Merck Bets Big on Seattle Genetics for Two Oncology Drugs

Building upon checkpoint inhibitor therapies’ initial successes has been a significant focus of drug development over the past many years. While many companies are developing new checkpoint therapies, some are trying to improve the existing ones by combining them with drugs that may enhance anti-PD1 therapies.

By Ruchi Jhonsa, Ph.D.

In that vein, Merck has entered into two strategic oncology collaborations with Seattle Genetics that might help expand its anti-PD1 therapy in other indications. In this dual deal, Merck gets hold of a prized FDA approved, a breast cancer drug, TUKYSA, and a chance to embark on a program developing and commercializing ladiratuzumab vedotin, an antibody-drug conjugate (ADC) as a monotherapy and combination therapy with its blockbuster drug Keytruda.

“Collaborating with Merck on ladiratuzumab vedotin will allow us to accelerate and broaden its development program in breast cancer and other solid tumors, including in combination with Merck’s KEYTRUDA, while also positioning us to leverage our U.S. and European commercial operations,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. “The strategic collaboration for TUKYSA will help us reach more patients globally and benefit from one of the world’s premier pharmaceutical companies’ established commercial strength.”

The first strategic collaboration is centered on Seattle Genetics’ investigational antibody-conjugate drug, ladiratuzumab vedotin. The drug works to deliver cytotoxic chemotherapy, monomethyl auristatin E to cancer cells via an attached monoclonal antibody against LIV1 protein. The target protein is expressed in most metastatic breast cancers and several lungs, head and neck, esophageal and gastric cancer. Since the drug targets a specific protein on cancer cells, it reduces the chances of systemic side effects and is observed for most chemotherapy drugs.

Under the terms of collaboration, the duo will jointly evaluate ADC as a monotherapy and in combination with Merck’s Keytruda in TNBC, hormone-positive breast cancer, and other LIV-1 expressing solid tumors. For this collaboration, Merck will pay $600 million upfront to Seattle Genetics. It will also invest in the company’s equity by buying 5 million shares of the company at $200 per share, making a $1 billion investment. Seattle Genetics is also eligible to gain milestone rewards of up to $2.6 billion. The duo will share future costs and worldwide profits for the ADC drug equally. The two will jointly commercialize the drug in the U.S. and Europe in which Seattle will be responsible for the marketing application for approval in the US and Canadian markets whereas Merck will be responsible for the same job in Europe and countries outside the US and Canada.

Related Article: Seattle Genetics Enters Breast Cancer Market with Tukysa

The second strategic collaboration grants Merck an exclusive license to commercialize TUKYSA, a small molecule tyrosine kinase inhibitor treatment of HER2-positive cancers, in Asia, the Middle East and Latin America, and other regions outside of the US, Canada, and Europe. At the same time, Seattle Genetics retains the drug’s commercialization rights in the U.S., Canada and Europe. Merck will pay $125 million for the license as an upfront payment and up to $65 million in milestone payments to Seattle Genetics.

TUKYSA is currently approved for breast cancer indication only. But Seattle plans to test it in other cancers in which Merck decided to contribute monetarily. Merck will co-fund a portion of the TUKYSA global development plan, including several ongoing and planned trials across HER2-positive cancers, including breast, colorectal, gastric, and other cancers. In this plan, Seattle Genetics will continue leading the ongoing TUKYSA global development plan and operational execution whereas Merck will solely fund and conduct country-specific trials necessary to support regulatory applications in its territory.

According to Dr. Roger M. Perlmutter, President, Merck Research Laboratories, “These two strategic collaborations will enable us further to 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. We look forward to working with the team at Seattle Genetics to advance the clinical program for ladiratuzumab vedotin, which has shown compelling signals of efficacy in early studies, and to bring TUKYSA to even more patients with cancer around the world.”

Related Article: Merck set to acquire Tilos Therapeutics for $773 million

References:

1. https://www.merck.com/news/seattle-genetics-and-merck-announce-two-strategic-oncology-collaborations/

Author

Ruchi Jhonsa