Merck (MRK, Financial) is advancing into the promising field of bispecific antibodies by acquiring the rights to an experimental cancer antibody from LaNova Medicines. The deal involves a $588 million upfront payment and potential milestone payments of up to $2.7 billion. Under this agreement, Merck gains global exclusive rights to LM-299, a bispecific antibody currently in Phase 1 clinical trials in China, designed to combat cancer through multiple mechanisms.
LM-299 works by blocking the PD-1 protein, similar to Merck's leading cancer drug Keytruda, and also targets the VEGF protein, akin to Roche's cancer drug Avastin. This dual-targeting strategy aims to enhance the immune system's ability to fight cancer and inhibit tumor blood vessel growth.
Following the announcement, Merck's shares saw a temporary boost of approximately 1% in pre-market trading, though the stock has declined by 9.7% year-to-date. In recent years, Merck has strategically invested in diversifying its product lineup to reduce reliance on Keytruda.
In 2023, the company spent nearly $11 billion acquiring Prometheus Biosciences for autoimmune disease therapies and entered a $22 billion cancer drug partnership with Daiichi Sankyo. In 2021, Merck acquired Acceleron Pharma for $11 billion, gaining a drug for rare lung diseases.
Bispecific antibodies have emerged as a hot area in drug development. In August, Merck acquired rights to a bispecific blood cancer treatment from Curon Biopharmaceutical for $700 million plus milestone payments. Meanwhile, success in bispecific drug trials has boosted Summit Therapeutics' (SMMT) stock, and Ottimo Pharma, led by former Seagen CEO David Epstein, explores similar approaches.
Merck anticipates closing the LaNova deal in the fourth quarter, accounting for the $588 million pretax expense.
