New Immuno-Onco Deal With Merck KGaA Could Make This UK Biotech a $1 Billion Company

June 5, 2017
By Alex Keown, BioSpace.com Breaking News Staff

DARMSTADT, Germany – A little more than one month after Bristol-Myers Squibb passed on acquiring an F-star Alpha asset, Merck KgaA stepped in to strike a deal worth up to €1 billion for five bispecific immuno-oncology antibodies.

Merck said the deal will strengthen the company’s immuno-oncology pipeline. In addition to the five antibodies, Merck will also have the right to replace, or add to the number of antibodies it is exploring as part of the collaboration through F-star's bispecific antibody platform.

The antibodies Merck is acquiring includes F-star's preclinical lead asset FS118, which is designed to block LAG-3 (Lymphocyte-Activation Gene 3) and PD-L1 (Programmed Death-Ligand 1), two pathways commonly used by cancer cells to evade the immune system. Additionally, the German company will acquire the rights to four additional bispecific antibodies of the company’s choosing. These bispecific antibodies target specific pathways to augment the anti-tumor immune response.

Luciano Rosetti, Merck’s head of global research and development, said the collaboration will allow the company to grow its portfolio of bispecific immunotherapies, as well as complements the company’s “internal capabilities” in immuno-oncology.

Merck’s pipeline already includes a bifunctional antibody in its pipeline, M7824, which is in Phase I development. M7824 is believed to combine two mechanisms in one molecule to fight cancer by blocking the PD-L1 and TGF-ß pathways, the company said this morning. Merck, under its EMD Serono subsidiary, and F-star have been working together since 2011 to develop monospecific and bispecific antibody-derived candidates targeting inflammatory diseases, Genegnews reported.

Under terms of the deal, Merck will pay F-star €115 million in upfront money, as well as R&D funding and milestone payments over the next two years. Merck may make further payments to F-star if the company options additional work that could include subsequent milestone payments.

John Haurum, F-star’s chief executive officer, said the deal with Merck is validation of the company’s bispecific antibody platform.

"Our vision is to transform the treatment of cancer. This is the objective of partnering our lead asset FS118 and other next-generation immuno-oncology compounds with Merck KGaA…,” Haurum said in a statement.

In April, BMS walked away from an option to acquire F-star. At the time F-star issued a statement that the BMS decision was made “due to a prioritization of opportunities across its oncology portfolio.” The two companies had been working to develop F-star’s asset, FS102 a novel Phase 1 ready Human Epidermal growth factor Receptor 2 (HER2)-targeted therapy in development for the treatment of breast and gastric cancer among a well-defined population of HER2-positive patients who do not respond or become resistant to current therapies.