Deals, Immuno-oncology

Merck’s cancer R&D juggernaut ties up to little Dragonfly’s natural born killer platform — with billions on the line

A little more than a year after Celgene bellied up to the partnership table with $33 million in cash to ally itself with the upstart crew at Dragonfly, Merck has now followed behind in search of what they’re hoping is a game-changing approach to treating solid tumors.

“There’s no company that knows solid tumors more than Merck,” says Dragonfly CEO Bill Haney, who recently jumped into biotech with a pair of new companies looking to make their mark in different fields.

Merck never likes to talk numbers and some of the particulars are in short supply. But this isn’t a small-dollar deal. 

“It’s significantly more attractive economically,” says Haney, compared to Celgene.

Tyler Jacks

Celgene paid $8.3 million upfront per program, Haney tells me, and Merck was inspired to go deeper than that for a multi-program effort. Add it all up, and Merck has agreed to pay up to $695 million per program, all in, including milestones.

The deal marks another big step up for Dragonfly, which has a sterling rep built around its high-profile scientific founders.

There’s Tyler Jacks, an MIT professor, HHMI investigator and director of the David H. Koch Institute for Integrative Cancer Research. Berkeley’s David Raulet, whose background as an expert in NK cells and tumor immunology helped spotlight some of the big ideas Dragonfly is pursuing, clearly played a big role with this deal. Haney, an entrepreneur and filmmaker (working on a documentary about Nobel prize winner Jim Allison) with close contacts to the Cambridge/Boston biotech hub, is at the helm. 

The company’s platform centers on TriNKETs (Tri-specific, NK cell Engager Therapies), a binding mechanism that links natural killer cells to the proteins found on the surface of cancer cells. And that kind of approach, they believe, can create a potent next-gen immunotherapy approach — potentially a big deal for a company like Merck. NK cells have become a popular target in cancer R&D over the last few years as I/O has swelled in importance.

David Raulet

Haney is moving fast after debuting this biotech a little more than a year ago. The CEO tells me that Dragonfly is hard at it, growing its staff from 15 to 35 with more employees to be recruited soon. The group is working on its own pipeline, with plans to be in the clinic next year. And there’s also a clear potential for additional marquee partners to be added — at the right time.

The first order of business now is to do a good job for the partners they have, says Haney, adding that they have walked away from other deals. 

“In the next 6 months we’ll announce additional targets with additional partners,” he says.

Merck, meanwhile, continues to execute on its plans to build a portfolio around the PD-1 star Keytruda, which has been a game changer in cancer treatment. The hundreds of checkpoint studies it’s either handling itself or working on with others has helped shed a light on solid tumors, and Merck’s Roger Perlmutter is well known for his interest in new tech — so long as it fits his budget in R&D.


Image: Bill Haney. DRAGONFLY


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