UPDATED: Merck KGaA forges a $941M CAR-T development deal with Intrexon

Four months after Pfizer ($PFE) stepped up with a $2.85 billion promise to partner with Merck KGaA on a preclinical PD-L1 oncology effort, the German pharma company has turned around to partner with Intrexon on an upstart CAR-T cancer drug development project.

Merck Serono, the German company's drug R&D arm, is handing over a $115 million upfront payment along with a commitment of up to $826 million more in milestones for the first two programs. In exchange, Merck Serono gets its hands on Intrexon's CAR-T tech, a significant part of which was recently in-licensed from the University of Texas MD Anderson Cancer Center.

Shares of Intexon ($XON), which has a market cap of close to $5 billion, shot up 9% this morning.

CAR-T has been taking the biopharma industry by storm after pioneers like Juno Therapeutics, Kite and Novartis demonstrated that engineering T cells to mount an antigen-specific attack on cancer could offer a major new advance for patients. Since then there have been a blizzard of tech deals as companies look to stake out a piece of expensive market terrain and latch on to new technologies. Collaborations like this one have been at the center of the action.

Intrexon, founded by billionaire Randal Kirk, and Ziopharm struck a $100 million deal with MD Anderson back in January that gave the companies access to what's been called "Sleeping Beauty," a nonviral gene transfer approach that may offer an improved safety profile to the leading therapies in the clinic.

In the pact, which MD Anderson President Ron DePinho described as one of its "most substantial" efforts to date, the biotechs landed technology developed at the labs of Laurence Cooper, a professor of pediatrics at MD Anderson, and Perry Hackett, a professor within the College of Biological Sciences at Minnesota. Intrexon and Ziopharm each paid $50 million in stock, and committed $15 million to $20 million more for each year in the 3-year agreement to support their combined development effort.

Using their combined technologies, DePinho says that the group can develop personalized T cells that attack cancer, adapting a patient's cells with chimeric antigen receptors, as well as off-the-shelf therapies that could be used by all patients. That next-gen approach has also been pursued by Cellectis, which recently completed an IPO on Nasdaq.

For the biotech, adding Merck KGaA to its list of unorthodox collaborators offers a high-profile endorsement for what it's trying to do. Serono has been spotlighting its oncology R&D effort after setbacks in multiple sclerosis and other arenas, such as cancer vaccines, focused another rethink at a company that has been undergoing a series of internal reorganizations. Its deal with Pfizer, which included a record-setting $850 million upfront, helped illustrate the high premiums associated with all promising new cancer technologies.

Merck KGaA's Belén Garijo

"The collaboration with Intrexon underlies Merck Serono's focus on innovation, and enhances its R&D technology portfolio in immuno-oncology," says Belen Garijo, CEO of Merck Serono, in a statement. "Moreover, it showcases Merck Serono's commitment to developing therapies that have the potential to significantly evolve the way cancer is treated." She went on to highlight Intrexon's cell engineering techniques and the RheoSwitch platform in overcoming "the current challenges of CAR-T therapy."

- here's the release