Genmab swallows Merus in US$8bn deal

In a Phase II study in PD-L1-positive patients with head and neck squamous cell carcinoma, petosemtamab performed markedly better than competing EGFR-targeting antibodies: while overall response rates were roughly similar, 79% of patients responding to petosemtamab achieved 12-month overall survival, compared with just under 50% of those treated with EGFR antibodies. This is likely because simultaneous binding to LGR5 and EGFR triggers internalisation and degradation of EGFR.

As enhanced EGFR degradation is expected to modulate pro-tumourigenic tumour microenvironment (TME) and improve the efficacy of PD-(L)1 checkpoint inhibitors, high hopes rest on the antibody. Additionally, via its Fc region, the Merus antibody construct mediates antibody-dependent cellular cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP).

Genmab aims for market approval as early as 2027, upon completion of ongoing Phase III trials, and anticipates US$1bn in revenue per year during the first two years of commercialisation. Analysts at William Blair pointed to expected peak sales of up to US$4bn for petosemtamab alone in head and neck cancer. The antibody is also being tested in Phase II studies as monotherapy and in combination with PD-L1 checkpoint inhibitors in metastatic colorectal cancer.

Genmab paid US$97 per Merus share, representing a 41% premium over the closing price of US$68.89 on Friday