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(Alliance News) - IP Group PLC on Thursday said its portfolio company Artios Pharma Ltd has penned a three-year oncology drug development partnership with Germany's Merck KGaA.
Under the terms of the deal, Artios will receive USD30 million through upfront or near term payments from Merck.
The DNA damage response may be eligible for a further USD860 million per milestone it nets as part of the agreement. Artios on Thursday explained the duo will develop compounds on up to eight oncology drug targets.
On top of this, Artios may also receive "double-digit royalty payments on net sales" of each product by Merck.
IP Group has just shy of a 12% stake in Artios, which on June 30 was valued at GBP11.0 million.
IP added: "The directors anticipate that the group's assessment of the value of its holding in Artios may increase by GBP5 million to GBP15 million as a result of the collaboration and will finalise this during the group's 2020 annual results valuation process.
"Under the terms of the agreement, the companies will leverage Artios's proprietary nuclease targeting discovery platform to jointly identify multiple synthetic lethal targets for precision oncology drug candidates."
IP Group shares were 0.9% higher at 91.64 pence each in London on Thursday morning. Merck's stock was up 1.3% at EUR136.95 each in Frankfurt.
By Eric Cunha; ericcunha@alliancenews.com
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