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Global Drug Co. Offers US$1.35B To Boost Hematology Assets
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Imago BioSciences Inc. shares traded 104.5% higher yesterday to a new 52-week high after the company reported it entered into a definitive agreement to be acquired by Merck & Co. in an all-cash transaction for US$36.00 per share.

Clinical stage biopharmaceutical company Imago BioSciences Inc. (IMGO:NASDAQ), which concentrates its effort on finding and development new treatments for malignant, life-threatening diseases of the bone marrow including myeloproliferative neoplasms (MPNs), yesterday announced that it entered into a definitive agreement to be acquired by a subsidiary of Merck & Co. Inc. (MRK:NYSE) for US$36.00 per share in cash in a transaction valued at approximately US$1.35 billion. The acquisition is expected to expand Merck's growing hematology portfolio.

Imago BioSciences' development work is focused on developing small molecule product candidates that are designed to specifically target lysine-specific demethylase 1(LSD1), an enzyme used in producing blood cells in the bone marrow. The company stated that "LSD1 (also known as KDM1A) is a member of a group of epigenetic proteins that regulate gene expression through chemical modifications of proteins, RNA and DNA."

Imago's leading drug pipeline candidate is an oral lysine-specific demethylase 1 (LSD1) inhibitor called bomedemstat (IMG-7289).

The report indicated that bomedemstat is presently being evaluated in several Phase 2 clinical studies as a potential treatment for multiple indications, including essential thrombocythemia (ET), myelofibrosis (MF), polycythemia vera (PV), and also in a combination drug study with atezolizumab for small cell lung cancer.

Imago BioSciences' Founder and CEO Hugh Y. Rienhoff Jr., M.D., commented, "This agreement leverages Merck's industry-leading clinical development expertise to maximize the therapeutic potential of bomedemstat while providing important value for shareholders."

Merck's President and CEO Robert M. Davis stated, "This acquisition of Imago augments our pipeline and strengthens our presence in the growing field of hematology."

Dr. Dean Y. Li, President at Merck Research Laboratories, added, "Evidence indicates that LSD1 plays an important role in the maturation of blood cells in the bone marrow . . . We look forward to working with the Imago team to further investigate the potential of bomedemstat for patients with myeloproliferative neoplasms."

The report advised that the acquisition will be initiated by a Merck subsidiary via a tender offer to purchase 100% of Imago BioSciences' common shares. The transaction is expected to close in Q1/23 but remains subject to approval by a majority of Imago's shareholders (shares tendered), ordinary closing conditions, and regulatory requirements, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The report explained that MPNs are bone marrow diseases characterized by the overproduction of red blood cells, platelets, and certain types of white blood cells. The buildup of these extra cells over time can often lead to anemia, bleeding issues, fatigue, infection, thrombosis, and other symptoms.

Imago is a clinical-stage biopharma firm based in Redwood City, Calif. The company is focused on the discovery and development of targeted small-molecule product candidates for use in treating cancer and bone marrow diseases. The firm is currently evaluating its bomedemstat (IMG-7289) in multiple Phase 2 trials as a possible treatment of certain myeloproliferative neoplasms (MPNs).

The company advised that "bomedemstat has received U.S. FDA Orphan Drug and Fast Track Designation for the treatment of ET and MF, European Medicines Agency (EMA) Orphan Designation for the treatment of ET and MF, and Priority Medicines (PRIME) Designation by the EMA for the treatment of MF."

Merck & Co. is one of the world's largest global healthcare companies and has a market cap of around US$264 billion. The company develops, manufactures, and markets animal health products, in human biologic therapies, prescription medicines, and vaccines, and provides healthcare services worldwide.

Imago BioSciences started off the day yesterday with a market cap of around US$588.5 million, with approximately 33.8 million shares outstanding and a short interest of about 10.5%. IMGO shares opened 105% higher yesterday at US$35.67 (+US$18.27, +105.00%) over Friday's US$17.40 closing price and reached a new 52-week high price yesterday morning of US$35.75. The stock traded yesterday between US$35.44 and US$35.75 per share and closed for trading at US$35.59 (+US$18.19, +104.54%).

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