Vincerx Pharma Enters into a Binding Term Sheet for a Strategic Merger with Oqory, Inc.

Rhea-AI Summary

Vincerx Pharma (VINC) has entered into a binding term sheet to merge with Oqory, a private clinical-stage company developing Antibody-drug Conjugates (ADCs) for oncology treatments. Post-merger, Oqory shareholders will own 95% of the combined entity, while Vincerx holders will retain 5%. The deal values Vincerx at $13.66 million and requires a minimum $20 million equity offering.

Oqory will provide $1.5 million interim financing in two tranches: $1 million funded through common stock and warrants, and $500,000 by January 31, 2025. Oqory's anti-TROP2 ADC has shown promising clinical results, including 83% overall response rate and 100% disease control rate in first-line triple-negative breast cancer patients, with favorable safety profiles.

Positive

• Merger brings Phase 3 TROP2 ADC with strong clinical data (83% response rate, 100% disease control rate)
• Immediate $1.5M interim financing secured
• Minimum $20M concurrent financing requirement ensures capital for operations
• Superior safety profile compared to other TROP2 ADCs in Phase 3

Negative

• Significant dilution for current VINC shareholders (reduced to 5% ownership)
• Major management restructuring with CEO, President/COO, and CFO stepping down
• Workforce reduction implemented
• Deal contingent on multiple conditions including financing, approvals, and Nasdaq listing maintenance

Insights

Biotech Investment Analyst

The merger represents a strategic pivot for Vincerx, bringing in a promising Phase 3 TROP2 ADC asset with compelling clinical data. The 83% overall response rate and 100% disease control rate in first-line TNBC are remarkably strong compared to existing TROP2 ADCs like Gilead's Trodelvy. The superior safety profile with no reported ILD or severe stomatitis could differentiate this asset in the competitive ADC landscape. However, the deal structure reveals Vincerx's weak negotiating position - existing shareholders will retain only 5% of the combined entity, with a minimum equity value of just $13.66 million. The required $20 million concurrent financing and interim $1.5 million bridge funding suggest significant near-term capital needs. The executive departures and workforce reduction indicate a company in transition, though retaining key personnel in consulting roles may help preserve institutional knowledge through the merger.

Oncology Research Analyst

The clinical data for Oqory's TROP2 ADC demonstrates exceptional potential in TNBC treatment. An 83% response rate in first-line TNBC (n=30) surpasses current standards of care, while the clean safety profile without ILD or severe stomatitis addresses key limitations of existing TROP2 ADCs. For context, Gilead's Trodelvy shows response rates of 45-55% in first-line TNBC with notable toxicity concerns. The lack of severe adverse events could enable longer treatment durations and better quality of life for patients. However, the relatively small patient population (n=30) warrants cautious interpretation until Phase 3 data confirms these results. The ongoing Phase 3 studies will be important in validating these promising early findings and determining the true competitive positioning of this asset.

Proposed merger would add a differentiated Phase 3 TROP2 Antibody-drug Conjugate (ADC) to the combined company’s pipeline

PALO ALTO, Calif., Dec. 27, 2024 (GLOBE NEWSWIRE) -- Vincerx Pharma, Inc. (Nasdaq: VINC), a biopharmaceutical company aspiring to address the unmet medical needs of patients with cancer through paradigm-shifting therapeutics, today announced that it has entered into a binding term sheet for a proposed merger with Oqory, Inc., a privately-held, clinical-stage company developing ADCs for the treatment of multiple oncology indications.

Upon completion of the proposed merger, Oqory, Inc. will merge with Vincerx Pharma, Inc. Post-closing, Oqory equity holders are expected to own approximately 95% of the combined entity, while Vincerx equity holders will hold about 5%. The transaction includes a minimum fully diluted equity value of $13.66 million for existing Vincerx stockholders at closing and, as a condition to the closing of the merger, completion of a concurrent offering of Vincerx equity securities of at least $20 million. Additionally, Oqory-designated investors will provide interim financing to Vincerx of $1.5 million in two tranches, approximately $1,000,000 of which was funded today through the issuance of common stock and pre-funded warrants along with accompanying common stock warrants and approximately $500,000 of which will be funded on or prior to January 31, 2025. The merger is subject to customary closing conditions, including due diligence, regulatory approvals, negotiation of a definitive merger agreement, stockholder approval from both parties, completion of the minimum $20 million financing, and the continued listing of Vincerx's common stock on Nasdaq.

Vincerx is also implementing additional streamlining and cost-control measures, including a workforce reduction, as it pursues due diligence and transaction-related work. As part of this workforce reduction, Dr. Ahmed Hamdy, Chairman and Chief Executive Officer (CEO), has stepped down as CEO but will remain as Chairman. Dr. Raquel Izumi has stepped down as President and Chief Operations Officer and taken over as Acting CEO in a consulting capacity. Alexander Seelenberger has stepped down as Chief Financial Officer, and Kevin Hass, the Company’s Vice President and Controller, has taken over as Acting Chief Financial Officer. Mr. Seelenberger has agreed to provide ongoing assistance in a consulting capacity to assist the Company as it pursues its strategic efforts.

“This strategic transaction highlights Vincerx’s commitment to develop ADCs with improved safety profiles that allow patients to thrive on—rather than endure—their cancer therapies,” said Raquel Izumi, Ph.D., Acting Chief Executive Officer. “Oqory’s anti-TROP2 ADC has shown favorable efficacy and safety in the clinic. Among approximately 150 treated patients, results include an 83% overall response rate and 100% disease control rate in first-line triple-negative breast cancer (TNBC; n=30). Unlike other TROP2 ADCs in Phase 3, no cases of interstitial lung disease or Grade 3 and above stomatitis have been reported. Oqory’s Phase 3 studies of OQY-3258 are ongoing to confirm these promising findings.”

