Merck Enters Exclusive License Agreement for HRS-5346, an Investigational Oral Lipoprotein(a) Inhibitor, for Cardiovascular Disease from Jiangsu Hengrui Pharmaceuticals Co., Ltd.

Rhea-AI Summary

Merck (NYSE: MRK) has entered into an exclusive license agreement with Jiangsu Hengrui Pharmaceuticals for HRS-5346, an investigational oral Lipoprotein(a) inhibitor for cardiovascular disease. The deal grants Merck exclusive rights to develop, manufacture, and commercialize HRS-5346 worldwide, except in the Greater China region.

Key financial terms include:

• $200 million upfront payment to Hengrui
• Up to $1.77 billion in potential milestone payments
• Royalties on net sales if approved

HRS-5346 is currently in Phase 2 clinical trials in China. The transaction is expected to close in Q2 2025, subject to Hart-Scott-Rodino Antitrust approval. Merck anticipates recording a pre-tax charge of $200 million ($0.06 per share) in both GAAP and non-GAAP results upon closing.

Positive

• Expansion into cardiovascular disease market with potential to reach 20% of global adult population
• Exclusive worldwide rights (excluding Greater China) for promising oral cardiovascular drug
• Strategic addition to cardio-metabolic pipeline

Negative

• $200 million immediate cash outlay impacting earnings
• Significant future payment obligations up to $1.77 billion
• Drug still in early Phase 2 trials with uncertain approval timeline

Insights

Financial Analyst

Merck's exclusive licensing deal for HRS-5346 represents a significant strategic expansion in the cardiovascular disease space with $200 million upfront and potential milestone payments reaching $1.77 billion. The transaction structure is typical for pharma licensing - limiting immediate financial exposure while securing potentially valuable IP.

The $0.06 per share charge is minimal relative to Merck's $238 billion market cap and will have negligible impact on overall financial performance. This backend-loaded deal structure appropriately balances risk for an asset still in Phase 2 development.

The agreement targets elevated Lipoprotein(a), a cardiovascular risk factor affecting approximately 20% of adults globally - translating to hundreds of millions of potential patients. This represents a substantial commercial opportunity if HRS-5346 advances successfully through clinical trials.

Strategically, this acquisition complements Merck's cardiovascular portfolio while providing an oral administration route that could offer competitive advantages over injectable therapies targeting the same pathway. The retention of Greater China rights by Hengrui suggests a balanced negotiation that leverages both companies' regional strengths.

Pharmaceutical R&D Expert

Merck's acquisition of HRS-5346 provides them entry into the emerging Lipoprotein(a) inhibition space through an oral small molecule approach. This differentiates from competing Lp(a)-targeting therapies in development that primarily use RNA-based mechanisms requiring injection.

The oral administration route could significantly impact patient acceptance and adherence if efficacy proves comparable to injectable alternatives. Currently in Phase 2 trials in China, HRS-5346 still faces substantial clinical development hurdles before potential commercialization.

Mechanistically, inhibiting Lp(a) formation addresses a well-established cardiovascular risk factor that remains largely untreated by current standard-of-care therapies. Unlike statins, which don't significantly impact Lp(a) levels, targeted inhibitors could address this residual risk factor.

Merck's global development capabilities will likely accelerate the clinical program, potentially expanding trials to include cardiovascular outcomes endpoints necessary for regulatory approval. The $1.77 billion milestone structure suggests confidence in both technical and commercial feasibility, though investors should recognize that Phase 2 assets typically have 30-40% probability of reaching market. This acquisition wisely expands Merck's cardiometabolic pipeline beyond traditional lipid-lowering approaches.

RAHWAY, N.J.--(BUSINESS WIRE)-- Merck (NYSE: MRK), known as MSD outside of the United States and Canada, and Jiangsu Hengrui Pharmaceuticals Co., Ltd. (“Hengrui Pharma”), a global pharmaceutical company focused on scientific and technological innovation, today announced that the companies have entered into an exclusive license agreement for HRS-5346, an investigational oral small molecule Lipoprotein(a), or Lp(a), inhibitor currently being evaluated in a Phase 2 clinical trial in China.

