Merck strikes 2nd ADC deal with Kelun-Biotech, paying $35M for rights to unnamed asset

Merck & Co. has struck an antibody-drug conjugate (ADC) deal—but not the one everyone is waiting for. With reports swirling about a potentially imminent $40 billion Seagen buyout, the Big Pharma has put up $35 million to secure exclusive rights to a second candidate in development at its partner Kelun-Biotech.

In recent years, Merck has built out its ADC capabilities, paying $2.75 billion to buy VelosBio in 2020, teaming up with Starpharma to evaluate technology in 2021 and stumping up $47 million for ex-China rights to a TROP2 ADC that is in phase 3 development at Kelun-Biotech. Along the way, Merck has formed tight ties to Seagen, paying $1.6 billion to jointly develop a LIV-1 candidate in a possible precursor to a rumored buyout.

With the biopharma world waiting on confirmation of the deal, China’s Kelun-Biotech has put out news of a second deal with Merck. As was the case when the biotech disclosed the first deal, details are scarce at this stage. Merck has secured global rights to an investigational ADC for $35 million upfront and up to $901 million in milestones. The partners will collaborate on early clinical development.

Kelun-Biotech, a subsidiary of Sichuan Kelun Pharmaceutical, is yet to share details of the ADC candidate picked up by Merck. The biotech is working on 10 ADC programs, three of which are in its clinical-phase pipeline. The three publicly known programs target HER2, TROP2 and CLDN 18.2.

Having initially kept the identity of the first ADC licensed by Merck under wraps, Kelun-Biotech has now revealed the deal covered the TROP2 candidate. Picking up TROP2 prospect SKB-264, which is in phase 3 development in breast cancer, positions Merck to challenge Gilead Sciences and AstraZeneca. The revelation that SKB-264 is the subject of the first deal also narrows the list of candidates for the second agreement.

Kelun-Biotech recently shared phase 1 data on the HER2 candidate, A166. The asset is now in a pivotal phase 2 clinical trial in China. Kelun-Biotech’s third disclosed ADC candidate, SKB315, targets CLDN 18.2 to deliver a topoisomerase I inhibitor and is in phase 1 in China.