Merck Purchases Pappas Capital Portfolio Company VelosBio for $2.75 Billion
Merck’s pocketbook just got a little lighter and Durham venture capital firm Pappas Capital couldn’t be happier.
The global pharmaceutical company announced that it has entered a definitive agreement to buy clinical stage-biotech startup VelosBio for $2.75 billion in cash. Pappas Capital, which has made major investments in VelosBio over the past several years, said the exit of the portfolio company is “among the most successful in its 25-plus-year history.”
The acquisition will give Merck control of an antibody-drug conjugate (ADC) currently under evaluation in Phase 1 and Phase 2 clinical trials. The investigational drug, VLS-101, is a first-in-class therapy for difficult-to-treat cancers. The drug targets receptor tyrosine kinase-like orphan receptor 1 (ROR1) that is thought to be overexpressed in multiple cancers. Attacking ROR1-positive malignancies with ADCs has the potential to kill tumors selectively, without harming normal cells.
managing partner, Papps Capital
VelosBio: Pappas portfolio company
Pappas Capital first invested in VelosBio in 2018 as part of that company’s $58 million Series A financing. It participated in a second $137 million Series B financing in July. Pappas Managing Partner Kyle Rasbach, Ph.D., PharmD., has served as an observer to the VelosBio Board of Directors.
“At Pappas, our focus has long been on identifying and executing on investment opportunities in innovative life science companies, and partnering with exceptional teams to bring these technologies to market,” Rasbach said. “VelosBio serves as an ideal example of our strategy at work and we are thrilled to watch the company embark on its next phase of growth as part of Merck.”
VelosBio is the second exit of a Pappas portfolio company this year. Curzion Pharmaceuticals, a start-up co-founded by Pappas Capital, was acquired by Horizon Therapeutics in April.
About Pappas Capital
Pappas Capital was founded in 1994 by the firm’s managing director, Art Pappas. It invests in innovative life sciences companies focused on biotechnology, biopharmaceuticals, drug delivery, medical devices and related ventures.
The firm concentrates on start-ups in the United States and Canada. It has raised upwards of $540 million and guided the launch or development of more than 85 companies since it opened its doors. Pappas Capital also works with academic institutions to accelerate the development of their scientific discoveries through its Translational Medicine Research Initiative.
Art Pappas serves on the North Carolina Biotechnology Center’s Board of Directors and is past chairman of its executive committee. For more than three decades, he has contributed to the growth of the state’s global leadership in the life sciences.