Merck & Co. Secures Major Funding for Oncology Portfolio
Merck & Co. announced deals that include a $150 million upfront payment to gain full ownership of an early-stage program and a $700 million cash infusion to advance its late-stage cancer portfolio.
Blackstone’s Strategic Investment
The latter comes from Blackstone Life Sciences, which has agreed to help cover development costs for sacituzumab tirumotecan (sac-TMT) through 2026. Merck has already launched its 15th global phase 3 study of the antibody-drug conjugate, underscoring its confidence in the TROP2-targeting therapy’s potential to become a cornerstone of the company’s oncology franchise. As biosimilar versions of Keytruda draw closer to market, Merck is betting big on sac-TMT to help sustain its leadership in cancer care, as stated by the firm’s SVP Marjorie Green.
Terms of the Partnership
By partnering with Blackstone, Merck can ease the financial load of confirming sac-TMT’s effectiveness across multiple treatment settings. In return, the company will grant Blackstone a small percentage of future sales from the drug across all authorized uses within its marketing regions. However, this is based on the condition that the antibody-drug conjugate (ADC) earns the FDA green light in first-line triple-negative breast cancer (TNBC), supported by outcomes from the TroFuse-011 study.
Competitive Landscape in Cancer Therapy
Merck originally obtained rights outside China to sac-TMT from Kelun-Biotech in a 2022 deal worth $47 million upfront plus as much as $1.4 billion tied to developmental and commercial milestones. That transaction positioned Merck to compete head-to-head with AstraZeneca/Daiichi Sankyo’s Datroway and Gilead Sciences’ Trodelvy, two other TROP2-targeted ADCs already cleared in the U.S. The rivalry among these drugs is expected to intensify as all three contenders move toward the first-line TNBC treatment segment.
The Financial Stakes
The deal with Blackstone highlights the scale of Merck’s investment in sac-TMT as well as the potential payoff if the antibody-drug conjugate meets the company’s lofty goals. According to Merck, the $700 million contribution will cover only part of the total development spending for sac-TMT. Assuming a roughly 4% share of royalty, total global revenue from the ADC would need to surpass $17.5 billion before Blackstone begins earning profits beyond its initial funding commitment.
Broader Deal-Making Context
A separate agreement announced the same day illustrated how Blackstone might recoup its investment more quickly. Royalty Pharma purchased from Blackstone-managed funds an income stream linked to Alnylam’s Amvuttra for $310 million. Blackstone had previously obtained this financial interest in 2020, when it pledged up to $150 million to help finance a late-stage clinical trial of the RNAi therapy. This mirrors its current co-funding arrangement with Merck to advance sac-TMT through pivotal studies.
Just minutes before announcing its collaboration with Blackstone, Merck disclosed a new arrangement with Dr. Falk Pharma concerning MK-8690. The company had obtained the anti-CD30 antibody through its nearly $11 billion acquisition of Prometheus Biosciences in 2023, a transaction largely driven by interest in the anti-TL1A therapy PRA023. Back in 2020, Prometheus had entered into a joint development agreement with Falk, receiving an upfront payment in the low seven-figure range as part of that earlier collaboration.
