NEW YORK – Seattle Genetics and Merck on Monday announced two strategic collaborations for the development of certain precision oncology assets, under which Seattle Genetics will receive $725 million in upfront payments and $1 billion in equity investment from Merck.
Under the first collaboration, Seattle Genetics and Merck will jointly develop and commercialize the investigational, LIV-1 targeting antibody drug conjugate ladiratuzumab vedotin, which is currently being evaluated in Phase II clinical trials for the treatment of triple-negative breast cancer, hormone receptor-positive breast cancer, and other LIV-1-expressing solid tumors. Seattle Genetics and Merck will jointly develop ladiratuzumab vedotin as a monotherapy and in combination with Merck's pembrolizumab (Keytruda), and the companies will share future costs and profits evenly.
Under the terms of the agreement, Seattle Genetics will receive $600 million upfront and Merck will make a $1 billion equity investment, purchasing 5 million shares of Seattle Genetics common stock at $200 per share. Seattle Genetics will also be eligible for progress-dependent milestone payments of up to $2.6 billion.
The second strategic collaboration concerns Seattle Genetics' HER2 inhibitor tucatinib (Tukysa), which received US Food and Drug Administration approval in April for the treatment of previously treated, unresectable, or metastatic HER2-positive breast cancer in combination with trastuzumab (Genentech's Herceptin) and capecitabine. Under the terms of the agreement, Seattle Genetics has granted Merck exclusive rights to commercialize tucatinib in Canada, Europe, Asia, the Middle East, Latin America, and in other regions outside the US.
For tucatinib, Seattle Genetics will receive $125 million upfront from Merck and will be eligible for progress-dependent milestones of up to $65 million.
Seattle Genetics will retain commercial rights to the drug in the US, Canada, and Europe, and record sales in these territories. Additionally, the company is slated to receive tiered royalties on tucatinib sales in Merck's territories, as well as $85 million in prepaid R&D payments, which will be applied to Merck’s funding obligations for developing tucatinib in its territories.
The terms stipulate that Merck will co-fund parts of tucatinib's development plan, including ongoing and planned clinical trials to evaluate the agent in various HER2-expressing cancers, such as for breast, colorectal, and gastric tumors. Seattle Genetics will continue to lead global development and operational plans for the drug, though Merck will spearhead clinical trials needed to support regulatory approvals in its specific territories.
In a statement, Seattle Genetics touted that its deal with Merck will accelerate the development of ladiratuzumab vedotin and allow patients around the world to receive tucatinib. Merck, in turn, highlighted that the addition of these agents will diversify its oncology portfolio.