Leap Therapeutics Seeks Public Markets With Macrocure Merger

Xconomy Boston — 

Leap Therapeutics, a biotech with a couple of early stage monoclonal antibodies targeting cancer, is merging with an Israeli company trading on the Nasdaq in hopes of being able to take Leap shares to the public market.

Cambridge, MA-based Leap will combine with Israel-based Macrocure (NASDAQ: MCUR) in a deal known as a reverse merger—a tactic that some nascent and latent biotechs use to approach the public markets to skip the scrutiny and some risk of going through the initial public offering process, especially when markets are cool. Only 59 companies have filed for an initial public offering this year, down 55 percent from a year ago and the slowest pace since 2009, according to data from Renaissance Capital.

Macrocure will become a subsidiary of Leap, which plans to apply to be traded on the Nasdaq after the merger closes near the end this year, the company said in a statement. Once the deal closes, Leap investor HealthCare Ventures plans to pump an additional $10 million in the new business. That will leave Leap’s pre-merger owners with 68.2 percent of the combined company, while Macrocure’s owners will have the remaining 31.8 percent.

Leap plans to start a randomized study of its lead monoclonal antibody candidate, DKN-01, sometime in 2016 or 2017, according to the statement. Monoclonal antibodies are a type of molecule designed to bind to targets on the surface of cells. The company has been studying the drug’s effect when combined with a chemotherapy agent, paclitaxel, in early-stage esophageal cancer, as well as by itself in non-small cell lung cancer.

Leap also has an ongoing study of DKN-01’s effect on cholangiocarcinoma, or bile duct cancer, when combined with chemotherapies gemcitabine and cisplatin. The company has a second monoclonal antibody, TRX518, which it is testing along with chemotherapeutics and other therapies in preclinical trials.

Other companies have taken the reverse-merger route to reach the public market, including Lexington, MA-based Pulmatrix, San Diego-based Organovo, and Enumeral Biomedical, of Cambridge and New York.

Leap’s executives will remain in their current positions in the new company, while Macrocure’s former CEO and one other unnamed executive will join the combined company’s board of directors.

Macrocure has a wound care product called CureXcell, which uses human white blood cells to aid in healing wounds. The company’s website says it has two ongoing Phase 3 trials studying the product for diabetic foot and venous leg ulcers. Leap did not say whether it would continue to pursue the development of CureXcell.

Cambridge-based HealthCare Ventures participated in a $9.9 million financing for leap in 2011, according to a regulatory filing. Leap says that HealthCare and Indianapolis, IN-based Eli Lilly own all of Leap’s pre-merger voting shares.