Merck Hops Onto PD-1/VEGF Train, Committing up to $3B Plus in LaNova Deal

 

Despite recent enthusiasm around the PD-1/VEGF space, BMO Capital Markets analyst Evan Seigerman noted that Merck’s pact with LaNova Medicines is more “conservativism” on the pharma’s part, rather than confirmatory of recent data in the drug class.

Merck announced a licensing deal Thursday with Shanghai-based LaNova Medicines to advance a next-generation cancer therapy that could help the pharma maintain its frontrunner status in oncology—even as its blockbuster PD-1 inhibitor Keytruda (pembrolizumab) begins to face biosimilar competition in the coming years.

Under the terms of agreement, Merck will pay $588 million upfront for the exclusive global right to develop, manufacture and commercialize LaNova’s investigational bispecific antibody LM-299. The Chinese biotech will also be eligible to receive up to $2.7 billion in technology transfer, development, regulatory and commercialization milestones across several oncology indications.

Merck and LaNova expect to close the transaction by the end of the year, pending antitrust approvals and other customary conditions.

LM-299, the centerpiece of Thursday’s agreement, is a bispecific antibody that belongs to a new but rapidly emerging class of cancer therapies. It is currently being assessed in a Phase I study in China for solid tumors, though the partners have yet to reveal what specific cancer types they plan to target. The investigational treatment works by combining the PD-1 and VEGF pathways, which theoretically would allow it to restore the immune system’s cancer-killing activity while simultaneously preventing tumors from forming new blood vessels.

Biopharma has begun to see the potential of this mechanism of action, with more and more companies upping their investments in the drug class.

This shift was highlighted in September 2024 when Summit Therapeutics and development partner Akeso, also headquartered in China, announced that their investigational PD-1/VEGF-A bispecific ivonescimab outperformed Keytruda in advanced non-small cell lung cancer. Patients treated with ivonescimab saw a nearly 50% drop in the risk of disease progression or death versus Keytruda—a strongly significant effect with p-value lower than 0.0001.

At the time, Summit CEO Maky Zanganeh said these findings point to the potential of ivonescimab “to be the next generation in PD-1 directed immunotherapy.”

BioNTech is also coming after Keytruda’s throne, putting down $800 million upfront on Wednesday to acquire China-based Biotheus and its anti-PD-L1/VEGF-A bispecific antibody BNT327/PM8002. The acquisition agreement also includes up to $150 million in certain milestone payments. BioNTech CEO Ugur Sahin said he believes the candidate “has the potential to set a new standard of care in multiple oncology indications, surpassing traditional checkpoint inhibitors.”

Analysts, however, do not seem to be convinced just yet. In response to Summit’s data drop in September, BMO Capital Markets’ Evan Seigerman wrote in a note that despite the promising results, ivonescimab is “not yet the Keytruda slayer.”

Seigerman again took a measured note on Thursday, calling the LaNova deal a “conservative acquisition for Merck, rather than confirmatory of the data we have seen from other players.” Merck maintains its “best-in-class” status in the PD-1 space, “with a wall of clinical data and a rapidly advancing pipeline of other modalities” targeting the pathway, Seigerman said. LM-299 “simply adds another arrow to Merck’s arsenal.”

Guggenheim Partners’ Vamil Divan echoed Seigerman’s cautious optimism about the PD-1/VEGF space, writing in a Thursday note that “we await overall survival data from PD-1/VEGF bispecifics in a broader, more geographically diverse population.” Still, “it makes sense for Merck to be proactive in working to address this potential threat.”

https://www.biospace.com/business/merck-hops-onto-pd-1-vegf-train-committing-up-to-3b-plus-in-lanova-deal