LONDON (Alliance News) - GlaxoSmithKline PLC on Tuesday said it will pay out up to EUR3.7 billion to German drug firm Merck KGaA as part of a new immuno-oncology global strategic alliance.
Pharma majors Glaxo and Merck will jointly develop and commercialise Merck's M7824 cancer treatment. By blocking two key pathways, M7824 allows the body's own immune system to detect and destroy cancer cells and it is currently in development as a treatment for multiple kinds of cancer that are difficult to treat.
Merck Healthcare Chief Executive Officer Belen Garijo said: "Our bifunctional fusion protein M7824 has the potential to bring new answers to patients living with cancer. Together with GSK, we aim to drive a paradigm shift in the treatment of cancer as the leader in this novel class of immunotherapies."
At present, there are eight high-priority studies of M7824 that are either ongoing or expected to begin in 2019. These include studies of M7824 as a biliary tract cancer treatment and a phase two trial of M7824 in non-small cell lung cancer patients.
Merck will receive EUR300 million upfront as part of the collaboration, with an additional EUR500 million of development milestone payments possible based on lung cancer programme data.
The deal also includes future approval and commercial milestone payments totalling a maximum of EUR2.9 billion by Glaxo to Merck, putting the whole value of the agreement at EUR3.7 billion.
"M7824 brings together two different biological functions in a single molecule and we have observed encouraging clinical results in treating certain cancer patients, particularly those people with non-small cell lung cancer. I'm excited by the potential impact this first-in-class immunotherapy could have on the lives of cancer patients," said Glaxo Chief Scientific Officer And Research & Development President Hal Barron.
Glaxo said the move is a "a further step" toward its goal to strengthen its pharma pipeline, following its acquisition of oncology-focused pharma company Tesaro Inc for USD5.1 billion in cash last month.
Shares in Glaxo were up 0.8% at 1,491.20 pence on Tuesday.
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