“Elevated blood concentrations of Lp(a) provides a well-documented risk factor for atherosclerotic cardiovascular disease, affecting as many as 1 in 5 adults globally,” said Dr. Dean Y. Li, president, Merck Research Laboratories. “HRS-5346, an investigational oral small molecule inhibitor of Lp(a) formation, is an important addition that expands and complements our cardio-metabolic pipeline.”

Under the agreement, Hengrui Pharma has granted Merck exclusive rights to develop, manufacture and commercialize HRS-5346 worldwide, excluding Greater China region. Hengrui Pharma will receive an upfront payment of $200 million and is eligible to receive milestone payments associated with certain development, regulatory and commercial milestones up to $1.77 billion, as well as royalties on net sales of HRS-5346, if approved.

“We are pleased to partner with Merck, a global leader in cardiovascular care. We believe Merck’s clinical expertise and global scale will help accelerate the development of HRS-5346 and potentially provide more patients with an additional option to reduce their risk of atherosclerosis,” said Dr. Frank Jiang, Executive Vice President and Chief Strategy Officer of Hengrui Pharma.

Closing of the proposed transaction is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The transaction is expected to close in the second quarter of 2025. Merck expects to record a pre-tax charge of $200 million, or approximately $0.06 per share, to be included in GAAP and non-GAAP results in the quarter the transaction closes.

About Lipoprotein(a)
Produced in the liver, lipoprotein(a), or Lp(a), is a type of lipoprotein that carries cholesterol, fats and proteins in the blood. Lp(a) can accumulate in blood vessel walls, forming atherosclerotic plaques similar to LDL cholesterol. These plaques can limit blood flow to vital organs and result in conditions such as heart attack, stroke and other cardiovascular diseases. Elevated Lp(a) is a genetically determined condition and an independent risk factor for cardiovascular disease. Approximately 1.4 billion people worldwide have elevated levels of Lp(a).

About Hengrui Pharma
Jiangsu Hengrui Pharmaceuticals Co., Ltd. (Hengrui Pharma) is an innovative, global pharmaceutical company dedicated to the research, development and commercialization of high-quality medicines to address unmet clinical needs. With a global R&D team that includes 14 R&D centers and more than 5,500 professionals, Hengrui Pharma’s therapeutic areas of focus include oncology, metabolic and cardiovascular diseases, immunological and respiratory diseases, and neuroscience. To date, Hengrui has commercialized 19 new molecular entity drugs and 4 other innovative drugs in China. Founded in 1970 with the core principle of putting patients first, Hengrui Pharma remains committed to advancing human health by striving to conquer diseases, improve health, and extend lives through the power of science and technology.

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, 2024 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

View source version on businesswire.com: https://www.businesswire.com/news/home/20250325260661/en/

Merck Media Contacts:

Robert Josephson

(203) 914-2372

Justine Moore

(347) 281-3754

Hengrui Media Contacts:

Simona Kormanikova

(332) 220-2797

Camilla White

(332) 345-8318

Merck Investor Contacts:

Peter Dannenbaum

(732) 594-1579

Steven Graziano

(732) 594-1583

Source: Merck & Co., Inc.

FAQ

What is the potential market size for Merck's (MRK) new Lipoprotein(a) inhibitor HRS-5346?

The drug targets elevated Lp(a), which affects approximately 1 in 5 adults globally as a risk factor for atherosclerotic cardiovascular disease.

How much is Merck (MRK) paying for the HRS-5346 license agreement?

Merck is paying $200 million upfront plus potential milestone payments up to $1.77 billion and royalties on net sales.

What is the current development stage of HRS-5346 licensed by Merck (MRK)?

HRS-5346 is currently in Phase 2 clinical trials in China.

When will Merck's (MRK) acquisition of HRS-5346 rights be completed?

The transaction is expected to close in the second quarter of 2025, pending regulatory approvals.

What is the financial impact of the HRS-5346 deal on Merck's (MRK) earnings?

Merck expects a pre-tax charge of $200 million, or approximately $0.06 per share, in both GAAP and non-GAAP results.