Merck & Co (known as MSD outside of the United States and Canada) and Daiichi Sankyo have entered into a global development and commercialization agreement for the jointly development of three of Daiichi Sankyo’s DXd antibody-drug conjugate (ADC) candidates.  The selected ADCs include patritumab deruxtecan (U3-1402/HER3-DXd), ifinatamab deruxtecan (DS-7300a/I-DXd) and raludotatug deruxtecan (DS-6000a/R-DXd).

As part of the agreement, the companies will jointly develop and potentially commercialize these ADC candidates worldwide, except in Japan where Daiichi Sankyo will maintain exclusive rights. Daiichi Sankyo will be solely responsible for manufacturing and supply.

Clinical development
The three potentially first-in-class DXd ADCs are in various stages of clinical development for the treatment of multiple solid tumors both as monotherapy and/or in combination with other treatments.

  • Patritumab deruxtecan was granted Breakthrough Therapy Designation by the U.S. Food and Drug Administration in December 2021 for the treatment of patients with EGFR-mutated locally advanced or metastatic non-small cell lung cancer (NSCLC) with disease progression on or after treatment with a third-generation tyrosine kinase inhibitor (TKI) and platinum-based therapies. The submission of a biologics license application (BLA) in the U.S. is planned by the end of March 2024 for patritumab deruxtecan, which is based on data from the HERTHENA-Lung01 Phase 2 trial (ClinicalTrials.gov; NCT04619004) recently presented at the IASLC 2023 World Conference on Lung Cancer and simultaneously published in the Journal of Clinical Oncology. These results conformed that after tumor progression with EGFR tyrosine kinase inhibitor (TKI) therapy and platinum-based chemotherapy (PBC) in patients with EGFR-mutated NSCLC, HER3-DXd once every 3 weeks demonstrated clinically meaningful efficacy with durable responses, including in CNS metastases. [1][2]
  • Ifinatamab deruxtecan is currently being evaluated as monotherapy in IDeate-01 (ClinicalTrials.gov; NCT05280470), a Phase 2 clinical trial in patients with previously treated extensive-stage small cell lung cancer (SCLC). Updated results from a subgroup analysis of a Phase 1/2 trial of ifinatamab deruxtecan in SCLC were recently presented at the IASLC 2023 World Conference on Lung Cancer.
  • Raludotatug deruxtecan is currently being evaluated in a first-in-human Phase 1 clinical trial (ClinicalTrials.gov; NCT04707248) and updated results in patients with advanced ovarian cancer were presented at the European Society for Medical Oncology (ESMO) Congress 2023, held in Madrid, Spain October 20 – 24, 2023.

Proprietary technology
Designed using Daiichi Sankyo’s proprietary DXd ADC technology to target and deliver a cytotoxic payload inside cancer cells that express a specific cell surface antigen, each ADC consists of a monoclonal antibody attached to a number of topoisomerase I inhibitor payloads (an exatecan derivative, DXd) via tetrapeptide-based cleavable linkers.

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“The promising results from clinical trials of patritumab deruxtecan, ifinatamab deruxtecan and raludotatug deruxtecan continue to demonstrate the broad applicability of Daiichi Sankyo’s DXd ADC technology across multiple targets, with each of these medicines having the potential to change clinical practice as has been already seen with ENHERTU®,” said Sunao Manabe, Representative Director, Executive Chairperson and CEO, Daiichi Sankyo Company, Limited.

“As Daiichi Sankyo continues its transformation into a global oncology leader by increasingly building our infrastructure and talent, we recognize that a collaboration with Merck, a company with remarkable oncology experience and strong in-house development capabilities and resources, will help us deliver on our obligation to deliver these potential new DXd ADCs to more patients as quickly as possible.”

“At Merck, we continue to augment and diversify our oncology pipeline while building on our immuno-oncology foundation,” said Robert M. Davis, Chairman and Chief Executive Officer, Merck.

“The pioneering work by Daiichi Sankyo scientists has highlighted the far-reaching potential of ADCs to provide meaningful new options for patients with cancer. We look forward to forging this collaboration to deliver the next generation of precision cancer medicines, driven by our mutual compassion for patients around the world.”

DXd ADC portfolio
Daiichi Sankyo’s DXd ADC portfolio of consists of six antibody-drug conjugates in clinical development across multiple types of cancer.

Trastuzumab deruxtecan ([fam-trastuzumab deruxtecan-nxki in the U.S. only] Enhertu®; Daiichi Sankyo and AstraZeneca), a HER2 directed ADC, and datopotamab deruxtecan (Dato-DXd), a TROP2 directed ADC, are being jointly developed and commercialized globally with AstraZeneca.

