Blackstone Invests $700M in Merck's Antibody-Drug Conjugate Program

In a significant move within the pharmaceutical industry, Blackstone Life Sciences has announced a $700 million investment in Merck & Co.'s antibody-drug conjugate (ADC) program. This deal, revealed on Tuesday, marks a substantial commitment to the burgeoning field of ADCs and underscores the growing interest in targeted cancer therapies.

Merck's Strategic ADC Development

Merck's experimental drug, sacituzumab tirumotecan (sac-TMT), is at the center of this agreement. The ADC targets TROP2, a protein expressed in multiple cancers, including breast, endometrial, and lung tumors. This puts sac-TMT in direct competition with approved medicines from AstraZeneca and Gilead Sciences, namely Datroway and Trodelvy.

The investment from Blackstone will cover a portion of sac-TMT's development costs for the current year. In return, Blackstone stands to receive low- to mid-single digit royalties on net sales across all approved indications. This arrangement allows Merck to mitigate some of the financial risks associated with late-stage drug development while potentially accelerating the program's progress.

Caroline Litchfield, Merck's chief financial officer, emphasized the strategic importance of the deal, stating, "This agreement positions Merck to harness the potential of sac-TMT, a promising ADC candidate targeting TROP2, while we continue to advance our broad and expansive pipeline."

Blackstone's Expanding Life Sciences Portfolio

The investment in Merck's ADC program is part of Blackstone's growing presence in the biotech sector. Over recent years, the firm has backed multiple startups and supported drug research from public companies, often securing future royalties in the process.

Coinciding with the Merck announcement, Blackstone revealed the sale of a 1% royalty stream on Alnylam Pharmaceuticals' rare disease drug Amvuttra to Royalty Pharma for $310 million. This royalty was originally acquired through a 2020 collaboration with Alnylam, demonstrating Blackstone's strategic approach to life sciences investments.

The Rise of Antibody-Drug Conjugates

ADCs have become a hot spot in drug research, combining the targeting precision of antibodies with the potent effects of cytotoxic agents. These therapies aim to deliver a precise attack on tumors while minimizing damage to surrounding healthy tissue.

Merck's involvement in the ADC field extends beyond the sac-TMT program, with the company having engaged in several high-profile alliances, including a partnership with China's Kelun Biotech. This focus on ADCs is part of Merck's broader strategy to develop new cancer medicines that could offset potential revenue losses when its top-selling immunotherapy, Keytruda, faces patent expiration later this decade.