Leap reverse merges, secures $30M for I/O antibodies

Oncology

Immuno-oncology antibody company Leap Therapeutics has reverse merged with Israeli public wound care player Macrocure ($MCUR). This is at least the third recent biotech reverse merger, coming amid the typical IPO doldrums of August.

Reverse mergers may be losing their stigma, especially considering recent high-profile success stories that started out that way and are now worth billions, such as Medivation ($MDVN) and Puma Biotechnology ($PUMA). Leap Therapeutics was formerly known as Dekkun and reported its first and only prior financing of almost $10 million in 2011.

The combined company will have $30 million, including an additional $10 million from Leap investors including HealthCare Ventures. That firm holds three seats on Leap’s five-person board, including the company’s CEO, Christopher Mirabelli, who is a HealthCare Ventures managing director.

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"The combination with Macrocure positions our organization as a leading immuno-oncology company with sufficient capital to advance our pipeline of first-in-class monoclonal antibodies through significant value-creating events," said Mirabelli in a statement. 

The resulting company will focus on the two early stage clinical cancer antibodies being developed at Leap: DKN-01, a humanized monoclonal antibody targeting the Dickkopf-1 (DKK1) protein, and TRX518, a humanized GITR agonist monoclonal antibody designed to improve the immune system's antitumor response. The company will be focused on developing these two monoclonal antibody candidates going forward.

Continued Mirabelli, "We anticipate achieving substantial clinical milestones over the course of 2016 and 2017. We plan to present data and initiate randomized studies for DKN-01, our lead development candidate, which has demonstrated clinical activity in esophageal cancer and cholangiocarcinoma when combined with chemotherapy; and we expect to report data from a repeat-dose study of TRX518, a novel GITR agonist monoclonal antibody which is believed to enhance an immune anti-tumor response."

Macrocure investors will hold about 31.8% of the resulting company, while Leap shareholders get about 68.2% of it. Macrocure will officially become a subsidiary of Leap; the executive team at Leap will retain all their positions in the Cambridge, MA-based company. The boards of both companies have agreed to the deal, which is expected to close around year end.

Wall Street drove up Macrocure shares on news of the deal by about 66%. Still, that only pushed the penny stock to a valuation of around $35 million, scarcely more than its cash that’s slated at deal close.

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