Merck KGaA, GSK pen $4.2B biobucks pact for next-gen Bavencio

GlaxoSmithKline GSK House in Brentford, UK
GlaxoSmithKline GSK House in Brentford, U.K. (GlaxoSmithKline)

German Merck, already partnered up with Pfizer on their immuno-oncology drug Bavencio, is hitting up another Big Pharma for developmental work worth billions in biobucks for a next-generation I-O drug that can take on Keytruda.

The deal with London’s GlaxoSmithKline sees Merck gain €300 million upfront with milestone payments of up to €500 million and potential sales of €2.9 billion, which brings the total to an eye-watering—if not with a major series of what-ifs—of €3.7 billion ($4.16 billion). Normal caveats, i.e., it may not get approved, as always apply to this final figure.

This comes just a few months after GSK also spent $5.1 billion on cancer biotech Tesaro, and during a period of major restructuring, new personnel and R&D shifts at the company that has seen it once again refocus on oncology research.

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This latest deal focuses around M7824 (a.k.a. bintrafusp alfa), a bifunctional fusion protein immunotherapy that is currently in the clinic, including potential registration studies, for a series of solid tumors.  

One of the most advanced is a midstage test for M7824 pitted against U.S. Merck’s I-O giant Keytruda, as a first-line treatment in patients with PD-L1 expressing advanced non-small cell lung cancer (NSCLC). No small feat given its U.S. rival’s dominance.

German Merck already markets, alongside partner Pfizer, an I-O drug in the form of Bavencio, a PD-L1 checkpoint inhibitor for certain forms of cancer. But it came late to the checkpoint party after rivals Bristol-Myers Squibb and U.S. Merck.

The drug, originally developed by Merck, saw Pfizer get in on the action in 2014 in a deal worth $850 million, but it has struggled to make traction in the clinic, seeing several setbacks including most recently in ovarian cancer and lung cancer.

Pfizer seems to have passed on M7824, leaving the door open for cancer asset-hungry GSK to step in.

RELATED: Pfizer's Bavencio flops third key study, this time in lung cancer. Can crossover really explain it?

With bintrafusp alfa, German Merck it’s hoping to that Bavencio 2.0 will have better luck in the lab: The drug works as a bifunctional immunotherapy that is designed to combine a TGF-β trap with the anti-PD-L1 mechanism in one fusion protein.

M7824 is designed to combine co-localised blocking of the two immuno-suppressive pathways: Targeting both pathways aims to control tumor growth by potentially restoring and enhancing antitumor responses.

To date, the German pharma says nearly 700 patients have been treated with M7824 across more than 10 tumor types in early clinical testing.  

“Encouraging data from the ongoing Phase I studies indicates M7824’s potential safety and clinical antitumor activity across multiple types of difficult-to-treat cancers, including advanced NSCLC, human papillomavirus-associated cancers, biliary tract cancer and gastric cancer,” GSK added in a statement.  

As well as monotherapy work, the pair said they are also weighing up combos with “other assets from the pipelines of both companies.”

For GSK, this could include its pipeline work with Adaptimmune and its recent buy of Tesaro with its PARP assets.

Hal Barron, CSO and president of R&D at GSK, said, “Despite recent medical advances, many patients with difficult-to-treat cancers don’t currently benefit from immuno-oncology therapies leaving them with limited treatment options. M7824 brings together two different biological functions in a single molecule and we have observed encouraging clinical results in treating certain cancer patients, particularly those people with non-small cell lung cancer. I’m excited by the potential impact this first-in-class immunotherapy could have on the lives of cancer patients.”

Dr. Belén Garijo, CEO Healthcare of Merck KGaA, added, “Our bifunctional fusion protein M7824 has the potential to bring new answers to patients living with cancer. Together with GSK we aim to drive a paradigm shift in the treatment of cancer as the leader in this novel class of immunotherapies. GSK clearly emerged as the ideal partner due to their strong commitment to oncology, and the complementary talent and capabilities they will bring to our alliance. We now look forward to harnessing the full potential of M7824 across a broad range of cancer indications as we continue to advance our oncology portfolio.”

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