Under the deal, Merck’s subsidiary will purchase all outstanding shares of Peloton in exchange for an upfront payment of $1.05bn (£825m) in cash.
The shareholders of Peloton will also have an option to secure a further $1.15bn (£904m) contingent payments based on the achievement of future regulatory and sales milestones for certain candidates.
Merck Research Laboratories president Dr. Roger Perlmutter said: “Peloton scientists have applied their unique expertise in HIF-2α biology to develop PT2977, which has already shown intriguing activity in the treatment of renal cell carcinoma.
Peloton is involved in the development of novel small molecule therapeutic candidates targeting hypoxia-inducible factor-2α (HIF-2α) to treat patients with cancer and other non-oncology diseases.
The company’s major candidate is PT2977, which is a novel oral HIF-2α inhibitor in late-stage development for renal cell carcinoma (RCC).
PT2977 is a potent, selective and investigational oral HIF-2α inhibitor currently being assessed in multiple clinical studies.
It is specifically being assessed in phase 2 clinical trial in von Hippel-Lindau (VHL) disease-associated RCC, phase 2 clinical trial in combination with cabozantinib in metastatic RCC, phase 1/2 dose-escalation and dose-expansion clinical trial in patients with metastatic RCC and an expansion arm of its phase 1/2 clinical trial in glioblastoma multiforme (GBM).
In cancer, HIF-2α is abnormally activated in these diseases due to the inactivity of the VHL tumor suppressor.
Subject to certain conditions including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, the deal is expected to be complete in the third quarter of this year.
Peloton CEO John Josey said: “Merck is recognized as a leader in cancer research and shares our commitment to accelerating the development of candidates targeting HIF-2α to help patients with advanced cancers and other diseases.
“We are proud to have advanced PT2977 to this stage of development and believe that Merck is well suited to build upon the progress our company has made.”