Infinity Pharmaceuticals can breathe easy—the risk of its merger with MEI Pharma being derailed by a surprise outside bid appears to have passed.
Only yesterday, MEI revealed it was mulling an “unsolicited proposal” received last week to buy the biotech from a group led by investment companies Anson Advisors and Cable Car Capital. But after sleeping on it, the biotech’s board has decided it can do better.
Bearing in mind that MEI’s stock reached $7.20 apiece on May 23—the day the company received the proposal—the group’s starting offer of $8 per share didn’t seem particularly generous. It may explain why MEI’s board concluded today that the bid “significantly undervalues the company.”
The takeover offer is “not superior” to the proposed merger with Infinity and “does not provide a basis for discussions regarding an alternative transaction,” they added. As a result, the board will continue to recommend that the merger with Infinity, which will see MEI shareholders hold onto 58% of the newly combined company, proceed as planned.
It’s certainly good news for Infinity. The company revealed in March that the proposed merger could be the last chance to avoid bankruptcy as its lead clinical candidate eganelisib eats up remaining cash reserves.
The combined company’s lead asset is expected to remain eganelisib, an oral immuno-oncology macrophage reprogramming candidate that will be evaluated with Keytruda in patients with head and neck squamous cell carcinoma. The remainder of the pipeline will consist of two MEI drugs: voruciclib, a CDK9 inhibitor in a phase 1b trial for acute myeloid leukemia and B-cell malignancies; and ME-344, a tumor-selective mitochondrial inhibitor due to begin a phase 1 study in relapsed colorectal cancer.