Merck & Co. signs $220M macrocyclic peptide deal after hailing ‘next wave of drug discovery’

Months after hailing macrocyclic peptides as the “next wave of drug discovery,” Merck & Co. has pushed further into the space by penning a $220 million biobucks deal with Unnatural Products.

The California-based biotech uses its combination of AI and chemistry expertise to “address the complexities of medicinal chemistry in the macrocycle space,” the company said in a Jan. 23 release. Now, Merck has tapped up UNP to apply its tech to develop macrocyclic candidates against a “challenging” undisclosed oncology target.

The release was light on financial details, only revealing that UNP will receive an undisclosed upfront payment as well the potential for development and commercial milestones reaching up to $220 million.

“Merck continues to leverage our strong medicinal chemistry capabilities to advance our oncology pipeline,” Rob Garbaccio, head of discovery chemistry at Merck Research Laboratories, said in the release. “We look forward to working with the Unnatural Products team to develop candidates towards this challenging oncology target.”

Merck has previously referred to macrocyclic peptides as the “Goldilocks” chemical modality because “their intermediate size combines the favorable properties of both small molecules and biologics.”

There is a long history of using macrocycle drugs, such as the immunosuppressant cyclosporine and the antibiotic erythromycin. However, efforts to systematically develop macrocycles have run into a range of challenges related to pharmacokinetics, cell permeability and oral bioavailability.

Merck is no stranger to the space, publishing an article on its website last September in which it set out some its research attempts to produce macrocyclic peptides, which it described as “the next wave of drug discovery.”

“Macrocyclic peptides allow us to cast a wider net on the protein interactions we want to drug, providing a vast and untapped opportunity to access a wider range of targets and potentially new ways to treat different diseases,” Merck Research Laboratories’ director of chemistry Dani Schultz said in the September article.

Around the same time, the Big Pharma launched a phase 3 program for MK-0616, a macrocyclic peptide that binds to PCSK9, which is being investigated for reducing low-density lipoprotein cholesterol.

Via its Global Health Innovation Fund, Merck has also been one of the backers of UNP, a privately owned biotech that describes itself as having been “founded by macrocycle pioneers.” The company’s ambition is to use its chemistry and AI-driven platform to “imbue targeted and designed synthetic macrocycles with the favorable drug-likeness of evolved macrocycles found in nature.”

The biotech has stayed quiet for the past couple of years, last raising its head in 2021 to announce a collaboration with BridgeBio aimed at “generating drug-like macrocycles with the hopes of creating the capabilities to hit intracellular targets associated with rare fibrotic diseases and potential oncology applications.”