Merck & Co. will partner with Sutro Biopharma to discover and develop novel immune-modulating therapies for cancer and autoimmune disorders through a collaboration that Sutro said today could generate for it up to $1.66 billion plus royalties.

Merck plans to apply Sutro's proprietary cell-free protein synthesis and site-specific conjugation platforms to discover and develop best-in-class immune-modulating cytokine derivatives for both oncology and autoimmune indications. The platforms are designed to facilitate precision design and rapid empirical optimization of protein conjugates.

Among those platforms is XpressCF™, designed to provide customized manufacture, design, and development of therapeutic proteins, as well as to enable the discovery of drugs that feature therapeutic proteins containing the 20 natural amino acids. 

Another Sutro platform, XpressCF+™, is intended to design, discover, characterize, and manufacture therapeutic proteins containing one or more non-natural amino acids, in addition to natural amino acids, and to discover drugs that feature such proteins. Using XpressCF+ to incorporate an unnatural amino acid results in a protein that, according to Sutro, can be conjugated to a chemical of interest in a site-specific manner, enabling homogenous single-species protein-drug conjugates.

An additional Sutro technology, ProteinSAR™, is designed for conducting research to identify and characterize the structure, function, and the relationship of the therapeutic proteins.

Analyzing the Structure-Function Relationship

Sutro says its technologies allow for rapid and deep analysis of the structure-function relationship that is impractical with traditional cell-based methods for protein expression.

“Sutro has an impressive suite of technologies that make possible the discovery, characterization, and manufacture of novel therapeutic proteins in a timely manner,” Joe Miletich, M.D., Ph.D., SVP, discovery, preclinical and early development, Merck Research Laboratories, said in a statement. “We look forward to collaborating with Sutro to further expand our pipeline of promising candidates targeting oncology and autoimmune diseases.”

Sutro said it will be primarily responsible for preclinical research, while Merck will gain exclusive worldwide rights to therapeutic candidates derived from the collaboration.

Under their collaboration and licensing agreement, Merck agreed to pay Sutro $60 million upfront and up to $1.6 billion in payments tied to achieving milestones toward the development and sale of all therapeutic candidates and all possible indications identified by the companies. Merck also agreed to pay Sutro tiered royalties on sales of products generated through the collaboration.

“There's an urgent need for novel, targeted, and well-tolerated therapies with improved therapeutic profiles for cancer and autoimmune disease,” added Sutro CEO Bill Newell.

Based in South San Francisco, CA, Suto designs cytokine-based immuno-oncology therapies, antibody-drug conjugates, and bispecific antibodies primarily directed at clinically-validated targets for which current standard of care is suboptimal.

In addition to Merck & Co., Sutro has cancer-focused collaborations with Merck KGaA and with Celgene. Last year, Sutro and Celgene reworked their immuno-oncology collaboration, with Celgene ending its option to acquire Sutro in return for gaining full global rights to a second Sutro preclinical program, and outside-U.S. rights to two others.

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