Incyte antes up $200M — promises billions more — to launch a bispecific development deal with Merus

Reid Huber, Incyte

Reid Huber, Incyte

Incyte is embracing Dutch biotech Merus and its bispecific antibody tech, agreeing to buy into a new discovery and development collaboration that starts with $200 million in an upfront and equity payment and has the potential to earn billions more if it matures into a co-commercialization arrangement.

Already backed by a trio of Big Pharma players — J&J, Pfizer and Novartis — Merus has gained close attention for its own bispecific platform and a lead drug dubbed MCLA-128, which has produced some intriguing data in a Phase I/II trial. Merus has been promising to release interim Phase II data on 128 by the end of this year. And while the data has yet to arrive publicly, an obvious question for now is whether Incyte has already seen more mature data that helped persuade it to pull the trigger on this deal.

Merus is keeping rights to its two clinical-stage efforts, along with MCLA-158, which is near the clinic.

Incyte $INCY and Merus will start work on the preclinical side, with Incyte paying $120 million upfront and adding $80 million for an equity stake in the Dutch biotech. Tackling up to 11 preclinical programs, the two have already decided to split commercialization for one ongoing effort, with Merus keeping US rights. Merus also has buy-in rights to other products with an eye to splitting or sharing US profits.

The milestones on each range up to $350 million, for a total of $2.8 billion. Typically, though, these collaborations rarely ring the bell for achieving the full set of milestones.

Investors, though, cheered on the news by driving a big rally, with shares on Nasdaq $MRUS rocketing up 53%. Merus went public in May, raising about $50 million.

Still, the partnership starts strong and is an impressive achievement for the company.

“By virtue of a unique ability to simultaneously engage multiple protein targets, we believe bispecific antibodies have the potential to play an important role in the future of biotherapeutics,” said Reid Huber, PhD, Incyte’s Chief Scientific Officer. “This collaboration with Merus expands our large molecule discovery capabilities into an innovation-rich area of research, creating additional opportunities for us to deliver on our commitment to improving and extending the lives of patients with cancer and other serious diseases.”

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