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Erik S. Lesser/Getty Images News
Merck (NYSE:MRK) announced Thursday an agreement with Japanese pharma Daiichi Sankyo (OTCPK:DSKYF) to jointly develop and commercialize three antibody-drug conjugates (ADC) targeted at solid tumors.
The deal covers ADCs, patritumab deruxtecan (HER3-DXd), ifinatamab deruxtecan (I-DXd), and raludotatug deruxtecan (R-DXd). They are currently undergoing studies as monotherapy and as part of combination therapies for various cancer types.
Per the terms, Merck will pay Daiichi (OTCPK:DSNKY) $4B upfront and $1.5B in additional payments over the next 12 months. With $16.5B in payments due upon the achievement of future sales milestones, the total consideration of the deal reaches up to $22B.
The companies will equally share expenses as well as profits linked to the candidates globally, except in Japan, where Daiichi (OTCPK:DSNKY) will retain exclusive rights and Merck (MRK) will receive royalties.
However, for raludotatug deruxtecan, Merck will cover 75% of the first $2B of R&D expenses.
In conjunction with the announcement, Merck (MRK) said its Q4 and full-year 2023 results will take a hit as the deal will lead to ~$1.70 per share in pre-tax charges.
There will be an adverse impact of ~$0.25 per share in the first 12 months following the close of the transaction as the company invests in the pipeline and incurs expenses to fund the deal.
More on Daiichi, Merck, etc.
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