Arix Bioscience plc ("Arix", LSE: ARIX ) a global venture capital company focused on investing in and building breakthrough biotech companies, notes that its portfolio company VelosBio Inc. ("VelosBio"), has announced it has entered into a definitive agreement with Merck (NYSE: MRK), known as MSD outside of the United States (U.S.) and Canada whereby Merck, through a subsidiary, will acquire all outstanding shares of VelosBio for $2.75 billion in cash, subject to certain customary adjustments.
VelosBio is a privately held, clinical-stage U.S. biopharmaceutical company, committed to developing first in class cancer therapies targeting tyrosine kinase-like orphan receptor 1 (ROR1), a novel oncology target.
VelosBio's lead investigational candidate is VLS-101, an antibody-drug conjugate (ADC) targeting ROR1 that is currently being evaluated in a Phase 1 and a Phase 2 clinical trial for the treatment of patients with hematologic malignancies and solid tumours, respectively.
In addition, VelosBio is developing a preclinical pipeline of next-generation ADCs and bispecific antibodies targeting ROR1 with the potential to complement VLS-101 by offering alternative methods of tumour cell killing.
12x Return for ARIX
The sale of VelosBio is expected to deliver net proceeds to Arix of approximately $185m (£142m), representing a 12x return on Arix's £12m invested capital.
This equates to a £121 million or 89p per share increase in the gross value of Arix's holding in VelosBio of £21 million.
Shares in Arix increased 65% to 172p following the announcement.