Prima BioMed to buy Immutep for up to $32m

Prima BioMed (ASX:PRR) has arranged to acquire immuno-oncology company Immutep SA for up to US$28 million ($31.9 million).

Under the terms of the proposed deal, Prima will pay up to US$18 million in cash - partly contingent on the meeting of certain milestones - and the balance through the issue of shares and warrants.

Immutep has been developing cancer immunotherapies based on its patented Lymphocyte Activation Gene 3 (LAG-3) technology. Lead product IMP321 has been tested in clinical trials in cancers including metastatic breast cancer (MBC).

“This is the most significant announcement in Prima’s history,” Prima Chair Lucy Turnbull said. “It is the result of a long and diligent search process led by new chief executive Marc Voight as part of our business development program.”

Immutep’s development programs include a phase II trial of IMP321 with first-line chemotherapy for MBC in conjunction with Chinese sublicensee Eddingpharm, and a phase I trial of IMP731 in autoimmune diseases in partnership with GlaxoSmithKline. The latter promises potential milestone payments of up to $100 million.

The company is also involved in an immune checkpoint blocker preclinical program for IMP701 in partnership with Novartis’s CoStim, owns an R&D laboratory outside of Paris and has a library of 11 patent families.

Prima has entered into an investment agreement with Bergen Global Opportunity Fund to help pay for the proposed acquisition and provide working capital.

The agreement will see Bergen make an initial upfront investment of US$2.5 million by way of a 36-month, interest-free convertible security. Bergen will also invest up to US$700,000 per month into Prima equity over the next 24 months.

If both parties agree, each monthly payment may be increased to up to US$1.5 million.

Prima CEO Marc Voight said this arrangement “avoids dilution to our shareholders at today’s subdued level while allowing us to maintain a substantial and relatively constant cash balance”.

Prima BioMed (ASX:PRR) shares were trading 13.16% higher at $0.043 as of around 12.30 pm on Thursday.