Under the terms, PDS will make a first upfront cash payment of $5 million to Merck. The German group will also acquire a stake in the New Jersey-based biotech, which will assume responsibility for future development, commercialization and manufacturing of the protein.

In addition to the cash-in-hand, Merck will be entitled to receive up to $11 million in development and regulatory milestone payments including first commercial sales for the first two indications and up to $105 million in commercial milestones, as well as a 10% royalty on future sales of M9241 with standard step-down provisions.

In its share purchase, the Darmstadt-based player focused on pharmaceuticals, chemicals and life science will receive 378,787 shares of PDS Biotech’s common stock valued at $5 million, based on the closing price of the common stock on Dec. 30, 2022.

Merck and PDS have previously worked together on combination treatments for human papillomavirus (HPV)-associated malignancies, with a phase 1/2 trial currently in progress.

Announcing the license agreement, the companies said M2941, which will be carried as PDS0301 on the license holder’s platform, appears to enhance the proliferation, potency and longevity of T cells in the tumor. The combination of Versamune and IL-12 patented by PDS Biotech is designed to overcome tumor immune suppression utilizing a different mechanism from checkpoint inhibitors.

Calling the protein, a “highly innovative cytokine therapy,” PDS Biotech’s CEO, Frank Bedu-Addo, said the deal with Merck “further confirms” the potential of his company’s Versamune platform and the data generated to date with this combination therapy. The goal, he said, “will potentially offer more cancer patients improved treatment options.”

PDS Biotech has scheduled a meeting with the Food and Drug Administration (FDA) to discuss a registrational trial for investigating the triple combination of M9241, PDS0101 and a checkpoint inhibitor in recurrent/metastatic HPV-positive cancers.

Implementing Merck’s new strategy

The exclusive license arrangement is in line with Merck’s strategy update in November 2022, when its global healthcare research chief Danny Bar-Zohar said the group would seek to strike a new balance between in-house R&D and external collaboration.

In future, Bar-Zohhar said Merck plans to build on its established expertise in the underlying biology of its therapeutic focus areas of oncology, neurology and immunology and leverage its capabilities in such fields as antibody-drug conjugate (ADC) technology.

At the end of December, the group struck a deal with Cambridge, Massachusetts, US-based Mersana to develop novel ADC product candidates against as many as two targets, utilizing Mersana’s Immunosynthen platform to conjugate proprietary antibodies from Merck. Pre-clinical activities are to be split between the companies, with the German partner solely responsible for clinical development and potential commercialization activities.

Author: Dede Williams, Freelance Journalist