CHINA – Merck & Co. has entered into an alliance with Kelun-Biotech, a subsidiary of China’s Sichuan Kelun Pharmaceutical to develop an investigational antibody-drug conjugate (ADC) for the treatment of solid tumors.

Kelun-Biotech announced that it will receive an upfront payment of US$35 million as part of the deal, and is eligible for future milestones totaling up to US$901 million, plus tiered royalties on sales.

In return, Merck was granted exclusive rights to develop, manufacture and commercialize the future ADC drug.

The company has also agreed to work with Kelun on early clinical development of the investigational ADC.

The collaboration…strengthens and diversifies [our] oncology pipeline as we seek to further the potential of ADCs to provide more treatment options and improve outcomes for people with cancer,” commented Eric Rubin, senior vice president for oncology early development at Merck Research Laboratories.

The transaction follows Merck’s decision earlier this year to exercise an option for rights to Kelun’s ADC candidate SKB-264 in territories outside mainland China, Hong Kong, Macau and Taiwan for US$47 million upfront and up to US$1.3 billion in milestones.

Recent cancer drug licensing pact

The transaction follows Merck’s decision earlier this year to exercise an option for rights to Kelun’s ADC candidate SKB-264 in territories outside mainland China, Hong Kong, Macau and Taiwan for US$47 million upfront and up to US$1.3 billion in milestones.

That compound, which targets TROP-2, is already in a Phase III trial for the treatment of metastatic triple-negative breast cancer and is also in Phase II testing for non-small-cell lung cancer and advanced solid tumors.

The biotech is working on 10 ADC programs, three of which are in its clinical-phase pipeline. Besides the TROP-2, Kelun’s other publicly known programs target HER-2 and CLDN 18.2.

The partners will collaborate on certain early clinical development plans, including evaluating SKB-264 as monotherapy and in combination with Merck’s PD-1 inhibitor Keytruda (pembrolizumab) for advanced solid tumors.

In recent years, Merck has built out its ADC capabilities, paying US$2.75 billion to buy VelosBio in 2020, teaming up with Starpharma to evaluate technology in 2021 and stumping up US$47 million for ex-China rights to a TROP2 ADC that is in phase 3 development at Kelun-Biotech.

Along the way, Merck has formed tight ties to Seagen, paying US$1.6 billion to jointly develop a LIV-1 candidate in a possible precursor to a rumored buyout.

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