Merck makes a $9.3B bet on Kelun-Biotech ADCs

Dec. 22, 2022

Merck & Co (MSD) and China-based Kelun-Biotech have entered into an exclusive license and collaboration agreement to develop seven investigational preclinical antibody-drug conjugates for the treatment of cancer — a deal that could reach $9.3 billion.

Under the agreement, Kelun-Biotech (a holding subsidiary of Sichuan Kelun Pharmaceutical) has granted Merck exclusive global licenses to research, develop, manufacture and commercialize multiple investigational preclinical ADC therapies and exclusive options to obtain additional licenses to ADC candidates. Kelun retains the right to research, develop, manufacture and commercialize certain licensed and option ADCs for mainland China, Hong Kong and Macau.

Merck will hand Kelun an upfront payment of $175 million. The biotech is also eligible to receive future milestone payments totaling up to $9.3 billion, if Kelun does not retain mainland China, Hong Kong and Macau rights for the option ADCs and all candidates achieve regulatory approval, plus tiered royalties on net sales for any commercialized ADC product.

The partners had already inked two other ADC deals this year. Back in May, Merck paid $47 million upfront for ex-China rights to Kelun's investigational TROP2 targeting ADC. Then, in July Merck signed a second licensing agreement with Kelun to develop an investigational ADC for the treatment of solid tumors