Privately held San Diego cancer vaccine maker MabVax Inc. has merged with Palo Alto-based Telik Inc. – a once high-flying drugmaker whose reputation and stock value tumbled after drug failures and an ethics controversy.
The new company, formed through a reverse merger in an all-stock transaction, will be renamed MabVax Therapeutics Holdings Inc. The company will maintain Telik’s listing on the Nasdaq, trading under ticker symbol “TELK,” but will focus on MabVax’s immunotherapy-based products to diagnose and treat sarcoma and ovarian cancer. It is enrolling patients in midstage clinical trials.
Both boards of directors have approved the deal, as have MabVax’s shareholders, but the merge is still subject to approval from Telik stockholders.
If approved, MabVax stockholders will then own 85 percent of the combined company’s stock, and Telik shareholders will own the remaining 15 percent.
MabVax president and CEO David Hansen will serve in the same role at the newly formed company; Telik President and CEO Michael Wick will join the new company’s board.
MabVax, which employs 10, will continue operations in San Diego and is drawing up severance packages for the eight employees who work at Telik in the Bay Area, Hansen said.
Telik was once a fast-growing cancer biotech, having raised more than $500 million in funding, Hansen said. But when some claimed Telik initially witheld the fact that its experimental drug, Telcyta, caused premature death in patients with ovarian cancer, it lost the biotech community’s favor and dropped dramatically. At its highest point, Telik’s stock traded well above $800. It plummeted and then flatlined for several years, however, and at market close May 13 was trading at $1.49.
The Street’s Adam Feuerstein wrote in 2007 that Telik’s actions were “one of the most serious ethical breaches of clinical trial research” that he’s ever come across in biotechnology.