As part of the global alliance between Merck and Pfizer to jointly develop and commercialize avelumab, an immune checkpoint inhibitor, the companies have embarked on a collaboration agreement with Dako, an Agilent Technologies company, for the development of a potential companion diagnostic test (CDx).

Avelumab (also known as MSB0010718C) is a fully human anti-PD-L1 IgG1 monoclonal antibody. By inhibiting PD-L1 interactions, avelumab is thought to potentially enable the activation of T cells and the adaptive immune system. By retaining a native Fc-region, avelumab is thought to engage the innate immune system and induce antibody-dependent cell-mediated cytotoxicity.

In November 2014, Merck KGaA and Pfizer announced a strategic alliance to co-develop and co-commercialize avelumab, in a deal that raised the companies’ presence in cancer immunotherapies—and one which is expected to net the German drug developer as much as $2.85 billion. The companies are expected to launch up to 20 “high priority” immuno-oncology clinical development programs involving the compound. The clinical development programs include up to six Phase II or Phase III registration trials.

The new three-party agreement enables Dako, Merck, and Pfizer to work to develop the CDx to assess programmed death-ligand 1 (PD-L1) protein expression levels in tumor tissue, and its microenvironment, including tumor-associated immune cells.

The companion diagnostic is part of the protocols in ongoing clinical trials of avelumab, some of which will be reported at upcoming scientific congresses.

Pfizer and Merck KGaA said they will study MSB0010718C both as a single agent as well as in various combinations with Pfizer’s and Merck KGaA’s broad portfolio of approved and investigational oncology therapies.

The anti-PD-L1 antibody is a potential treatment for multiple types of cancer now in two ongoing clinical studies: A Phase II trial evaluating the antibody in patients with metastatic Merkel cell carcinoma; and a Phase I program in more than 550 patients across were treated with MSB0010718C across multiple types of cancers.

The financial terms of today’s agreement were not disclosed.

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