Merck's Strategic Moves: $700M Blackstone Deal and $150M Asset Acquisition

Merck & Co. has made significant strides in the pharmaceutical industry with two major deals announced on Tuesday. The company has secured $700 million in funding from Blackstone Life Sciences to support its oncology program while also spending $150 million to regain full control of an early-phase asset.

Blackstone Funding Boosts Oncology Push

Merck has entered into an agreement with Blackstone Life Sciences, which will provide $700 million to fund a portion of the development costs for sacituzumab tirumotecan (sac-TMT) through 2026. This antibody-drug conjugate (ADC) is a TROP2-directed therapy that Merck believes could become a "workhorse" in its oncology portfolio.

The company has recently initiated its 15th global phase 3 trial for sac-TMT, demonstrating a significant commitment to the drug's development. In exchange for the funding, Merck has agreed to pay Blackstone low- to mid-single-digit royalties on net sales of sac-TMT across all approved indications in its marketing territories, contingent on FDA approval in first-line triple-negative breast cancer (TNBC) based on the TroFuse-011 trial results.

Merck acquired the ex-China rights to sac-TMT from Kelun-Biotech in 2022 for $47 million upfront and up to $1.4 billion in milestones. This acquisition positioned Merck to compete with Gilead Sciences' Trodelvy and AstraZeneca and Daiichi Sankyo's Datroway in the TROP2-directed ADC market.

Strategic Asset Reacquisition

In a separate deal, Merck has paid $150 million upfront to Dr. Falk Pharma to end their collaboration and regain full control of MK-8690, an anti-CD30 antibody. Merck initially acquired this asset through its $10.8 billion takeover of Prometheus Biosciences in 2023.

The original agreement between Prometheus and Falk, formed in 2020, granted Falk rights to the candidate in Europe, Australia, and New Zealand for a "low seven figures" upfront payment. With this new deal, Merck has consolidated its control over the asset, although Falk remains eligible for a development milestone payment and royalties on sales in certain territories.

Dean Li, M.D., Ph.D., president of Merck Research Laboratories, has indicated that more details about the CD30 program are expected to be revealed in the coming year, with a phase 2 program anticipated to begin soon.

These strategic moves by Merck underscore the company's commitment to expanding its oncology pipeline and maintaining control over promising assets. The substantial investment from Blackstone and the reacquisition of full rights to MK-8690 demonstrate Merck's confidence in the potential of these therapies to address significant unmet needs in cancer treatment.