The deal will fund a portion of the development costs for Sacituzumab Tirumotecan, also known as Sac-TMT.
- Merck is currently evaluating Sac-TMT in 15 global late-stage trials spanning six tumor types, including breast, endometrial, and lung cancers.
- Separately, the company also said that it has now assumed full responsibility for the development of MK-8690, an investigational drug targeting inflammatory bowel diseases.
Shares of Merck (MRK) traded 1% higher on Tuesday afternoon after the company said that it has entered into a funding agreement with Blackstone Life Sciences to advance its experimental cancer drug.
Under the deal, Blackstone will pay Merck $700 million to fund a portion of the development costs for Sacituzumab Tirumotecan or Sac-TMT, an investigational antibody-drug conjugate. An antibody-drug conjugate (ADC) is a type of cancer therapy that combines a targeted antibody with a chemotherapy drug to deliver the drug directly to cancer cells, minimizing damage to healthy cells.
Terms Of The Funding Deal
Merck is currently evaluating the drug in 15 global late-stage trials spanning six tumor types, including breast, endometrial, and lung cancers. The funding agreement will help fund a portion of the development costs in 2026.
Blackstone, in return, will be eligible to receive low-to-mid single-digit royalties on net sales of the drug contingent upon receipt of regulatory approval in the U.S. for first-line treatment of triple-negative breast cancer. Blackstone, however, will not receive any right to the drug.
Sac-TMT was developed by Sichuan Kelun Pharmaceutical Co. The company granted Merck the exclusive rights to develop, manufacture, and commercialize sac-TMT in all territories outside of Greater China, including Mainland China, Hong Kong, Macau, and Taiwan, under a deal.
Merck Assumes Responsibility For MK-8690
Separately, Merck announced on Tuesday that it has reached an agreement through a unit with Germany’s Dr. Falk Pharma GmbH to discontinue a contract signed in 2020 concerning co-development and co-commercialization rights in certain territories for MK-8690, an investigational drug targeting inflammatory bowel diseases. Merck has now assumed full responsibility for the development program.
Dr. Falk will receive $150 million upfront as part of the deal termination and will continue to be eligible to receive payments associated with development milestones, as well as royalties on sales in certain territories.
Merck said that it will record a pre-tax charge to research and development expenses of $150 million, or approximately $0.05 per share, in its fourth quarter results as a result of the discontinuation of the deal.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around MRK stock stayed within the ‘bullish’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.
MRK stock is down 16% this year and approximately 18% over the past 12 months.
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