Merck, Blackstone Partner on $700M Cancer Drug Development

Merck has entered into a financial agreement with Blackstone Life Sciences (BX.N), which will provide $700 million for the development of an experimental cancer treatment.

According to the agreement's stipulations, Blackstone's drug development division will cover part of the expenses associated with testing sac-TMT, an innovative antibody-drug conjugate. Antibody-drug conjugates are engineered to deliver anti-cancer medications more accurately to cancerous cells, resulting in reduced harm to healthy cells compared to traditional chemotherapy.

Currently, Merck is assessing sac-TMT in 15 advanced global trials across six different tumor types, including breast, endometrial, and lung cancers. The company is also focused on expanding its drug pipeline as its leading cancer medication, Keytruda, is expected to face competition from more affordable biosimilars in the coming years.

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"We are making important investments...to sustain our business for the future, while remaining disciplined towards maintaining an appropriate financial profile," said Caroline Litchfield, chief financial officer, Merck.

The companies announced that the payment is anticipated to be completed throughout 2026. Blackstone is qualified to obtain low-to-mid single-digit royalties based on net sales of sac-TMT, which is dependent on the approval from regulatory authorities in the U.S. Sac-TMT is designed to target a protein known as trophoblast cell-surface antigen 2, which is present on the surface of various cancer cells. According to Merck, antibody-drug conjugates that focus on this protein have demonstrated promising anti-tumor efficacy in clinical trials.

Furthermore, the company stated that it will maintain oversight of the development, manufacturing, and commercialization processes for sac-TMT, and Blackstone will not be granted any rights to this cancer therapy. Sac-TMT is being developed under an exclusive licensing and collaboration agreement with Sichuan Kelun-Biotech Biopharmaceutical.