Merck & Co. will pay Daiichi Sankyo to co-develop the three ADCs, patritumab deruxtecan (HER3-DXd), ifinatamab deruxtecan (I-DXd) and raludotatug deruxtecan (R-DXd). Payment is broken down into a €3.8 billion upfront payment, €1.4 billion continuous payments over 24 months, and potentially additional payments of up to €15.6 billion contingent upon future sales milestones. Daiichi Sankyo will be solely responsible for manufacturing and supply. All three potentially first-in-class DXd ADCs are in various stages of clinical development for treating multiple solid tumors both as monotherapy and/or in combination with other treatments.

Sunao Manabe, Representative Director, Executive Chairperson and CEO of Daiichi Sankyo, commented, “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 CEO, Merck & Co.. “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.”

Aside from 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 & Co. 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.