Merck & Co. is committing up to $4.2 billion toward a pair of oncology partnerships with Seattle Genetics as well as an equity stake in the Bothell, WA, company.
The companies agreed to co-develop and co-commercialize globally Seattle Genetics’ Phase II antibody-drug conjugate (ADC) ladiratuzumab vedotin, which targets breast cancer and other solid tumors. Ladiratuzumab vedotin will be evaluated both as a monotherapy and in combination with Merck’s blockbuster anti-PD-1 therapy Keytruda® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer, and other LIV-1-expressing solid tumors.
“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,” Seattle Genetics president and CEO Clay Siegall, PhD, said in a statement.
Merck agreed to pay Seattle Genetics $600 million upfront, and buy five million shares of Seattle Genetics common stock at $200 per share, a 16% premium above Monday’s closing share price of $171.79.
Merck also agreed to pay Seattle Genetics up to $2.6 billion in payments tied to achieving milestones—to consist of up to $850 million in development milestones and up to $1.75 billion in sales milestones.
Seattle Genetics and Merck said they will equally share costs on the global development of ladiratuzumab vedotin and other LIV-1-targeting ADCs. The companies also agreed to jointly develop and evenly split future costs and profits for ladiratuzumab vedotin worldwide.
Merck and Seattle Genetics agreed to co-commercialize ladiratuzumab vedotin in the United States and Europe, with Seattle Genetics agreeing to oversee marketing applications for approval in the United States and Canada.
Seattle Genetics will record sales in the United States, Canada, and Europe, while Merck will be responsible for marketing applications for approval in Europe and in countries outside the United States and Canada. Merck will also record sales in countries outside the United States, Europe, and Canada.
The equity investment is set to close subject to completion of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
Exclusive license for Tukysa
In addition, Merck was granted an exclusive license to commercialize Seattle Genetics’ marketed drug Tukysa® (tucatinib), a small molecule tyrosine kinase inhibitor indicated for HER2-positive cancers, in Asia, the Middle East, and Latin America, and other regions outside of the United States, Canada, and Europe. Seattle Genetics will keep commercial rights and record sales in the United States, Canada, and Europe.
Tukysa won FDA approval in April for adult patients with advanced unresectable or metastatic HER2-positive breast cancer, including patients with brain metastases, who have received one or more prior anti-HER2-based regimens in the metastatic setting.
Tukysa has also received approval in Canada, Singapore, Australia, and Switzerland under the Project Orbis initiative of the FDA Oncology Center of Excellence. The initiative is designed to provide a framework for concurrent submission and review of oncology products among international partners.
A marketing application for Tukysa is under review in the European Union.
Merck will oversee marketing applications for approval of Tukysa in its territory, supported by positive results from the Phase II pivotal HER2CLIMB trial (NCT02614794). In October 2019, Seattle Genetics reported that the trial met its primary endpoint of progression-free survival (PFS) by showing that the addition of Tukysa was superior to Roche/Genentech’s Herceptin® (trastuzumab) and chemotherapy drug capecitabine alone, with a 46% reduction in the risk of disease progression or death.
HER2CLIMB was a randomized, double-blind, placebo-controlled, active comparator pivotal trial in patients with locally advanced unresectable or metastatic HER2-positive breast cancer.
Five clinical trials
Tukysa is also under study in five clinical trials, including:
- HER2CLIMB-02 (NCT03975647), a randomized, double-blind Phase III trial evaluating Tukysa in combination with T-DM1 (trastuzumab emtansine; Kadcyla®) versus T-DM1 in first- and second-line metastatic HER2-positive breast cancer.
- CompassHER2 RD (NCT04457596), a randomized, double-blind Phase III trial of Tukysa in combination with T-DM1 versus T-DM1 in the adjuvant breast cancer setting for patients at high risk of relapse.
- MOUNTAINEER (NCT03043313), a pivotal Phase II trial evaluating Tukysa in combination with trastuzumab (Herceptin®) in metastatic HER2-positive colorectal cancer.
- MOUNTAINEER-02 (NCT04499924), a randomized Phase II/III trial evaluating Tukysa in combination with Herceptin, Eli Lilly’s Cyramza® (ramucirumab), and chemo drug paclitaxel versus Cyramza and paclitaxel in second-line metastatic HER2-positive gastric or gastroesophageal junction adenocarcinoma.
- A Phase I trial (NCT04430738) assessing Tukysa in combination with Herceptin and oxaliplatin-based chemotherapy in metastatic HER2-positive colorectal, gastric/gastroesophageal junction, and gallbladder cancers.
Merck also plans to co-fund a portion of the Tukysa global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers, including breast, colorectal, gastric, and other cancers set forth in a global product development plan.
Seattle Genetics agreed to continue leading ongoing Tukysa global development planning and operational execution. Merck, however, will solely fund and conduct country-specific clinical trials necessary to support anticipated regulatory applications in its territory.
Merck agreed to pay Seattle Genetics $125 million upfront, up to $65 million in payments tied to achieving milestones, and $85 million in prepaid research and development payments. Merck also plans to pay Seattle Genetics tiered royalties on sales of Tukysa in Merck’s territory.
“The strategic collaboration for Tukysa will help us reach more patients globally and benefit from the established commercial strength of one of the world’s premier pharmaceutical companies,” Siegall stated.
Added Roger M. Perlmutter, MD, PhD, president, Merck Research Laboratories: “These two strategic collaborations will enable us to further 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.”