About OQY-3258 (also known as ESG401)
OQY-3258 is Oqory’s anti-TROP2 ADC with an optimized enzyme-dependent linker technology and an SN-38 payload with established efficacy and manageable side effect profile. OQY-3258 has completed Phase 1/2 development in over 150 patients with solid tumors, including metastatic HR+/HER2- and triple-negative breast cancer. OQY-3258 has shown efficacy in these patients, including reduction of brain metastasis and responses in heavily pretreated patients. To date, OQY-3258 has exhibited a differentiated safety profile vs. Trodelvy and other TROP2 ADCs in Phase 3 development. Notably, no interstitial lung disease or ocular surface events have been observed. Gastrointestinal effects have been mild and mainly Grade 1/2. Neutropenia and leukopenia have been the major AEs, which were manageable and did not result in discontinuation of study drug. OQY-3258 is being evaluated in a Phase 3 study as first-line treatment in patients with unresectable recurrent or metastatic triple-negative breast cancer (NCT06732323) and in a Phase 3 study in patients with unresectable locally advanced or metastatic HR+/HER2- breast cancer (NCT06383767).

About Oqory, Inc.
Oqory, Inc. is an innovator in the field of ADCs with expertise in advancing targeted cancer therapies. The Company’s pipeline includes multiple ADC programs, with two currently in clinical development and several next-generation ADCs in preclinical stages. These programs are designed to address critical unmet needs in indications such as breast cancer, non-small cell lung cancer, small cell lung cancer, multiple myeloma, and other metastatic solid tumors. Powered by a proprietary ADC platform, Oqory is delivering therapies that have demonstrated promising efficacy and safety paving the way for improved patient outcomes.

About Vincerx Pharma, Inc.
Vincerx Pharma, Inc. is a clinical-stage biopharmaceutical company committed to developing differentiated and novel therapies to address the unmet medical needs of patients with cancer. Vincerx’s pipeline consists of a next-generation ADC, VIP943, currently in Phase 1; a small molecule drug conjugate, VIP236, which has completed its Phase 1 study; a CDK9 inhibitor, enitociclib, which has completed a Phase 1 monotherapy study; a preclinical ADC, VIP924; and VersAptx™, a versatile, next-generation bioconjugation platform.

Vincerx is based in Palo Alto, California, and has a research subsidiary in Monheim, Germany.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, expectations and events, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “will,” “should,” “would,” “could,” “suggest,” “seek,” “intend,” “plan,” “goal,” “potential,” “on-target,” “on track,” “project,” “estimate,” “anticipate,” or other comparable terms. All statements other than statements of historical facts included in this press release are forward-looking statements. Forward-looking statements include, but are not limited to, the entry into a definitive merger agreement; the anticipated terms and closing of the merger, the $20 million equity investment, and the amount and timing of the interim financing; the expected ownership structure and value to Vincerx stockholders upon closing of the merger; the anticipated benefits of a merger transaction; and the clinical results of Oqory’s product candidates. Forward-looking statements are neither historical facts nor assurances of future performance or events. Instead, they are based only on current beliefs, expectations, and assumptions regarding future business developments, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside Vincerx’s control.

Actual results, conditions, and events may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results, conditions, and events to differ materially from those indicated in the forward-looking statements include, but are not limited to, Vincerx’s capital requirements, availability and sufficiency of capital, and cash runway; the ability of the parties to enter into a definitive merger agreement and the final terms thereof; the parties’ ability to satisfy the conditions precedent to the merger, including stockholder approval; the closing of the merger; the risk that any definitive agreement is terminated after it is entered into but before consummation of any proposed merger;; Vincerx’s reliance on receipt of interim funding; market acceptance of the combined company; risks associated with clinical development of the Vincerx and Oqory product candidates; general economic, financial, legal, political, and business conditions; and the risks and uncertainties set forth in Vincerx’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and subsequent reports filed with the Securities and Exchange Commission by Vincerx. Forward-looking statements speak only as of the date hereof, and Vincerx disclaims any obligation to update any forward-looking statements.

Vincerx and the Vincerx logo are trademarks of Vincerx. This press release also contains trademarks and trade names that are the property of their respective owners.

Contacts:

Gabriela Jairala
Vincerx Pharma, Inc.
gabriela.jairala@vincerx.com

Totyana Simien
Inizio Evoke Comms
totyana.simien@inizioevoke.com

FAQ

What is the ownership structure after Vincerx Pharma's merger with Oqory?

After the merger, Oqory equity holders will own approximately 95% of the combined entity, while Vincerx (VINC) shareholders will retain about 5%.

What are the clinical results of Oqory's TROP2 ADC in triple-negative breast cancer?

Oqory's TROP2 ADC showed an 83% overall response rate and 100% disease control rate in first-line triple-negative breast cancer (n=30), with no reported cases of interstitial lung disease or Grade 3+ stomatitis.

How much interim financing will Oqory provide to VINC?

Oqory will provide $1.5 million in interim financing, with $1 million funded immediately and $500,000 to be funded by January 31, 2025.

What are the key conditions for the VINC-Oqory merger completion?

The merger requires due diligence, regulatory approvals, definitive merger agreement, stockholder approval from both parties, minimum $20 million financing, and continued Nasdaq listing.

What management changes occurred at VINC following the merger announcement?

Dr. Ahmed Hamdy stepped down as CEO but remains Chairman, Dr. Raquel Izumi became Acting CEO, and Kevin Hass became Acting CFO, replacing Alexander Seelenberger.