Merck hands Sutro $60M to start on immunomodulatory drug discovery; Eli Lilly spinning out animal health group

→ Drugs that can tune the human immune system are all the rage these days, especially at Big Pharma R&D groups like Merck’s. And today the pharma giant is spotlighting a deal to develop more of these drugs with the help of Sutro BioPharma in South San Francisco. 

Merck is paying Sutro $60 million upfront to get started on the discovery deal, looking for immunomodulatory drugs that can work on cancer or autoimmune diseases — either tapping the gas or the brakes on an immune response. The deal includes a hefty $1.6 billion in milestones to keep things going.

Sutro gets to handle the preclinical work in the deal, with the giant Merck taking the best drugs into the clinic with worldwide rights.

Eli Lilly will spin out its animal health unit Elanco, selling a minority interest in an IPO and then divesting the rest in what it calls a “tax-efficient transaction.”

→ The FDA has handed Apellis Pharmaceuticals $APLS a fast track designation for its advanced dry AMD drug called APL-2. The med is a novel inhibitor of complement factor C3 meant to treat patients with geographic atrophy, an advanced form of age-related macular degeneration, as a monotherapy. Apellis plans to start a Phase III trial of the drug later this year, it said in a statement.

→ China’s Viva Biotech Holdings has applied for an IPO in Hong Kong to both fund their pursuit of promising upstarts and boost their manufacturing capabilities. The Shanghai-based company is half incubator and half drug discovery business, offering both “equity for service” and “cash for service” models to biopharmas looking for outsourcing services. Its portfolio currently includes 21 biotech startups.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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