4:14 PM
Feb 08, 2019
 |  BioCentury  |  Product Development

Merck KGaA's large-scale partnering

Why Merck KGaA is partnering M7824 with GSK rather than going it alone

Merck KGaA's deal with GlaxoSmithKline plc to develop cancer therapy M7824 enables Merck to pursue a more ambitious development plan than it could have done by going it alone, and provides a template for how it may bring similarly broad programs to market going forward.

The deal marks the second time in the past five years Merck has sought out a large pharma partnership for a high value asset as a means to maximize its value and reach, as quickly as possible.

The first time, Merck was playing catch-up when it partnered its PD-L1 inhibitor Bavencio avelumab with Pfizer Inc. in 2014. Bavencio became the fourth PD-1/PD-L1 to market when FDA approved it in March 2017 to treat Merkel cell carcinoma (MCC).

In contrast, the goal of Merck's partnership with GSK is to maintain the first-in-class lead for M7824, a bispecific fusion protein against PD-L1 and TGFβ. There are no other companies with disclosed bispecific molecules against the combination of TGFβ with PD-L1 or PD-1 inhibitors, according to BioCentury's BCIQ database, and most cancer programs against TGFβ are either clinical vaccine-based therapies or preclinical programs against the single target.

On Feb. 5, Merck and GSK announced a global alliance to jointly develop and commercialize M7824. Merck will receive €300 million ($343.6 million) up front and is eligible for €500 million ($572.6 million) in development milestones and €2.9 billion ($3.3 billion) in regulatory and commercial milestones.

"We partner in order to maximize the full potential of those assets.”

Belén Garijo, Merck KGaA

The partners will split the costs and profits 50/50, with Merck booking U.S. sales and GSK booking ex-U.S. sales.

“Those assets which we have identified as having a very high potential, and eventually are associated with a very high financial burden, we...

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