Merck takes $1bn stake in Seattle Genetics as part of oncology collaboration

Merck is acquiring a $1 billion stake in Seattle Genetics has part of two new strategic oncology collaborations between the two companies.

The companies will globally develop and commercialise Seattle Genetics’ ladiratuzumab vedotin, an investigational antibody-drug conjugate (ADC) targeting LIV-1 currently in phase 2 clinical trials for breast cancer and other solid tumours.

The collaboration will pursue a broad joint development program evaluating ladiratuzumab vedotin as monotherapy and in combination with Merck’s anti-PD-1 therapy Keytruda (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumours.

Seattle Genetics will receive a $600 million upfront payment and Merck will make a $1.0 billion equity investment in 5.0 million shares of Seattle Genetics common stock at a price of $200 per share.

In addition, Seattle Genetics is eligible for progress-dependent milestone payments of up to $2.6 billion.

Separately, Seattle Genetics has granted Merck an exclusive license to commercialise Tukysa (tucatinib), a small molecule tyrosine kinase inhibitor, for the treatment of HER2-positive cancers, in Asia, the Middle East and Latin America and other regions outside of the US, Canada and Europe.

Seattle Genetics will receive $125 million from Merck as an upfront payment and is eligible for progress-dependent milestones of up to $65 million.

“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,” said Clay Siegall, President and CEO of Seattle Genetics.

“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.”

Roger M. Perlmutter, President of Merck Research Laboratories, added: “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.”

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