Merck & Co., Kelun-Biotech in $9.5-Bn ADC Pact
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Merck & Co. and Kelun-Biotech, a Chengdu, China-based clinical-stage bio/pharmaceutical company, have agreed to develop seven preclinical antibody-drug conjugates (ADCs) for treating cancer in a deal worth up to $9.475 billion ($175 million upfront, $9.3 billion in milestone payments, and an undisclosed equity investment by Merck in Kelun-Biotech).  

Under the agreement, Kelun-Biotech has granted Merck & Co. exclusive global licenses to research, develop, manufacture, and commercialize multiple preclinical ADC candidates and exclusive options to obtain additional licenses to other ADC candidates. Kelun-Biotech retains the right to research, develop, manufacture, and commercialize certain licensed and option ADCs for mainland China, Hong Kong, and Macau. 

Kelun-Biotech will receive an upfront payment of $175 million from Merck. Kelun-Biotech is also eligible to receive future development, regulatory, and sales milestone payments totaling up to $9.3 billion, if Kelun-Biotech does not retain mainland China, Hong Kong, and Macau rights for the option ADCs and all candidates achieve regulatory approval, plus tiered royalties on net sales for any commercialized ADC product. Merck & Co. also intends to make an equity investment in Kelun-Biotech.  

The transaction is subject to customary closing conditions including regulatory approval under the Hart-Scott Rodino (HSR) Act and approvals by the shareholders of Kelun-Biotech and Sichuan Kelun Pharmaceutical. 

Source: Merck & Co.