Incyte in $200M-plus Merus research deal, shares jump

The biobucks side of the deal could be worth billions of dollars, although many years and hurdles lay ahead.

Incyte will pay around $120 million upfront with an $80 million share buy-in to gain access to Netherlands biotech Merus and its preclinical Biclonics platform, sending Merus’ shares up 53% premarket on the news.

The deal will see the pair work on and eventually seek to sell up to 11 bispecific antibody programs from Merus’ platform, with a mixture of co-funding deals and biobucks down the line on three of them, depending on what comes out of testing.

For the remaining eight programs, Incyte will fund all development and commercialization, it said in a statement.

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For these programs, Merus will get up to $350 million each, which could result in an “aggregate milestone opportunity” of $2.8 billion if things go perfectly well.

Merus will also retain rights to both of its clinical candidates and MCLA-158 (which is expected to enter the clinic as a treatment for colorectal cancer before the end of 2017), as well as its tech and future programs coming out of its platform that haven’t been made part of this deal.

This research collab revolves around Biclonics, which retain the IgG format of antibodies produced by the immune system and, by binding to two targets, are designed to allow for a number of modes of action that can’t be done with conventional mAbs.

The cancer specialist has listed Novartis, Johnson & Johnson and Pfizer among its largest investors.

“By virtue of a unique ability to simultaneously engage multiple protein targets, we believe bispecific antibodies have the potential to play an important role in the future of biotherapeutics,” said Reid Huber, Incyte’s chief scientific officer, in the statement. “This collaboration with Merus expands our large molecule discovery capabilities into an innovation-rich area of research, creating additional opportunities for us to deliver on our commitment to improving and extending the lives of patients with cancer and other serious diseases.”

Added Merus CEO Ton Logtenberg: “This transformative, global collaboration further underscores the potential of Merus’ Biclonics technology platform and establishes a strong relationship with Incyte, a leader in innovative drug development. We look forward to expanding our pipeline under this agreement, as we efficiently exploit our preclinical discovery engine and progress our most advanced, proprietary assets in the clinic.”

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