The share price of biotechnology company Viralytics Ltd. (ASX: VLA) has soared 176% to $1.70 in morning trade. This is following last night's announcement that major U.S. pharmaceutical company Merck & Company has agreed to buy the company for $1.75 cash per share. The acquisition values Viralytics at approximately $502 million ($US394 million).
Viralytics focuses on oncolytic immunotherapy treatments for a wide range of cancers. The company will now become a wholly-owned subsidiary of Merck, who will gain full rights to CAVATAK, Viralytics' investigational oncolytic immunotherapy. CAVATAK uses a proprietary formulation of an oncolytic virus that has been shown to preferentially infect and kill cancer cells. Viral immunotherapy is a growing field in treating cancer where a number of companies are working on using the power of specific viruses to fight tumours.
Viralytics' board of directors has unanimously recommended that shareholders vote in favour of the takeover subject to a superior proposal being offered and an independent expert concluding that the takeover is in the best interest of shareholders. The company's largest shareholder, Lepu Medical Group, has indicated that it intends to vote in favour of the Scheme. Subject to a shareholder vote and customary regulatory approvals, it is anticipated that the transaction would be implemented by the second quarter of 2018.
