Merck to buy rights to Chinese cancer drug for up to $3.3B
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Merck (NYSE:MRK) and LaNova Medicines announced Thursday an agreement under which the U.S. pharmaceutical giant is expected to obtain licensing rights to a cancer candidate known as LM-299 from the Chinese biotech in a deal worth up to $3.3B.
LM-299 is designed to target two key cancer-related molecules called programmed cell death protein-1 (PD-1) and vascular endothelial growth factor (VEGF).
The PD-1/VEGF bispecific antibody is undergoing a Phase 1 trial in China, and its patient enrollments are currently underway.
According to the deal terms, Merck (MRK) will receive an exclusive global license to develop, manufacture, and commercialize LM-299 in exchange for $588M upfront and up to $2.7B in milestone payments.
The companies said the latter payments will be subject to regulatory and commercialization milestones related to LM-299 across multiple indications.
Merck (MRK) is expected to record a pre-tax charge for the $588M payment when the deal closes, potentially in Q4 2024.
Stocks to watch include biotechs such as Summit Therapeutics (SMMT), Instil Bio (TIL), and BioNTech (BNTX), whose pipelines include similar PD-1/VEGF bispecific antibodies in development.