DUBLIN – Targovax AS and Oncos Therapeutics Oy are pooling their cancer immunotherapy resources in a 50-50 merger, which values each company at NOK235.7 million (US$30 million). In conjunction with the transaction, Targovax is seeking NOK125 million to NOK150 million through a private placement, and the enlarged entity has set its sights on an IPO a year from now.

Lyskaer, Norway-based Targovax, which was formed in 2010, majors in the development of peptide-based therapeutic vaccines directed at RAS-mutated cancers. Oncos, which was formed in 2009, has developed a recombinant oncolytic adenovirus, Oncos-102, which has completed a phase I trial. (See BioWorld Today, May 20, 2013.)

The move is intended to raise the profile of their joint efforts. "The thing is, we are two Scandinavian companies, very similar in size, both at the clinical development stage," Targovax CEO Gunnar Gårdemyr told BioWorld Today. "We need to be more visible and to have a broader and more diverse portfolio to make it in this very competitive environment of immuno-oncology."

The transaction will take the form of Targovax issuing Oncos shareholders with about 9.4 million shares priced at NOK25 each. The move was prompted by Targovax investors, who sought to combine several assets into a single entity. Between them, the two companies have raised about €30 million (US$33.7 million) in both equity and soft money, and they have about 25 employees in total. The enlarged company will operate from two sites, in Norway and Finland, given the skillsets available in each location. Moreover, the Oncos viral production platform is located in Helsinki.

According to phase I/IIa data reported at the recent American Society of Clinical Oncology meeting in Chicago, Targovax's lead vaccine candidate, TG-01, elicited immune responses in 14 of 16 resected pancreatic cancer patients, as measured by positive delayed hypersensitivity tests. Seven of eight patients measured had positive T-cell responses. Two had anaphylactic reactions, however. "This is probably something to do with the peptide load, our experts tell us," Gårdemyr said. The company is enrolling a 13-patient cohort who will receive a shorter regimen.

The technology is based on the administration of longer peptides than is normally the case for peptide-based vaccines, in order to favor MHC Class II-based antigen presentation, leading to a CD4+ T-helper response, instead of an MHC Class I-based antigen presentation, leading to a CD8+ effector T-cell response. The peptides are administered in combination with the immuno-stimulatory cytokine granulocyte macrophage colony stimulating factor (GM-CSF). The enlarged entity plans to conduct a trial of a second version of the vaccine, TG02, in patients with colorectal cancer next year.

But most of the company's development plans will focus on the Oncos adenoviral platform, which, Gårdemyr said, offers more flexibility than Targovax's approach, which involves up to eight individual peptides encoding different Ras mutations.

During the first half of next year, the company plans to start clinical trials of the adenovirus in mesothelioma, prostate cancer and ovarian cancer. It will also open a trial in melanoma in the second half of the year. It has several modifications to ensure it selectively enters and replicates within tumor cells. Although based on Adenovirus serotype 5, it carries a knob protein from serotype 3, to ensure it enters tumor cells selectively. It also carries a D24 deletion, which prevents replication in and lysis of wild type cells. Plus, it is modified to express GM-CSF to stimulate an immune response to the antigenic debris that results from tumor cell lysis.

Gårdemyr will lead the enlarged company, while Øystein Soug and Jon Amund Eriksen, chief financial officer and chief operating officer of Targovax, respectively, will continue in those roles. Magnus Jäderberg, a former chief medical officer at Bristol-Myers Squibb. Co.'s European arm, joins from Oncos.

Targovax is listed on the over-the-counter NOTC list in Oslo. The tie-in with Oncos requires shareholder approval – so far it has received advance commitments to the merger and the capital increase from shareholders holding about 68.5 percent of its stock. The subscription period for the capital increase opened Thursday and runs until June 19.