Merck has taken a $1bn equity stake in Seattle Genetics, with a total consideration of $4.5bn agreed for two of the biotech’s cancer drugs.
The first drug covered in the deal, investigational antibody-drug conjugate (ADC) targeting LIV-1 ladiratuzumab vedotin, will be jointly developed and commercialised by Merck and Seattle Genetics.
The ADC is currently in phase 2 clinical trials for breast cancer and other solid tumours, and will go on to be developed as a monotherapy and in combination with Merck PD-1 inhibitor Keytruda (pembrolizumab) following the new agreement.
As part of this expansive clinical programme, Merck and Seattle Genetics are set to investigate ladiratuzumab vedotin in a number of additional cancer types, including triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1 expressing solid tumours.
LIV-1, which is quickly emerging as a novel cancer target, is expressed in most metastatic breast cancers and has also been observed in several other cancer types, such as lung, head and neck, oesophageal and gastric cancer.
Ladiratuzumab vedotin binds to LIV-1 on cancer cells, where it then releases a cell-killing agent into the target cells upon internalisation. According to Seattle Genetics, the investigational ADC could also cause antitumour activity through other mechanisms, by potentially activating an immune response by induction of immunogenic cell death.
For access to ladiratuzumab vedotin, Merck is willing to part with $600m in an upfront payment to Seattle Genetics, with a further $1bn equity investment agreed in five million shares of the biotech. Seattle Genetics will also be eligible for further progress-dependent milestone payments of up to $2.6bn.
In a separate agreement, Seattle Genetics has granted Merck an exclusive license to commercialise Tukysa (tucatinib), a small molecule tyrosine kinase inhibitor, in Asia, the Middle East, Latin America and other regions outside the US, Canada and Europe.
Merck will pay Seattle Genetics $125m upfront for the licence, and will also potentially pay an additional $65m in progress-dependent milestones.
In addition to the commercialisation agreement, Merck will also co-fund a portion of the Tukysa global development plan, which includes several ongoing and planned trials across HER2-positive cancers. Seattle Genetics will receive $85m in prepaid research and development payments to be applied to Merck’s global development funding obligations.
Tukysa was approved by the US Food and Drug Administration (FDA) in April this year as a treatment for adult patients with advanced resectable or metastatic HER2-positive breast cancer. It is indicated for use in patients with brain metastases who have received one or more prior anti-HER2-based regimens in the advanced setting.