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MabVax in talks to merge with Calif-based cancer drug developer Oncotelic

MabVax Therapeutics Holdings Inc. is in discussions to merge with privately held cancer drug developer Oncotelic Inc. in an all-stock transaction.

San Diego-based MabVax and Agoura Hills, Calif.-based Oncotelic entered a nonbinding letter of intent on Jan. 3 to kickstart the combination.

Under the proposed agreement, Oncotelic will merge with a subsidiary of MabVax and the combined company will be renamed Oncotelic Inc. once the deal closes.

Oncotelic shareholders will own 75% of the combined company, with MabVax stockholders owning the remaining 25% on a pro forma basis. Oncotelic founder Vuong Trieu will become the executive chairman of the combined company, with certain senior executives from MabVax staying back to fill key roles.

The agreement also contemplates securing financing of at least $10 million to fund the clinical development of Oncotelic's experimental cancer drug trabedersen, which is being developed to treat glioblastoma, a form of brain cancer, and pancreatic cancer. The merged entity could also further develop MabVax's potential pancreatic cancer treatment, 5B1.

The transaction is subject to approval by MabVax's board and achieving certain financing objectives.

The deal comes after MabVax said in December 2018 that it had hired Objective Capital Partners as financial adviser to explore a sale of its clinical and preclinical assets.