MERCK INVESTS OVER $1 BILLION IN SEATTLE GENETICS PARTNERSHIP
by John G. Baresky on 09/14/20
Merck continues its aggressive 2020 business strategy with landmark Seattle Genetics collaboration
Through a major clinical and commercial initiative focused on the development and marketing of oncology therapies Merck (MYSE: MRK) is
investing heavily in a partnership with Seattle Genetics (NASDAQ: SGEN).
Kenilworth, New Jersey based Merck
is acquiring $1 billion of Seattle Genetics’ stock at a 30% premium based on its current share price. Merck is also committing over $600
million in funding to help develop Ladiratuzumab,
a monoclonal antibody (mAb) that Seattle Genetics is working on with the intent
for it be approved by the FDA for use in oncology. Merck and Seattle Genetics are intrigued by the possibility the novel mAb could be paired with Merck's blockbuster Keytruda oncology drug as a co-therapy in breast cancer treatment and perhaps others.
In addition to the investments in Seattle Genetics' stock and
Ladiratuzumab, the agreement includes the rights for Merck (who is committing up to $200 million in this arrangement) to market Tukysa (a Seattle Genetics mAb that is already FDA approved for use in treating breast cancer) in global markets. Merck will commercialize Tukysa in Asia, Latin America and the Middle East.
All in, the strategic partnership with Seattle Genetics may push Merck's financial commitment to over $2 billion if certain product development and approval milestones are met that are additional elements within the collaboration deal.
Merck is undergoing a major corporate transformation
Merck emerged from 2019 on a positive note and has not taken its sights off of achieving significant planned and unplanned 2020 goals involving partnerships, new product launches and major business unit divestitures.
In less than 1 year Merck has undertaken a series of impressive actions that continued even as the pandemic unfolded:
- In December, 2019 Merck received approval for Ervebo, the world's first Ebola vaccine approved by the FDA and CHMP
- Merck's first major move in 2020 occurred in February when it announced plans to develop an entirely new company through a spinoff of several product franchises joined together as an entirely separate enterprise
- The company sold off its StayWell business unit to WebMD in March
- In April Merck's clinical and commercial partnership with AstraZeneca launched Koselugo (FDA approved to treat Neurofibromatosis Type 1 (NF1)) and the same collaboration earned a new prostate cancer indication for its jointly developed Lynparza therapy in May
- Merck formally entered the battle against the coronavirus in May when it launched a COVID-19 initiative that encompasses the development of an antiviral and 2 vaccine candidates plus the acquisition of Themis Biosciences
