Blackstone Life Sciences will pay Merck & Co. $700 million for a piece of future sales tied to an antibody-drug conjugate the pharmaceutical company has brought into late-stage testing.
Under terms of a deal announced Tuesday, Blackstone is covering a portion of the development costs this year for an experimental drug called sacituzumab tirumotecan. In return, Blackstone is eligible to receive low- to mid-single digit royalties on net sales of sac-TMT across all approved indications.
Antibody drug conjugates, or ADCs, link toxic chemicals to a targeting molecule, which is supposed to deliver a precise attack to tumors while sparing surrounding healthy tissue. The field has become a hot spot of drug research in recent years, and one Merck has dug into through a few high-profile alliances. One of those deals was a partnership with China’s Kelun Biotech, which included the drug now known as sac-TMT.
Sac-TMT targets the protein “TROP2,” which is expressed in multiple cancers. That protein is also the target of Trodelvy and Datroway, two drugs from Gilead Sciences and an AstraZeneca-Daiichi Sankyo partnership, respectively, that are approved for certain breast cancers.
Merck is testing sac-TMT across a variety of different cancers, including breast, endometrial and lung tumors. The treatment is part of a broader effort by the company to unearth new cancer medicines that could offset the loss of revenue when its top-selling immunotherapy, Keytruda, loses patent protection later this decade.
“This agreement positions Merck to harness the potential of sac-TMT, a promising ADC candidate targeting TROP2, while we continue to advance our broad and expansive pipeline,” said Caroline Litchfield, Merck’s chief financial officer, in a statement.
The deal also adds to a growing presence in biotech by Blackstone’s life sciences group. Through a series of transactions over the last several years, the firm has backed multiple startups and supported the drug research from public companies, in some cases gaining future royalties.
Blackstone earned a payout from one of those deals on Tuesday, announcing separately that it sold a 1% royalty stream on Alnylam Pharmaceuticals’ rare disease drug Amvuttra to Royalty Pharma for $310 million. Blackstone acquired that royalty through a 2020 collaboration with Alnylam.
