# VelosBio
VelosBio Inc. was a privately held, clinical-stage biopharmaceutical company founded in San Diego, California in 2017 by Dave Johnson to develop cancer therapies targeting ROR1; it was acquired by [Merck & Co.](https://www.edgepedia.org/merck-and-co) for $2.75 billion in cash, announced on November 5, 2020 and completed in December 2020. Its lead drug was VLS-101, an antibody-drug conjugate (ADC) targeting ROR1, a cell-surface protein on cancer cells.[1](https://www.merck.com/news/merck-to-acquire-velosbio/)
| Key fact | Detail |
|---|---|
| Founded | 2017, by Dave Johnson (CEO)[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology) |
| Headquarters | San Diego, California[1](https://www.merck.com/news/merck-to-acquire-velosbio/) |
| Sector | Biotechnology; oncology, ROR1-targeted therapeutics[1](https://www.merck.com/news/merck-to-acquire-velosbio/) |
| Financing | $58 million Series A (2018); $137 million Series B (July 8, 2020); $202 million gross per the company[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology) • [3](https://www.biospace.com/merck-acquires-velosbio-and-promising-cancer-treatment-for-2-75-billion) |
| Lead investors | Matrix Capital Management and Surveyor Capital (a Citadel company); Arix Bioscience as Series A investor[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology) • [4](https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/) |
| Lead drug | VLS-101, a ROR1-targeting ADC; FDA orphan drug and fast track designations in mantle cell lymphoma[1](https://www.merck.com/news/merck-to-acquire-velosbio/) |
| Outcome | Acquired by Merck & Co. for $2.75 billion in cash, completed December 18, 2020[1](https://www.merck.com/news/merck-to-acquire-velosbio/) • [5](https://arix-bioscience.com/news/completion-of-sale-of-velosbio.html) |
## History, founding and the ROR1 license
Dave Johnson founded VelosBio in 2017 and served as its chief executive officer.[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology) The company operated in stealth until July 8, 2020, when it announced its Series B.[4](https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/)
The company's scientific foundation came through a license. On February 6, 2018, VelosBio entered a license and assignment agreement with Velos Biopharma Holdings, LLC, granting VelosBio an exclusive, sublicensable license to ROR1-reactive antibody technology, with Oncternal Therapeutics a party to specified sections. The licensed ADC products were defined as products containing or comprising a ROR1-reactive antibody conjugated or fused, directly or indirectly, with a cytotoxic or cytostatic compound or radionuclide.[6](https://www.sec.gov/Archives/edgar/data/1260990/000119312519099541/d722331dex1054.htm)
## The science: ROR1 and VLS-101
ROR1, receptor tyrosine kinase-like orphan receptor 1, is a cell-surface protein that the company's drugs were designed to exploit on cancer cells. VLS-101 comprised a monoclonal antibody targeting ROR1 linked to monomethyl auristatin E (MMAE), a chemotherapeutic agent. After the antibody binds ROR1 on a cancer cell, the ADC is designed to enter the cell and release MMAE to destroy it.[1](https://www.merck.com/news/merck-to-acquire-velosbio/)
The pipeline extended beyond the lead program: as of mid-2020 the company listed two additional preclinical ROR1-targeting ADCs and a preclinical bispecific antibody.[4](https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/) In August 2020 the FDA granted VLS-101 both orphan drug and fast track designations for the treatment of mantle cell lymphoma.[7](https://www.businesswire.com/news/home/20200831005097/en/VelosBio-Announces-FDA-Fast-Track-and-Orphan-Drug-Designations-for-VLS-101-in-Patients-with-Mantle-Cell-Lymphoma)
## Funding by the numbers
VelosBio raised $58 million in a [Series A round](https://www.edgepedia.org/series-a-round) in 2018, with Arix Bioscience an investor.[3](https://www.biospace.com/merck-acquires-velosbio-and-promising-cancer-treatment-for-2-75-billion) • [4](https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/) On July 8, 2020 it announced an oversubscribed $137 million Series B led by Matrix Capital Management and Surveyor Capital (a Citadel company), joined by Adage Capital Management, Cormorant Asset Management, Farallon, Foresite Capital, Janus Henderson, and others.[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology)
The company said it had raised $202 million in gross proceeds from private financings since its 2017 founding.[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology)
The exit repaid investors sharply. Arix Bioscience reported gross proceeds of $187.0 million (£138.5 million) from the sale, a 12.5x return on its original $15.0 million investment and an internal rate of return of 328%.[5](https://arix-bioscience.com/news/completion-of-sale-of-velosbio.html)
