Dive Brief:
- Antibody drug specialist Genmab on Monday agreed to acquire Dutch biotechnology company Merus in an $8 billion deal centered around a drug that’s shown potential treating head and neck cancer.
- Per deal terms, Genmab will pay $97 per share in cash to acquire Merus, representing a 41% premium to the biotech's closing price on Friday of about $68.
- The deal hands Genmab a drug called petosemtamab and that’s in late-stage testing for head and neck cancer. Phase 2 data presented at the American Society of Clinical Oncology meeting in May showed that the drug helped extend survival when used alongside Merck & Co.’s immunotherapy Keytruda, a result that boosted shares and suggested it could change care for those tumors.
Dive Insight:
Merus had already seen its share value jump by more than 50% since late May, when its ASCO presentation showed that petosemtamab kept nearly 80% of study participants with advanced head and neck squamous cell carcinoma alive for at least a year.
The results positioned Merus’ drug, a type of bispecific antibody targeting the proteins EGFR and LGR5, to be a “market leader in the multi-blockbuster head-and-neck cancer treatment landscape,” William Blair analyst Matt Phipps wrote in a research note on Monday.
Genmab is gambling on that outcome. While Merus’ drug showed potential in Phase 2, those findings will need to be duplicated in a late-stage study comparing a petosemtamab-Keytruda combination to Keytruda alone. Results are expected in 2026. Genmab said Monday that the drug could eventually book $1 billion in yearly sales by 2029 and have multibillion-dollar annual sales potential afterwards. Phipps is projecting $3 billion to $4 billion in annual peak sales in head and neck cancer alone.
Petosemtamab “has the potential to be a transformational therapy for patients living with head and neck cancer,” said Genmab CEO Jan van de Winkel, adding that the drug could provide “durable growth ... well into the next decade.”
The drug is also being evaluated for colorectal cancer. Phase 2 results had been expected shortly, leading some investors to question the timing of the deal, Phipps wrote Monday.
The asset adds to a large portfolio of antibody drugs for Genmab, which codeveloped the multiple myeloma therapy Darzalex with Johnson & Johnson, the cervical cancer medicine Tivdak with Seagen and the lymphoma drug Epkinly with AbbVie.
The company has recently started turning to deals to boost its pipeline. Last year, it paid $1.8 billion to acquire antibody-drug conjugate developer ProfoundBio.
