Seattle Genetics Inc. (NASDAQ:SGEN) Enters Two Oncology Collaboration Agreements With Merck (NYSE:MRK)

Seattle Genetics Inc. (NASDAQ:SGEN) and Merck (NYSE:MRK) have entered two new strategic oncology partnerships for co-development and global commercialization of Ladiratuzumab Vedotin and co-development agreement to expedite global reach of TUKYSA for HER2-Positive cancers outside Canada, the US, and Europe.

Seattle Genetics to commercialize ladiratuzumab vedotin

According to the agreement, the company will develop and globally commercialize Seattle Genetics’ investigational antibody-drug conjugate, ladiratuzumab vedotin, which targets LIV-1. The ADC is currently in second phase clinical studies for the treatment of breast cancer as well as other solid tumors. This collaboration intends to pursue a wide co-development program that will evaluate ladiratuzumab vedotin as a monotherapy or in combination with anti-PD-1 therapy KEYTRUDA┬« of Merck in Hormone receptor-positive breast cancer, triple-negative breast cancer, and LIV-1-showing solid tumors.

Merck will pay Seattle Genetics an upfront payment of $600 million as part of the collaboration deal. It will also make a $1 billion equity investment in Seattle Genetics, acquiring 5 million common shares at $200 per share. Equally, Seattle Genetics will be eligible for up to $2.6 billion progress-based milestone payments.

Collaboration of commercialization of TUKYSA

In another agreement, Seattle Genetics granted Merck an exclusive commercialization license for its small-molecule tyrosine kinase inhibitor, TUKYSA® in treating HER2 positive cancers in the Middle East, Asia, and Latin America as well as other regions outside Canada, the US, and Europe. From the agreement, Seattle Genetics is expected to receive an upfront payment of around $125 million from Merck and will also be eligible for another progresses dependent milestone payment of around $65 million,

Seattle Genetics CEO and President Clay Siegall stated that the collaboration on ladiratuzumba vedotin with Merck will allow the company to accelerate and expand its development program to treat breast cancer and solid tumors in combination with KEYTRUDA. Clay said that this will position the company to leverage its European and US commercial operations. Also, the strategic partnership for TUKYSA will help Seattle reach more patients across the globe and thus benefit from already established commercial strength of leading pharmaceutical companies.