on the potential for capturing the stockholder value inherent in the company’s current development pipeline, which includes voruciclib and ME-344.”
Urso added, “With clinical data expected from both of our clinical-stage pipeline programs around year-end and capital to support our near-term development plans, we are focused on the potential opportunities for creating stockholder value,” Urso added.
It’s tough news for Infinity, which 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.
The merger had already survived one potential derailment when MEI received an “unsolicited proposal” from an investment group in May. MEI’s board ultimately decided that the surprise offer “significantly undervalue[d]” the company and instead advised shareholders to press ahead with the Infinity deal.
That investment group doesn’t appear to have taken the rejection of their own offer well, however. MEI reported last week that the group is now trying to wrestle control of the biotech from MEI’s own board.