German Merck widens oncology presence with CAR-T deal

Merck KGaA deepened its commitment to immuno-oncology, moving into the red-hot CAR-T space to access MD Anderson Cancer Center’s technology via a $115m payment to licensees Intrexon and Ziopharm Oncology.

Having made some noise in the checkpoint inhibitor space by licensing phase II project avelumab to Pfizer, the German group now has awakened to Anderson’s Sleeping Beauty asset and its potential in haematological cancers. The deal puts Merck no further ahead in CAR-T than it is in checkpoint inhibitors, however, and with a technology widely viewed as weaker than that of Novartis and Juno Therapeutics.

Licensee to licensor

Worth up to $941m in total milestones, to be shared between Intrexon and Ziopharm, the deal will see Intrexon develop CAR-T candidates through the pre-clinical stage. Merck, which gains exclusive access to the Intrexon technologies in this area, will provide research funding for the first two targets of interest. It will also assume responsibility at the filing of an investigational new drug application, as well as taking the lead on interactions with regulators.

The $115m upfront payment equals the equity and upfront cash that the two biotech developers paid to the University of Texas cancer centre in order to secure exclusive rights to its CAR-T technology earlier in the year (Sleeping Beauty wakes up to $115m deal, January 14, 2015). The partners plan to apply the RheoSwitch gene regulation technology to further develop the Anderson CAR-T asset – Intrexon and Ziopharm have a long-standing technology collaboration.

The two biotechs were not in a position to fully commercialise the asset, and indeed probably were not well enough resourced to advance agents very far through clinical development – thus a bigger partner on the scale of Merck was not a surprise, analysts from Mizuho Securities wrote yesterday.

The speed of the deal, two months after the original deal with MD Anderson, was perhaps a little more surprising, but it is reflective of the level of interest in all things immuno-oncology, and CAR-T specifically.

Making something of oncology

Merck’s oncology strategy has produced mostly disappointment, with signing ex-North American rights to Erbitux having been its most notable success – this is worth $1bn a year to the company. Signing half of avelumab’s (MSB0010718C) global rights to Pfizer was in part a way to build up a US sales force – Xalkori US co-promotion was part of the deal – which is essential to being a significant player in the cancer space (German Merck no longer the immuno-oncology underdog, November 17, 2014).

A PD-L1 inhibitor, avelumab remains well behind the leaders in the checkpoint inhibitor space, the marketed products Keytruda from Merck & Co and Opdivo from Bristol-Myers Squibb. Both of those attack the programmed cell death-1 (PD-1) protein, a pathway exploited by tumour cells to avoid immune response from T cells; avelumab binds to the ligand PD-L1, and thus represents a distinct mechanism.

However, in this it remains well behind the most advanced PD-L1, Roche’s MPDL3280A, which is expected to be launched this year or next. A 2019 launch seems most likely for avelumab.

In CAR-T, MD Anderson’s technology is no more ahead than avelumab is in PD-L1. The Sleeping Beauty technology is seen as safer on such factors as cytokine release syndrome than competing assets, but less effective (ASH – Novartis, Juno, June and Rosenberg steal the T-cell show, December 9, 2014).

Regardless of what Sleeping Beauty has shown so far, CAR-T is an attractive space and assets are scarce. Merck now has global rights to one of those valuable projects – and could find itself in the enviable position of being able to entertain offers from oncology players that so far have not seen partnering success.

EP Vantage has published a broad overview of the current opportunities and risks in the CAR-T space. A free copy of the report is available by download.

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @ByJonGardneron Twitter

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