Merck picks up another ADC agreement

By Ben Hargreaves

- Last updated on GMT

Pic:getty/courtneyk
Pic:getty/courtneyk

Related tags: Merck, ADC

With speculation that Merck is lining up a multi-billion dollar acquisition in the ADC space, the company has agreed a second collaboration deal with Sichuan Kelun Pharmaceutical.

Seagen is still being discussed as a target for Merck​, as the latter company looks to expand more extensively into antibody-drug conjugates (ADCs). However, regardless of any potential deal, the company continues to build out its pipeline in the area by signing a collaboration and exclusive license agreement with Sichuan Kelun Pharmaceutical, a Chinese biotech.

Sichuan Kelun will receive $35m (€34m) in an upfront payment as part of an agreement to develop, manufacture and commercialize an investigational ADC. The biotech could receive a further $901m depending on development, approval and commercial milestones.

Previously, Merck agreed a deal for the worldwide rights, except for the Greater China region, for SKB-264, an investigational TROP2 targeting ADC developed by Sichuan Kelun.

This second drug candidate is currently being tested in a Phase III trial for the treatment of metastatic triple-negative breast cancer, as well as being investigated in Phase II trials for non-small cell lung cancer and advanced solid tumors.

According to Sichuan Kelun, SKB-264 is being explored as a monotherapy and alongside Keytruda (pembrolizumab) for advanced solid tumors. This follows on from other partnerships that Merck has in the space, including with Seagen where the partners are exploring Keytruda in eight combination drug trials alongside various ADCs in different indications.

For Sichuan Kelun, the two ADCs that Merck has partnered on represent just one fifth of the Chinese biotech’s ADC roster, with a further eight novel ADC programs in varying stages of development. Wider than this, the biotech’s pipeline includes 55 therapeutic programs, including small molecule treatments, immuno-oncology assets, and bispecific antibodies.

ADC the space to be

It is likely that this expanded deal will only increase speculation regarding Merck’s potential plans to explore an acquisition of Seagen. Less than two years ago​, Merck was prepared to pay $2.75bn for VelosBio that was primarily based on the potential of just one ADC, VLS-101 – a potential treatment for hematological malignancies.

This year has already seen an explosion of deal making in the ADC space, with various partnership deals announced​ and a build out of manufacturing capabilities​.

This development of the ADC space has happened in concert with the increasing number of approvals, which has accelerated in recent years.

While some the newer generation ADCs, such as AstraZeneca and Daiichi Sankyo’s Enhertu (trastuzumab deruxtecan), have posted clinical trial results that represent a significant improvement on chemotherapy. In clinical trials, Enhertu was able to shrink tumors in 83% of people compared to Genentech’s Kadcyla (trastuzumab emtansine).

Clinical trial results such as this mean that more investment is likely to be seen in the space, and show why Merck is speculated as being prepared to pay such large sums for Seagen.

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