Switzerland's Merck Serono, the biopharmaceuticals arm of Germany's Merck KGaA, and US biopharmaceuticals producer Sutro Biopharma have agreed a collaboration and license agreement to develop antibody drug conjugates (ADCs) for use in cancer drugs.

The joint research will leverage the Merck offshoot's knowledge about target biology in combination with San Franciso-based Sutro's technological and discovery capabilities.

In particular, the efforts will be directed at finding multiple ADCs, utilizing Sutro's cell-free protein synthesis platforms. The US partner will be responsible for delivering ADCs for Phase I clinical trials, while the Swiss company will have responsibility for clinical development and commercialization of any resulting products.

Merck Serono, which will be able to use Sutro's technology platforms in its oncology programs to develop ADCs for multiple targets, will make an up-front payment to the California firm. Sutro also will be eligible to receive payments on completion of certain R&D and regulatory milestones valued at around €230 million, as well as royalties on product sales.

The companies said they believe ADCs have the potential to directly target cancer cells while safeguarding healthy tissue.