Merck KGaA, Caris Sign Potential $1.4B Deal to Develop First-in-Class ADCs for Cancer

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Merck KGaA has inked a potential $1.4 billion deal with Texas-based Caris Life Sciences for the discovery and development of first-in-class antibody-drug conjugate candidates for cancer patients, the companies announced.

Under the multi-year partnership, Merck KGaA will provide an undisclosed upfront payment to Caris along with research funding. Merck KGaA will also be responsible for the preclinical and clinical research of the discovered targets and the eventual development and commercialization work.

Caris, an artificial intelligence and precision medicines company, will be eligible to receive discovery, development, regulatory and sales-based milestone payments totaling $1.4 billion and tiered royalties. In return, Merck KGaA secures the exclusive global license to develop, manufacture and eventually commercialize the antibody-drug conjugates (ADCs).

“This partnership adds to our portfolio of external pipeline programs and is a strong validation of our highly differentiated, orthogonal multi-omics approach to discovering truly novel targets that may be harnessed to eradicate tumors,” Caris Chief Business Officer Brian Lamon said in a statement.

For the discovery process, Caris plans to combine AI and machine learning along with a patient tissue repository and its research laboratory to find new cancer targets.

“Through close collaboration with Caris, utilizing their unique discovery platform, we complement our internal ADC capabilities to develop novel first-in-class ADCs and ultimately strengthen our potential to expand our oncology portfolio,” Paul Lyne, the global head of research unit oncology for the healthcare business sector of Merck KGaA, said in a statement.

Merck KGaA has formed discovery deals in the ADC space before. In 2022, the company paid $30 million upfront, and potentially $800 million in milestone payments, to Mersana Therapeutics to find two new ADC targets.

Caris has also partnered recently with other companies including a multi-year partnership with Moderna last year to help support the development of its oncology pipeline. In 2023, Caris also established a collaboration with Incyte to help boost precision medicine methods for Incyte’s oncology research.

Merck KGaA’s deal with Caris is the latest in the hot ADC market this week. Genmab announced Wednesday that it will buy the Danish biotech ProfoundBio for $1.8 billion in cash. The acquisition will give Genmab access to the biotech’s ADC candidates, which are expected to provide Phase I results in 2024 and 2025.

In related news, French pharma Ipsen added the first ADC to its pipeline on Tuesday via a $900 million deal with Sutro Biopharma, gaining the rights to the preclinical STRO-003 ADC candidate to target solid tumors.

Market intelligence company Evaluate in a February 2024 report concluded that the ADC market is the “hottest real estate in oncology” and will continue to see investment from large pharma companies reaching a market value of over $30 billion by 2028.