Merck KGaA pays $230M for four Vertex cancer programs

Merck kgaa
The deal gives Merck rights to Vertex compounds that have delivered solid early clinical data.

Merck KGaA has paid Vertex Pharmaceuticals $230 million (€219 million) upfront for the rights to four cancer programs. The deal bulks up Merck’s oncology pipeline through the addition of phase 1/2 DNA repair programs and a preclinical immuno-oncology project.

VX-970, one of two compounds in Vertex’s ataxia telangiectasia and Rad3-related (ATR) protein kinase inhibitor program, is the most advanced of the assets to change hands. Vertex posted phase 1 data last year linking VX-970 to partial responses in platinum-resistant patients with advanced solid tumors.

The tolerability and early efficacy data suggested VX-970 was worth pursuing—a point backed up by its inclusion in eight ongoing National Cancer Institute-sponsored trials—but it also falls outside of Vertex’s core areas of focus.

The same cannot be said for Merck, which has made oncology the centerpiece of its attempt to get its R&D operation back on track after years of missteps in the clinic. Since striking a landmark immuno-oncology deal with Pfizer, Merck has continued to advance its own candidates, which will now be joined in the pipeline by the Vertex compounds.

Merck is buying VX-970 along with another ATR inhibitor, VX-803. The oral candidate, like VX-970, is designed to kill cancer cells by selectively inhibiting ATR, a key regulator of DNA damage repair in tumors. VX-803 is being tested in a phase 1 solid tumor trial.

VX-984, another of the compounds bought by Merck, tackles DNA damage repair from a different angle. The asset is a DNA-dependent protein kinase (DNA-PK) inhibitor that also targets the system for repairing DNA. Merck is familiar with the mechanism of action as it is developing its own DNA-PK inhibitor, M3814, an early-stage candidate it started talking up more than a year ago.

With the Vertex deal also giving Merck two preclinical programs—and its own labs pumping out candidates such as PD-L1-TGFβ bifunctional immunotherapy M7824—the German company now has a pipeline capable of supporting combination therapies, a key battleground in the future of cancer care.

For Vertex, the deal gives it a cash boost to support investment in its core business. Jefferies Analyst Brian Abrahams called the deal “a surprise incremental positive” in a note to investors, adding that it could free up Vertex to strike its own deals to boost its cystic fibrosis pipeline.