Merck and Seattle Genetics have entered into two strategic oncology collaborations to commercialise Seattle Genetics’ antibody-drug conjugate (ADC) ladiratuzumab vedotin and small-molecule tyrosine kinase inhibitor (TKI) Tukysa (tucatinib).
As per terms of the deal, both companies will work together and equally share costs on the global development of ladiratuzumab vedotin and other LIV-1-targeting ADCs.
The firms will develop and share future costs and profits for ladiratuzumab vedotin on a 50:50 basis across the world.
Seattle Genetics will secure $600m upfront and $1bn equity investment for five million shares at a price of $200 per share from Merck.
Furthermore, Seattle Genetics is also eligible to secure up to $2.6bn in milestone payments, including $850m in development milestones and $1.75bn in sales milestones.
Both firms will co-commercialise ladiratuzumab vedotin in the US and Europe, while Seattle Genetics will take care of marketing applications for approval in the US and Canada, as well as monitor sales in the US, Canada and Europe.
Merck will take responsibility for marketing applications for approval in Europe and in countries outside the US, as well as monitor sales in countries outside the US, Europe and Canada.
Seattle Genetics is expected to secure up to $4.2bn, including the upfront payment, equity investment proceeds and potential milestone payments.
Seattle Genetics has granted exclusive rights to the Merck for commercialisation of Tukysa in Asia, the Middle East and Latin America and other regions outside of the US, Canada and Europe.
Seattle Genetics will hold commercial rights and monitor sales in the US, Canada and Europe, while Merck will oversee marketing applications for approval in its territory based on positive results from the HER2CLIMB clinical study.
Merck will pay $125m upfront payment and progress-dependent milestones of up to $65m to Seattle Genetics.
Seattle Genetics will also secure $85m in prepaid research and development payments, which will be applied to Merck’s global development funding obligations. Finally, the company will secure tiered royalties on sales of Tukysa in Merck’s territory.
Merck Research Laboratories president Dr Roger Perlmutter said: “These two strategic collaborations will enable us to further diversify Merck’s broad oncology portfolio and pipeline, and to continue our efforts to extend and improve the lives of as many patients with cancer as possible.”
In May this year, Merck agreed to acquire Themis Bioscience, an Austrian pharma company, which is currently engaged in developing a vaccine for Covid-19.