## Clinical progress and competitive context
At the Series B announcement, VLS-101 was in a first-in-human Phase 1 trial in patients with relapsed or refractory hematologic cancers; the trial covered 210 patients with blood cancers including B- and T-cell non-Hodgkin's lymphomas, chronic lymphocytic leukemia, acute lymphoblastic leukemia, and acute myeloid leukemia.[2](https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology) • [4](https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/)
Phase 1 results presented at the 62nd American Society of Hematology Annual Meeting (December 5–8, 2020) showed objective clinical responses, including complete responses, in 47% (7 of 15) of heavily pretreated mantle cell lymphoma patients and 80% (4 of 5) of diffuse large [B-cell lymphoma](https://www.edgepedia.org/b-cell-lymphoma) patients.[1](https://www.merck.com/news/merck-to-acquire-velosbio/)
VelosBio was part of a wave of ROR1-focused dealmaking in late 2020. The week before Merck's announcement, China's CStone Therapeutics licensed the CB71 ROR1-directed ADC from LegoChem Biosciences in a $353.5 million deal. San Diego neighbor Oncternal Therapeutics, party to sections of VelosBio's original license, had received FDA orphan drug designation that summer for its anti-ROR1 antibody [cirmtuzumab](https://www.edgepedia.org/cirmtuzumab) in mantle cell lymphoma and CLL/SLL.[3](https://www.biospace.com/merck-acquires-velosbio-and-promising-cancer-treatment-for-2-75-billion)
## Acquisition by Merck and immediate outcome
Merck (known as MSD outside the United States and Canada) agreed on November 5, 2020 to acquire all outstanding shares of VelosBio for $2.75 billion in cash, through a subsidiary, subject to customary adjustments and Hart-Scott-Rodino clearance. The sale to Merck & Co. was completed by December 18, 2020 for final all-cash consideration of $2.75 billion.[1](https://www.merck.com/news/merck-to-acquire-velosbio/) • [5](https://arix-bioscience.com/news/completion-of-sale-of-velosbio.html) Merck's audited FY2020 10-K describes the acquisition, completed in December 2020, as for $2.8 billion and accounted for as an asset acquisition; the announced and closing press figures were $2.75 billion.[8](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/R12.htm) • [1](https://www.merck.com/news/merck-to-acquire-velosbio/)
The accounting explains why Merck paid such a price for a company with no approved products: under asset-acquisition treatment, Merck recorded net assets of $180 million (primarily cash) and charged $2.7 billion of the deal to research and development expense in 2020, effectively expensing the pipeline's value immediately.[8](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/R12.htm) VLS-101 became MK-2140 in Merck's pipeline, at acquisition in clinical evaluation for hematologic malignancies and solid tumors.[8](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/R12.htm) With the closing, VelosBio ceased to exist as an independent company.
## References
1. Merck to Acquire VelosBio (Merck press release, November 5, 2020): https://www.merck.com/news/merck-to-acquire-velosbio/
2. VelosBio Raises $137 Million in Series B Financing (Business Wire, July 8, 2020): https://www.businesswire.com/news/home/20200708005049/en/VelosBio-Raises-%24137-Million-in-Series-B-Financing-to-Advance-Development-of-ROR1-Directed-Therapeutics-in-Oncology
3. Merck Snaps Up VelosBio and its ROR1 Inhibitor in $2.75 Billion Deal (BioSpace): https://www.biospace.com/merck-acquires-velosbio-and-promising-cancer-treatment-for-2-75-billion
4. VelosBio raises $137M Series B round (MedCity News, July 2020): https://medcitynews.com/2020/07/velosbio-raises-137m-series-b-round-to-support-suite-of-ror1-targeting-cancer-drugs/
5. Completion of sale of VelosBio (Arix Bioscience RNS, December 18, 2020): https://arix-bioscience.com/news/completion-of-sale-of-velosbio.html
6. License and Assignment Agreement, February 6, 2018 (SEC Exhibit 10.54): https://www.sec.gov/Archives/edgar/data/1260990/000119312519099541/d722331dex1054.htm
7. VelosBio Announces FDA Fast Track and Orphan Drug Designations for VLS-101 (Business Wire, August 31, 2020): https://www.businesswire.com/news/home/20200831005097/en/VelosBio-Announces-FDA-Fast-Track-and-Orphan-Drug-Designations-for-VLS-101-in-Patients-with-Mantle-Cell-Lymphoma
8. Merck & Co. Form 10-K (FY2020), Acquisitions note: https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/R12.htm
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*Topic: Encyclopedia › Society and history › Economics and business › Business and work › Business and work overview › Companies and corporations › Venture-backed startups and growth companies › Health, biotech, and medtech startups › Biologics and antibody developers › Oncology biologics developers › Antibody-drug conjugate developers*
*Initially written Sep 17, 2026 · Edited: Oct 11, 2026; Oct 15, 2026*
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