Daiichi Sankyo and Merck Enter into Global Development and Commercialization Agreement for MK-6070

Rhea-AI Summary

Daiichi Sankyo (TSE: 4568) and Merck (NYSE: MRK) have expanded their global collaboration to include MK-6070, an investigational DLL3-targeting T-cell engager. The companies will jointly develop and commercialize MK-6070 worldwide, except in Japan where Merck retains exclusive rights. This agreement builds on their existing partnership for three DXd antibody drug conjugates.

MK-6070 targets DLL3, highly expressed in small cell lung cancer (SCLC) and neuroendocrine tumors. The companies plan to evaluate MK-6070 in combination with ifinatamab deruxtecan (I-DXd) for SCLC patients. Merck will receive a $170 million upfront payment, and the companies will share R&D costs, commercialization expenses, and profits globally, except in Japan.

Positive

• Expansion of existing collaboration between Daiichi Sankyo and Merck, potentially strengthening their oncology pipeline
• Joint development and commercialization of MK-6070, a promising T-cell engager for small cell lung cancer
• Potential synergies with existing antibody drug conjugate collaboration, particularly ifinatamab deruxtecan
• Shared R&D costs and profits, potentially reducing financial burden and risk for both companies

Negative

• Upfront cash payment of $170 million from Daiichi Sankyo to Merck, impacting short-term financials
• Shared profits worldwide (except Japan) may limit potential revenue for Merck compared to exclusive rights

Insights

Financial Analyst

This collaboration between Daiichi Sankyo and Merck represents a significant strategic move in the oncology space, particularly for small cell lung cancer (SCLC) treatment. The $170 million upfront payment from Merck indicates a strong commitment to the potential of MK-6070. This deal structure, with shared R&D costs and profits, mitigates financial risks for both companies while potentially accelerating the drug's development.

The agreement's financial implications extend beyond the upfront payment. The shared commercialization rights globally (except Japan) could lead to substantial revenue streams if MK-6070 proves successful, especially given the high unmet need in SCLC. However, investors should note that drug development, particularly in oncology, carries significant risks and long development timelines.

Oncology Expert

The collaboration on MK-6070, a DLL3-targeting T-cell engager, is a promising development for SCLC patients. DLL3 is highly expressed in SCLC and neuroendocrine tumors, making it an attractive target. The planned combination with ifinatamab deruxtecan (I-DXd) represents an innovative two-pronged approach that could potentially improve outcomes in this aggressive cancer type.

This strategy aligns with the trend towards combination therapies in oncology, which often show improved efficacy over monotherapies. The focus on SCLC is particularly noteworthy, as it's an area with treatment options and poor prognosis. If successful, this approach could significantly impact the standard of care for SCLC patients.

Market Research Analyst

This agreement strengthens both companies' positions in the competitive oncology market. For Daiichi Sankyo, it expands their pipeline beyond antibody-drug conjugates, diversifying their oncology portfolio. For Merck, it leverages their recent acquisition of Harpoon Therapeutics, potentially accelerating the development and commercialization of MK-6070.

The global SCLC market is projected to grow significantly in the coming years, driven by increasing incidence and demand for novel therapies. This collaboration positions both companies to potentially capture a significant share of this market. However, success will depend on clinical trial outcomes and the competitive landscape, which includes other emerging therapies targeting SCLC.

• Agreement builds on and complements Daiichi Sankyo and Merck’s shared commitment to develop novel medicines for patients with cancer
• Daiichi Sankyo and Merck to co-develop and co-commercialize MK-6070, an investigational delta-like ligand 3 (DLL3) targeting T-cell engager, worldwide except for Japan where Merck retains exclusive rights

BASKING RIDGE, N.J. & RAHWAY, N.J.--(BUSINESS WIRE)-- Daiichi Sankyo (TSE: 4568) and Merck (NYSE: MRK), known as MSD outside of the United States and Canada, have expanded their existing global co-development and co-commercialization agreement for three investigational DXd antibody drug conjugates to include Merck’s MK-6070, an investigational delta-like ligand 3 (DLL3) targeting T-cell engager. The companies will jointly develop and commercialize MK-6070 worldwide, except in Japan where Merck will maintain exclusive rights. Merck will be solely responsible for manufacturing and supply for MK-6070.

MK-6070 is a T-cell engager targeting DLL3, an inhibitory canonical Notch ligand that is expressed at high levels in small cell lung cancer (SCLC) and neuroendocrine tumors, currently being evaluated in a phase 1/2 clinical trial. The companies are planning to evaluate MK-6070 in combination with ifinatamab deruxtecan (I-DXd) in certain patients with SCLC, as well as other potential combinations. Merck obtained MK-6070 through its acquisition of Harpoon Therapeutics.

“Expanding our oncology pipeline with a DLL3 T-cell engager further supports Daiichi Sankyo’s strategy to create new standards of care for patients with cancer worldwide,” said Ken Takeshita, MD, Global Head, R&D, Daiichi Sankyo. “We look forward to continuing our relationship with Merck with the addition of MK-6070 as it provides potential synergies with our established antibody drug conjugate collaboration, particularly ifinatamab deruxtecan, and demonstrates our shared commitment to advancing new medicines for patients.”

