Leap jumps ahead in cancer game with Flame merger

Leap jumps ahead in cancer game with Flame merger

Published: Jan 17, 2023

By Tristan Manalac

BioSpace

Massachusetts-based biotech Leap Therapeutics announced Tuesday that it had entered into a merger deal with the privately-held Flame Biosciences, Inc.

The buyout will grant Leap access to Flame’s portfolio, which includes the clinical-stage anti-Claudin18.2 monoclonal antibody FL-301, which is under investigation as a potential treatment for gastric, gastroesophageal junction and pancreatic cancers.

Leap will also win FL-302, a preclinical-stage biospecific antibody against Claudin18.2 and CD137, and FL-501, a preclinical anti-GDF15 monoclonal antibody.

Flame’s outstanding net cash, valued at $50 million as of December 31st, 2022, will also be transferred to Leap. This transaction will bring the combined company’s total balance to about $115 million, enough to support operations and the development of the expanded pipeline through mid-2025.

In an investor call Tuesday, Douglas Onsi, president and CEO of Leap, said that this runway would be “well beyond our DKN-01 clinical milestones” without any additional payments from Leap’s business partners.

After closing the deal, the combined entity will trade on the Nasdaq stock exchange under the ticker symbol LPTX. Leap’s existing leadership will helm the combined company, which will continue to advance DKN-01, Leap’s anti-DKK1 monoclonal antibody, as its lead asset.

DKN-01 is in Phase II development for gastric, endometrial and colorectal cancers.

Onsi said the Flame acquisition would help Leap expand its gastrointestinal cancer focus with a second clinical-stage antibody program, along with two preclinical programs that will leverage Leap’s biomarker expertise.

“We believe that DKK-1 and Claudin18.2 will become important patient selection biomarkers in gastric cancer, alongside HER2 and PD-L1 expression,” Onsi said. “With the combined company resources and the existing team, we will be able to aggressively advance both DKN-01 and the newly acquired programs.”

Under the terms of the agreement, Leap will issue 19,794,373 of its common shares to Flame stockholders. The deal will also involve 136,833 shares of a new Series X non-voting convertible preferred stock, which Leap will also issue to Flame stockholders. Each of these Series X shares is convertible to 1,000 shares of common stock following the approval of Leap’s stockholders.

If Leap’s stockholders approve the measure, Flame will own 58% of Leap’s outstanding shares, including pre-funded warrants. Flame shareholders will be entitled to 80% of after-tax net proceeds from potential post-merger deals.

Source: BioSpace