Merck KGaA and F-star in €1bn deal

At ASCO in Chicago, the companies announced the exclusive option agreement, which brings a €115m upfront payment to F-Star’s bank account. If Merck KGaA exercises the option, F-Star is eligible to cash in up to €900m in milestones since the option agreement becomes effective. The deal is mostly around F-Star’s most advanced bi-specific asset, FS118, a programme run Through F-Star Delta, one of 4 asset-related satellite company of the Cambridge-based biotech. Furthermore, it includes four further bispecific IgG-like antibodies in discovery stage, which target several immune checkpoints not disclosed by the companies.

FS118 is currently in preclinical development and targets both LAG-3 (Lymphocyte-Activation Gene 3) and PD-L1 (Programmed Death-Ligand 1), two immune checkpoint receptors strongly implicated in allowing cancers to evade the host immune system. While PD-L1 is targeted through the antibody variable domain, LAG-3 is targeted through a Fc-domain with antigen binding activity. Because, FS118 is a full length IgG it retains the characteristics of conventional antibodies, with comparable structure, functionality and manufacturing properties.

The deal is good news for F-Star, after Bristol-Myers Squibb last year declined a US$475m option to acquire the British company’s Phase I lead asset FS102 following Phase IIb proof-of-concept. The anti-HER2 (Epidermal Growth Factor Receptor 2) Fcab, developed through F-Star Alpha, preclinically induced profound internalisation and degradation of the HER2 receptor  which is overexpressed on the surface of gastric and breast cancer cells. 

Other IgG-like antibodies targeting immune checkpoints are being developed by Merck’s competitor Roche, and some have already entered clinical testing.

Luciano Rossetti, Executive Vice President, Global Head of Research & Development at Merck, said: “Our collaboration with F-star will help us to rapidly enhance our pipeline and grow our portfolio of bispecific immunotherapies. This deal complements our internal capabilities in immuno-oncology and positions us as a potential leader in this important area of research.”