“Small cell lung cancer is an aggressive, fast-growing form of lung cancer and new treatment approaches are urgently needed,” said Dean Y. Li, MD, PhD, President, Merck Research Laboratories. “We are pleased to build upon our collaboration with Daiichi Sankyo and look forward to evaluating the combination of MK-6070 and ifinatamab deruxtecan as a novel two-pronged approach targeting the underlying biology of small cell lung cancer along with other forms of cancer.”

Financial Highlights
Under the terms of the agreement, Merck will receive an upfront cash payment of $170 million and has also satisfied a contingent quid obligation from the original collaboration agreement. The companies will share R&D and commercialization expenses as well as profits worldwide, except for Japan where Merck retains exclusive rights and Daiichi Sankyo receives a royalty based on sales. R&D expenses related to MK-6070 in combination with ifinatamab deruxtecan will be shared in a manner consistent with the original agreement for ifinatamab deruxtecan. Merck will generally record sales for MK-6070 worldwide.

About DLL3
Delta-like ligand 3 (DLL3), a Notch inhibitory ligand, is highly expressed on SCLC and other neuroendocrine tumors such as melanoma, small cell bladder cancer and metastatic castration resistant prostate cancer and is minimally expressed in normal tissues.¹ DLL3 is a promising therapeutic target where multiple treatment approaches are being explored.^{1, 2}

About MK-6070
MK-6070 is an investigational DLL3 directed tri-specific T-cell engager currently being evaluated in a phase 1/2 clinical trial as a monotherapy in certain patients with advanced cancers associated with expression of DLL3 and in combination with atezolizumab in certain patients with SCLC. The U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation to MK-6070 for the treatment of SCLC in March 2022.

About the Daiichi Sankyo and Merck Collaboration
Daiichi Sankyo and Merck (known as MSD outside of the United States and Canada) entered into a global collaboration in October 2023 to jointly develop and commercialize patritumab deruxtecan (HER3-DXd), ifinatamab deruxtecan (I-DXd) and raludotatug deruxtecan (R-DXd), except in Japan where Daiichi Sankyo will maintain exclusive rights. Daiichi Sankyo is solely responsible for manufacturing and supply.

About Daiichi Sankyo
Daiichi Sankyo is an innovative global healthcare company contributing to the sustainable development of society that discovers, develops and delivers new standards of care to enrich the quality of life around the world. With more than 120 years of experience, Daiichi Sankyo leverages its world-class science and technology to create new modalities and innovative medicines for people with cancer, cardiovascular and other diseases with high unmet medical needs. For more information, please visit www.daiichisankyo.com.

Merck’s Focus on Cancer
Every day, we follow the science as we work to discover innovations that can help patients, no matter what stage of cancer they have. As a leading oncology company, we are pursuing research where scientific opportunity and medical need converge, underpinned by our diverse pipeline of more than 25 novel mechanisms. With one of the largest clinical development programs across more than 30 tumor types, we strive to advance breakthrough science that will shape the future of oncology. By addressing barriers to clinical trial participation, screening and treatment, we work with urgency to reduce disparities and help ensure patients have access to high-quality cancer care. Our unwavering commitment is what will bring us closer to our goal of bringing life to more patients with cancer. For more information, visit https://www.merck.com/research/oncology/.

About Merck
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter), Facebook, Instagram, YouTube and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

References:
¹ Owen D, et al. Journal of Hematology & Oncology. 2019; 12,61
² Rudin C, et al. Journal of Hematology & Oncology. 2023; 16,66

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Daiichi Sankyo

Media Contacts:

Global/US Media:

Jennifer Brennan

Daiichi Sankyo, Inc.

jennifer.brennan@daiichisankyo.com

(908) 900-3183

Japan Media:

DS-PR@daiichisankyo.co.jp

Investor Relations Contact:

DaiichiSankyoIR@daiichisankyo.co.jp

Merck

Media:

Robert Josephson

Robert.josephson@merck.com

(203) 914-2372

Investors:

Peter Dannenbaum

peter.dannenbaum@merck.com

(732) 594-1579

Source: Daiichi Sankyo

FAQ

What is the focus of the new agreement between Daiichi Sankyo and Merck (MRK)?

The new agreement focuses on the joint development and commercialization of MK-6070, an investigational DLL3-targeting T-cell engager, for potential treatment of small cell lung cancer and neuroendocrine tumors.

How much is the upfront payment Merck (MRK) will receive in this agreement?

Merck will receive an upfront cash payment of $170 million from Daiichi Sankyo as part of this agreement.

What are the potential applications of MK-6070 being developed by Merck (MRK) and Daiichi Sankyo?

MK-6070 is being evaluated for small cell lung cancer (SCLC) and neuroendocrine tumors. The companies plan to study it in combination with ifinatamab deruxtecan (I-DXd) for certain SCLC patients.

How will Merck (MRK) and Daiichi Sankyo share the costs and profits for MK-6070?

The companies will share R&D and commercialization expenses as well as profits worldwide, except for Japan where Merck retains exclusive rights and Daiichi Sankyo receives a royalty based on sales.