Merck invests $700M in antibody drug for immune diseases

Merck & Co. announced on Friday its acquisition of an experimental drug aimed at eliminating B cells of the immune system. This move showcases a growing industry interest in employing bispecific antibodies to address autoimmune diseases. According to the agreement, Merck will pay Curon Biopharmaceutical, a privately-held biotechnology firm based in China, an upfront payment of $700 million for the rights to a treatment known as CN201. Curon could receive an additional $600 million in subsequent payments if the drug reaches specific developmental and regulatory milestones.

Curon's treatment, CN201, is a dual-acting antibody that targets a protein on B cells. These cells, while essential for producing protective antibodies, can also cause issues in autoimmune diseases and certain cancers. Existing cell therapies and bispecific drugs have shown effectiveness in treating particular blood cancers by focusing on proteins on malignant B cells. Recent studies indicate that this strategy could also be beneficial for autoimmune diseases.

To date, Curon has primarily focused on using this approach to combat cancer. The company is currently testing CN201 in early-stage clinical trials for lymphoma and leukemia, with preliminary data presented at the American Society of Clinical Oncology meeting earlier this year. Merck disclosed that the trials have demonstrated a significant and sustained reduction in B-cell counts. While Merck plans to continue testing CN201 in B-cell malignancies, it also sees potential in using the drug for autoimmune diseases.

Dean Li, Merck's research chief, emphasized the promising nature of early clinical data, which suggests that CN201 could effectively target and deplete both circulating and tissue B cells. This capability opens the door to treating various malignant and autoimmune diseases.

Merck’s venture into autoimmune disease research places it within a quickly expanding field. In recent years, numerous clinical trials have been launched to test cell therapies for conditions such as lupus and myasthenia gravis. Pharmaceutical companies are also exploring dual-targeting antibody drugs, which may offer more convenient and easier-to-manufacture treatment alternatives.

For example, Roche currently has two such drugs in early-stage clinical trials. Startup Zenas Biopharma is preparing to begin Phase 2 trials for their dual-targeting antibody drug in lupus and multiple sclerosis. Cullinan Therapeutics is on the brink of conducting trials in lupus and rheumatoid arthritis.

Similar to Cullinan, Curon has been developing a drug that targets the immune cell proteins CD19 and CD3. This approach gained attention earlier this year when European researchers reported encouraging results in a systemic sclerosis patient treated with Amgen’s CD19 and CD3 targeting drug Blincyto, which is already approved for a form of leukemia.

William Blair analyst Matt Phipps noted that Merck's acquisition of Curon strengthens the case for using CD19xCD3 therapies to treat autoimmune diseases.

Additionally, the acquisition reflects a broader trend in the economic aspects of drug licensing deals. A recent report by J.P. Morgan highlighted a significant decline in the upfront payments given to preclinical drug companies over the past few years. Conversely, companies with drugs in mid- or late-stage trials are now receiving much larger guaranteed payments.

In summary, Merck’s acquisition of Curon Biopharmaceutical and its experimental drug CN201 underscores a strategic move into the burgeoning field of autoimmune disease treatment, leveraging the potential of bispecific antibodies. This deal not only highlights the promising potential of CN201 but also indicates a shift in the financial dynamics of drug licensing agreements.