BioNTech acquires Neon at cheapest for $67m

According to the merger agreement, BioNTech AG will acquire Neon Therapeutics Inc in an all-stock transaction that will close in Q2/2020 and is valued at approximately US$67m. US eastcoast company Neon will operate as a subsidiary of BioNTech, which develops personalised mRNA-based cancer treatments such as cancer immunotherapy adjuvants. As part of the merger, BioNTech will acquire Neon’s RECON bioinformatics neoantigen selection platform, and the company’s NEO-STIM platform, a tool for ex-vivo expansion and -activation of neoantigen-targeting T cells.

“This acquisition fits with our strategy to expand our capabilities and build our presence in the U.S. and further strengthens our immunotherapy pipeline,” said Ugur Sahin, MD, Co-founder and CEO of BioNTech. “I am particularly excited about the adoptive T cell and neoantigen TCR therapies being developed by Neon, which are complementary to our pipeline and our focus on solid tumors.”

Neon, a leader in in the development of neoantigen therapies, lost more than 30% of its market capitalisation since its US$451m IPO in 2018. Phase Ib data of the company's mRNA-based vaccine targeting the induvidual tumour mutanome in combination with a checkpoint inhibitor did not show a significant boost in tumour immunogenicity through Neon’s adjuvant. Subsequently, the company has shifted its focus to NEO-PTC-01, a neoantigen-targeted T cell cancer therapy. Neon is also advancing a precision T cell therapy programme targeting shared neoantigens in genetically defined patient populations. The lead programme from this approach, NEO-STC-01, is a T cell therapy candidate targeting shared RAS neoantigens. What's of interest to BioNTech: Neon has assembled libraries of high-quality TCRs against various shared neoantigens across common HLAs.

Under the terms of the agreement, Neon will, merge with Endor Lights, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of BioNTech and become a wholly-owned subsidiary of BioNTech. At closing, BioNTech will issue, and Neon shareholders will receive 0.063 American Depositary Shares (ADS) (each ADS representing one ordinary share of BioNTech) in exchange for each of their shares of Neon. The exchange ratio implies a deal value of $67 million, or $2.18 per share of Neon, based on the closing price of BioNTech’s ADSs of $34.55 on Wednesday, January 15^th, 2020.