Patritumab deruxtecan (HER3-DXd), a HER3 directed ADC, ifinatamab deruxtecan (I-DXd), a B7-H3 directed ADC, raludotatug deruxtecan (R-DXd), a CDH6 directed ADC, are being jointly developed and commercialized globally with Merck.

DS-3939, a TA-MUC1 directed ADC, is being developed by Daiichi Sankyo.

The ADCs in Daiichi Sankyo’s portfolio are designed using the company’s proprietary DXd ADC technology to target and deliver a cytotoxic payload inside cancer cells that express a specific cell surface antigen. Each ADC consists of a monoclonal antibody attached to a number of topoisomerase I inhibitor payloads (an exatecan derivative, DXd) linked via tetrapeptide-based cleavable linkers.

Financial terms
Under the terms of the agreement, Merck & Co/MSD will pay Daiichi Sankyo upfront payments of US $1.5 billion for ifinatamab deruxtecan due upon execution. In addition, the company will pay US $1.5 billion for patritumab deruxtecan, where US $750 million is due upon execution and US $750 million is due after 12 months; and, finally, Mark & Co/MSD will pay US $1.5 billion for raludotatug deruxtecan, where US $750 million is due upon execution and US $750 million is due after 24 months.

Merck also will pay Daiichi Sankyo up to an additional US $5.5 billion for each DXd ADC contingent upon the achievement of certain sales milestones. When combined with the additional refundable upfront payment of $1 billion described below, total potential consideration across the three programs is up to US $22 billion.

Merck may opt out of the collaboration for patritumab deruxtecan and raludotatug deruxtecan and elect not to pay the two continuation payments of $750 million each that are due after 12 months and 24 months, respectively. If Merck opts out of patritumab deruxtecan and/or raludotatug deruxtecan, the upfront payments already paid will be retained by Daiichi Sankyo and rights related to such DXd ADCs will be returned to Daiichi Sankyo.

As referenced above, Merck will pay an additional upfront payment of $1 billion ($500 million each for patritumab deruxtecan and ifinatamab deruxtecan), a pro-rated portion of which may be refundable in the event of early termination of development with respect to each program. For raludotatug deruxtecan, Merck will be responsible for 75% of the first $2 billion of R&D expenses. Except as outlined above with respect to R&D expenses, the companies will equally share expenses as well as profits worldwide, except for Japan where Daiichi Sankyo retains exclusive rights and Merck receives a royalty based on sales revenue. Daiichi Sankyo will generally book sales worldwide.

In aggregate, the three programs have multi-billion dollar worldwide commercial revenue potential for each company approaching the mid-2030s.

Impact
The impact on Daiichi Sankyo’s consolidated results for the fiscal year ending March 31, 2024 will be announced at an appropriate time in the future. The collaboration is expected to contribute to enhancing the corporate and shareholder value of Daiichi Sankyo over the medium to long term.

In conjunction with this transaction, Merck will record an aggregate pretax charge of US $5.5 billion, or approximately US $1.70 per share, reflecting the US $4 billion upfront payment and the US $1.5 billion in continuation payments. The impact of this charge will result in a reduction in both fourth-quarter and full-year 2023 GAAP and non-GAAP results. Finally, Merck & Co/MSD will invest in the pipeline assets and incur costs to finance the transaction, resulting in a negative impact to EPS of approximately US $0.25 in the first 12 months following the close of the transaction.

More ADC-related development agreements
The agreement between is part of a wave of new deal-making, linking a variety of pharmaceutical companies with early and clinical stage development companies in the ADC space:

