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Seattle Genetics teams up with Merck in cancer

September 14, 2020

Seattle Genetics (NASDAQ:SGEN), +9% premarket and Merck (NYSE:MRK) announce two new strategic oncology collaborations.

The companies will globally develop and commercialize Seattle Genetics’ ladiratuzumab vedotin, an investigational antibody-drug conjugate (ADC) targeting LIV-1 for breast cancer and other solid tumors.

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 tumors.

Under the terms of the agreement, Seattle Genetics will receive a $600M upfront payment and Merck will make a $1B equity investment in 5M shares of Seattle’s common stock at a price of $200/share.

In addition, Seattle Genetics is eligible for progress-dependent milestone payments of up to $2.6B. Including the upfront payment, equity investment and milestone payments, SGEN is eligible to receive up to $4.2B.

The companies will jointly develop and commercialize ladiratuzumab vedotin and equally share profits worldwide.

Separately, Seattle Genetics has granted Merck an exclusive license to commercialize 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 U.S., Canada and Europe. SGEN retains commercial rights and will record sales in the U.S., Canada and Europe.

The Company will receive $125M million from Merck as an upfront payment, up to $65 of milestone payments, $85M in prepaid R&D payments and tiered royalties on sales of TUKYSA in Merck’s territory.

Merck will also co-fund a portion of the TUKYSA global development plan, which encompasses several trials across HER2-positive cancers, including breast, colorectal, gastric and other cancers.

Seattle Genetics will host a conference call to discuss these collaborations today at 9:00 a.m. ET.

https://seekingalpha.com/news/3613576-seattle-genetics-teams-up-merck-in-cancer

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