Merck KGaA (MKGAF) and MorphoSys AG announced that they have inked a deal to discover and develop therapeutic antibodies against undisclosed immune checkpoints. MorphoSys will work with Merck KGaA's biopharmaceutical division, Merck Serono, to develop therapies that modulate the natural capability of the immune system to fight tumors.
Terms of the Deal
According to the agreement, MorphoSys' proprietary Ylanthia antibody phage library and technology platform will help in the identification of the targeted antibodies. Meanwhile, Merck Serono's expertise in the field of immuno-oncology will come in handy for development from phase I onwards. Merck Serono will be solely responsible for commercializing any products resulting from this agreement.
As per the deal, the cost of research & development will be shared by MorphoSys and Merck KGaA. However, MorphoSys holds the right to-opt out at predefined stages. MorphoSys will receive milestone payments on the achievement of certain development and commercial goals. Additionally, it will receive tiered royalties on sales of products depending on the extent of its co-funding.
Our Take
With this deal, Merck KGaA's cancer immunotherapy portfolio, which consists of both early-stage and late-stage candidates, will be strengthened further.
Of late, immuno-oncology has attracted the interest of several companies. Many companies have immuno-oncology candidates in their pipeline and are tying up with other companies as well. Last month, AstraZeneca plc AZN tied up with Incyte Corporation INCY for the development of its investigational immunotherapy, MEDI4736, in combination with Incyte's INCB24360 for the treatment of cancer.
Merck KGaA carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is ANIP Pharmaceuticals Inc. ANIP carrying a Zacks Rank #1 (Strong Buy).
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