Merck & Co. is paying $588 million upfront to defend its Keytruda kingdom. The outlay, plus up to $2.7 billion in milestones, has secured Merck global rights to LaNova Medicines’ PD-1xVEGF bispecific antibody.
Interest in PD-(L)1xVEGF bispecific antibodies went supernova in September, when Akeso and Summit Therapeutics’ reported that ivonescimab beat Keytruda in a head-to-head trial. While there are caveats about the trial, which took place in China and didn’t use the standard-of-care comparator, the result still sent shockwaves through the immuno-oncology industry.
Merck, which made $25 billion from Keytruda last year, has the most to lose if PD-(L)1xVEGF bispecifics supplant traditional checkpoint inhibitors, although biosimilars may have eroded its empire by the time the new class makes its mark. If the bispecifics are to topple king Keytruda, the Big Pharma wants to be one of the companies that emerges holding a slice of the market.
China’s LaNova is the beneficiary of Merck’s desire to enter the sector. The Chinese put itself on the map last month when it disclosed the start of a phase 1 advanced solid tumor trial of its bispecific, LM-299, in China and a $42 million financing round. LaNova had already begun putting together another financing round when it shared the update.
Merck has secured an exclusive global license to LM-299. The milestone payments cover technology transfer, development, regulatory approval and commercialization successes across multiple indications.
The size of the upfront shows how steeply and quickly excitement about the mechanism has ramped up. One year ago, BioNTech paid $55 million upfront for ex-China rights to a PD-L1xVEGF bispecific that was already in phase 2. Merck is paying more than 10 times as much for a molecule that has only just begun human testing.
Jannie Oosthuizen, president of Merck Human Health U.S., discussed PD-(L)1xVEGF bispecifics at a UBS event on Wednesday. Oosthuizen said Merck was monitoring the area very closely but raised questions about the mechanism, noting toxicity the company saw when giving Keytruda with the VEGF inhibitor Lenvima. The executive said it will be interesting to see whether the bispecifics perform differently.
Merck will now learn firsthand how a bispecific performs. The drugmaker is yet to share details of its plans for developing the asset beyond a comment about advancing with speed and rigor. Merck needs to move fast to keep in sight of more advanced rivals but the story of Keytruda, which came from behind to dominate the checkpoint inhibitor market, shows its ability to mount a late charge to the finish.