  • Eli Lilly & Co confirmed that it is acquiring Mablink Bioscience, a pre-clinical biotechnology company pioneering the development of next-generationADCs using the company’s PSARLink™ proprietary platform. PSARlink™ linkers chemically and physically link an antibody and a chosen cytotoxic molecule to selectively deliver the payload to tumor cells. the unique structure of go the PSARlink technology “masks” cytotoxic molecules attached tooth antibody, especially hydrophobic compounds, enabling them to stay longer in the body to facilitate tumor cell killing. In animal models, PSARlink™-based ADCs have also demonstrated an improved therapeutic index. In 2021 German Emergence Therapeutics signed an licening agreement with Mablink Bioscience for the development of novel ADCs which is also based on Mablink’s PSARlink™ drug-linker technology.
  • BioNTech and DualityBio formed a global strategic partnership to accelerate the development of DualityBio’s investigational ADCs (BNT323/DB-1303 and BNT324/DB-1311) which bare directed against targets expressed in a board range of advanced solid tumors.  the companies are also jointly developing BNT324/DB-1311 in multiple advanced solid tumors and BNT325/DB-1305, a TROP-2-targeted ADC candidate. Initial results from a  phase 1 / 2 study (NCT05438329), presented during the ESMO 2023 Congress, showed encouraging preliminary activity of BNT325/DB-1305 with an ORR of 30.4% (7/23), and DCR of 87.0% (20/23) (both unconfirmed) across overall study population. Encouraging efficacy signals were observed in non-small cell lung cancer (NSCLC) patients with an ORR of 46.2% (6/13) and an DCR of 92.3% (12/13) (both unconfirmed). 
  • BioNTech also announced a potential US $ 1 billion collaboration with China-based MediLink Therapeutics that will center on the development of the human epidermal growth factor receptor 3 (HER3) targeting ADCs BNT326/YL202 which is being investigated as as a later-line treatment in patients with locally advanced or metastatic epidermal growth factor receptor (EGFR)-mutated NSCLC or HR-positive and HER2-negative breast cancer is ongoing. Medilink’s proprietary Tumor Microenviroment Activable LINker-payload technology platform (TMALIN®) generates homogeneous ADCs that improve the therapeutic window in treatment of solid tumors.
  • Pyramid Biosciences and China-based GeneQuantum Healthcare agreed to jointly develop and commercialize a potential best-in-class ADC targeting TROP2, a cell surface glycoprotein that is highly expressed in a variety of tumors including breast, lung, pancreatic, ovarian and prostate. This agreement gives Pyramid Biosciences access to GeneQuantum’s GQ1010, a unique site-specific conjugation technology that incorporates a novel linker-payload designed to offer an improved stability, safety and potency of the ADC.
  • AstraZeneca and China-based Keymed Biosciences/KYM Biosciences signed a exclusive license agreement for the development of a potential first-in-class ADC targeting Claudin 18.2, a promising therapeutic target in gastric cancer. The agreement stipulated that AstraZeneca take over the global research, development, manufacture and commercialization of CMG901 which targets Claudin 18.2. The drug links an anti-Claudin 18.2 antibody via a protease-degradable linker, to monomethyl auristatin E (MMAE). The investigational agent is evaluated in a phase 1 clinical trial (ClinicalTrials.gov Identifier: NCT04805307) for the treatment of Claudin 18.2-positive advanced solid tumors, including Gastric Cancer, Gastroesophageal Junction Adenocarcinoma and Pancreatic Cancer. Preliminary trial results show that CMG901 has an encouraging clinical profile with early signs of anti-tumor activity across tested the dose levels.

Clinical trials
A Study of DS-6000a in Subjects With Advanced Renal Cell Carcinoma and Ovarian Tumors – ClinicalTrials.gov Identifier: NCT04707248
HERTHENA-Lung01: Patritumab Deruxtecan in Subjects With Metastatic or Locally Advanced EGFR-mutated Non-Small Cell Lung Cancer – ClinicalTrials.gov ID NCT04619004
Study of DS-7300a in Participants With Advanced Solid Malignant Tumors – ClinicalTrials.gov Identifier: NCT04145622
First-in-human Study of DB-1305 for Advanced/​Metastatic Solid Tumors – ClinicalTrials.gov ID NCT05438329
A Study of YL202 in Patients With Locally Advanced or Metastatic Non-small Cell Lung Cancer and Breast Cancer –  ClinicalTrials.gov ID NCT05653752
Safety, Tolerability, Pharmacokinetics, and Preliminary Efficacy, Phase 1 Study of CMG901 – ClinicalTrials.gov Identifier: NCT04805307

Reference
[1] Yu HA, Goto Y, Hayashi H, Felip E, Chih-Hsin Yang J, Reck M, Yoh K, Lee SH, Paz-Ares L, Besse B, Bironzo P, Kim DW, Johnson ML, Wu YL, John T, Kao S, Kozuki T, Massarelli E, Patel J, Smit E, Reckamp KL, Dong Q, Shrestha P, Fan PD, Patel P, Sporchia A, Sternberg DW, Sellami D, Jänne PA. HERTHENA-Lung01, a Phase II Trial of Patritumab Deruxtecan (HER3-DXd) in Epidermal Growth Factor Receptor-Mutated Non-Small-Cell Lung Cancer After Epidermal Growth Factor Receptor Tyrosine Kinase Inhibitor Therapy and Platinum-Based Chemotherapy. J Clin Oncol. 2023 Sep 10:JCO2301476. doi: 10.1200/JCO.23.01476. Epub ahead of print. PMID: 37689979.
[2] Sidaway P. Patritumab deruxtecan shows activity in EGFR-mutant NSCLC. Nat Rev Clin Oncol. 2023 Dec;20(12):817. doi: 10.1038/s41571-023-00822-6. PMID: 37749383.

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