Merck & Co. began Tuesday with back-to-back deals, revealing separate agreements to pay $150 million upfront for full control of an early-phase asset and pocket $700 million to support an expansive pivotal oncology push.
The influx of cash comes from Blackstone Life Sciences, which has agreed to fund a portion of the cost of developing sacituzumab tirumotecan (sac-TMT) throughout 2026. Merck recently started its 15th global phase 3 trial of the antibody-drug conjugate (ADC). That broad bet reflects a belief that the TROP2-directed ADC can become a “workhorse” for Merck as it prepares for the arrival of biosimilar Keytruda copies, Marjorie Green, M.D., Merck’s senior vice president and head of oncology global clinical development, recently told Fierce Pharma.
Teaming up with Blackstone allows Merck to share the burden of validating sac-TMT in a wide range of settings. In exchange, the drugmaker 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, provided the ADC wins FDA approval in first-line triple-negative-breast cancer (TNBC) based on findings of the TroFuse-011 trial.
Merck secured ex-China rights to sac-TMT from Kelun-Biotech for $47 million upfront and up to $1.4 billion in milestones in 2022. The agreement gave Merck a rival to Gilead Sciences' Trodelvy and AstraZeneca and Daiichi Sankyo’s Datroway, TROP2-directed ADCs that are approved in the U.S. The rivalry between Trodelvy and Datroway is set to expand to the first-line TNBC market referenced in Merck’s deal with Blackstone.
The Blackstone deal gives some idea of how big a bet Merck is making on sac-TMT—and the opportunity that awaits the ADC if it lives up to the company’s expectations. Merck said the $700 million will only fund a portion of its sac-TMT development costs. At a 4% royalty rate, total sac-TMT sales would need to reach $17.5 billion before Blackstone’s returns exceeded its $700 million upfront outlay.
Another deal unveiled Tuesday showed one way Blackstone could accelerate the timeline for making a return on its investment. Royalty Pharma has paid funds managed by Blackstone $310 million for royalty interest in Alnylam’s Amvuttra. Blackstone secured the interest in 2020 by committing up to $150 million to support a phase 3 trial of Amvuttra, much like it is now doing for Merck’s sac-TMT.
Five minutes before disclosing the Blackstone agreement, Merck revealed that it has struck a deal with Dr. Falk Pharma for MK-8690. Merck acquired the anti-CD30 antibody in 2023 in its $10.8 billion takeover of Prometheus Biosciences, a deal that primarily focused on the anti-TL1A candidate PRA023. In 2020, Prometheus accepted a “low seven figures” upfront payment from Falk to form a co-development pact.
The outlay, plus R&D funding and other commitments, secured Falk rights to the candidate in Europe, Australia and New Zealand. Merck has retaken control by offering Falk $150 million upfront to end the collaboration. Falk is eligible to receive a payment associated with a development milestone and royalties on sales in certain territories.
Merck’s outlay represents a show of confidence in a candidate that has largely flown under the radar to date. Dean Li, M.D., Ph.D., president of Merck Research Laboratories, commented on the CD30 program at a Goldman Sachs event in June 2024, telling attendees to expect more details “in the next year or so.” The forecast was tied to a phase 2 program that, based on information on ClinicalTrials.gov, is yet to get underway.