Merck KGaA (MKGAY) announced that through its wholly owned subsidiary, Ares Trading, it has evolved its agreement with Intrexon Corporation (XON) for the development of Chimeric Antigen Receptor T-cell therapies, genetically engineered T-cells with synthetic receptors that recognize a specific antigen expressed on tumor cells. The agreement with Intrexon and its wholly-owned subsidiary, Precigen, enables Merck KGaA, Darmstadt, to continue to implement its focused R&D strategy, while maintaining an investment in the future potential of next-generation CAR-T development. Under the terms of the agreement, Merck KGaA will assign its exclusive CAR-T development rights to Intrexon. Merck KGaA will receive shares of Intrexon common stock valued at $150M in exchange for assigning Intrexon its CAR-T rights. Merck KGaA first entered into a collaboration and license agreement with Intrexon in 2015 to develop and commercialize CAR-T cancer therapies utilizing Intrexon’s proprietary RheoSwitch Therapeutic System and the Sleeping Beauty non-viral gene integration technology. The combination of these platforms enables regulation of gene expression and delivery with a non-viral approach and preclinical data indicate the potential to improve therapeutic safety and facilitate shortened manufacturing to improve time-to-treatment. As of December 31, 2017, these rights were considered intangible assets not yet available for use with a carrying amount of EURO$104M. In addition to receiving $150M of Intrexon common stock, this agreement also includes a further $25M investment in Intrexon. In return, Merck KGaA will receive a $25M convertible note, providing the option to receive either Precigen or Intrexon stock. The closing of the transactions contemplated by the agreement is subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
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