Under the agreement, Shanghai-headquartered LaNova will receive an upfront payment of $588 million and is also eligible to receive up to $2.7 billion in milestone payments associated with the technology transfer, development, regulatory approval, and commercialization of LM-299 across multiple indications.

LM-299 is an investigational bispecific antibody targeting both programmed cell death protein-1 (PD-1) and vascular endothelial growth factor (VEGF). It is designed to inhibit both PD-1/PD-L1 and VEGF/VEGFR receptor signaling pathways releasing a key immune checkpoint while also inhibiting the production of new blood vessels (angiogenesis), the two companies said in a statement. A Phase 1 clinical trial for LM-299 is currently enrolling patients in China.

“At Merck, we continue to assemble a strong and diversified oncology pipeline spanning differentiated mechanisms and multiple modalities,” said Dean Y. Li, president of Merck Research Laboratories. “This agreement adds to Merck’s growing oncology pipeline and we look forward to advancing LM-299 with speed and rigor for patients in need.”

Crystal Qin, LaNova’s founder and CEO, commented: “Through internal R&D innovation and strategic external partnerships, LaNova is committed to advancing its pipeline to benefit patients worldwide.”

The transaction, subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, is expected to close in the fourth quarter of 2024.