MEI Pharma to explore strategic options after failed Infinity merger

MEI Pharma is currently evaluating strategic alternatives, which could include potential transactions or possibly winding down the company to maximize shareholder value. The decision to explore these options was approved by the board of directors and announced in a press release on Monday.

Throughout 2023, MEI Pharma attempted a significant merger with Infinity Pharmaceuticals, which was intended to transform Infinity into a wholly-owned subsidiary of MEI. This plan, however, was disrupted when Infinity's investors made their own bid, leading to a shareholder vote that ultimately rejected the merger. As a consequence, Infinity filed for bankruptcy in October 2023, a possibility that executives had cautioned about if the merger did not proceed.

Now, MEI Pharma finds itself in a precarious situation similar to Infinity's recent past. The company announced it would initiate a reduction in force "as soon as practicable" and cease all clinical activities related to voruciclib, an oral CDK9 inhibitor that had been under development for treating acute myeloid leukemia and B cell malignancies.

Further changes in leadership are set to take place as part of MEI's strategic evaluation. CEO David Urso and Chief Medical Officer Richard Ghalie, M.D., will resign from their positions effective August 1. Urso will also leave his seat on the board of directors. Both executives will continue to support the company through consulting agreements aimed at aiding the strategic review process. Additionally, Board Chairperson Charles Baltic will step down. CFO Justin File is slated to assume the role of acting CEO following Urso's departure, while Frederick Driscoll will take over as the chairperson of the board during this transitional period.

As MEI Pharma navigates these turbulent times, the company is considering various options, including out-licensing existing programs or pursuing a merger and acquisition. CFO Justin File emphasized the importance of exploring strategic alternatives while managing the company's resources wisely. "The company’s board and management team believe that it is prudent to focus the company’s resources and efforts on the exploration of potential strategic alternatives, and during that process to practice prudent cash management," File stated. He added that if no advantageous strategic alternatives present themselves, the company may consider an orderly wind-down of operations.

In summary, MEI Pharma is at a critical juncture, grappling with the aftermath of a failed merger and facing the need for significant organizational changes. As it evaluates future pathways to maximize shareholder value, the company must navigate a complex landscape of potential transactions or possibly winding down its operations, all while managing its resources with caution.