New Oncology Projects

Merck, also known as MSD, has announced a partnership with Seattle Genetics, the biotech and oncology specialist. The companies have reached an agreement to collaborate on the development and marketing of Seattle’s Ladiratuzumab Vedotin antibody-drug conjugate (ADC). The ADC is currently undergoing Phase II trials for solid tumors including breast cancer. Further work on the drug will test the drug’s effectiveness as both a solo treatment and combined with Merck’s Keytruda PD-1 inhibitor in breast cancer and other solid tumor types.

KeytrudaKeytruda is a pembrolizumab treatment designed as an antibody to attack the cell surface of the tumor. When administered, pembrolizumab binds to the PD-1 (programmed death 1), inhibiting the signaling receptor on the surface of the T cells. This blocks the binding and activation of the PD-1 molecules, triggering the activation of T cell immune responses against the tumor. This process also helps the patient’s immunity better attack the tumor.

Seattle Genetic’s ADC treatment is designed to attach to LIV-1 on cancerous cells, and when internalized into the cell, release a cell-killing agent. Metastatic breast cancers normally release LIV-1 which their ADC agent targets. Other cancers like; prostate, melanoma, ovarian, cervical, and uterine, also release LIV-1. Success against breast cancer could lead to this treatment being effective against these other types of tumors.

logoSeattle’s proprietary technology allows the treatment to be optimized to theoretically improve individual patient outcomes. Their ADC technology uses cell destroying cytotoxic agents, with monoclonal antibodies linked through an innovative system to increase effectiveness.

The terms of the arrangement provide Seattle with funds of $600 million, and Merck will invest $1 billion equity in Seattle Genetics with the purchase of 5 million shares. The deal also offers Seattle progress incentives of up to $2.6 billion for work on their ADC program.

In a separate agreement, Merck has licensed to market Tukysa, their tyrosine kinase inhibitor drug for the treatment of HER-2 positive tumors. The license covers South America, Asia, and the Middle East, along with any area outside of Europe, Canada, and the US. This extra deal will earn Seattle $125 million with progress incentives of up to $65 million. These deals and their progress dependent milestone goals should improve the treatment options for patients suffering from these types of cancers.

logoThis collaboration with Merck offers Seattle Genetics the chance to increase the progress on their Ladiratuzumab Vedotin drug program, and to trial the effectiveness when used in combination with Merck’s treatment. The deal also offers the company scope to reach more patients with their Tukysa drug, thanks to the commercial strength of Merck’s pharmaceutical business and marketing experience.

Strengthening of the relationship helps Merck too. They get the opportunity to broaden their range of oncology products while improving the viability of their current line up. This arrangement helps patients too, with wider access to different treatments and more investment in products showing some promise in the field of oncology.

The deal which seems Merck buying 5 million shares for $200 per share, should improve investor value as well as improving the development of new oncology treatments.

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