MSD enters fibroblast therapy with $1.9bn Mestag deal

MSD (Merck & Co.) has entered into a licensing and collaboration agreement with Mestag Therapeutics to develop innovative fibroblast therapies aimed at treating inflammatory diseases. This partnership holds the potential to be valued at up to $1.9 billion. While the specifics of the arrangement have not been revealed, it is understood that the deal permits MSD to secure exclusive development and marketing rights to a select number of targets. In exchange, the UK-based biotech company, Mestag, will receive an upfront payment, access fees, option fees, and additional payments down the line.

Fibroblasts, crucial in forming connective tissue, synthesize extracellular matrix components and collagen, the body's structural framework. They also play key roles in wound healing, inflammation, and tissue repair. Mestag’s therapeutic pipeline is focused on antibody therapies that utilize the interactions between fibroblasts and the immune system to address cancer and inflammatory diseases.

One of Mestag’s prominent candidates is MST-0300, a bispecific antibody. This therapy targets the lymphotoxin beta receptor (LTBR) in tumors through the co-engagement with fibroblast activation protein (FAP), a marker specific to cancer-associated fibroblasts. The aim is to induce the formation of tertiary lymphoid structures (TLSs) within solid tumors, which are often associated with better patient outcomes and enhanced therapeutic responses. Mestag intends to submit an investigational new drug (IND) application for MST-0300 in the latter half of 2025.

Another promising therapy in Mestag’s pipeline is M402, a stromal checkpoint agonist antibody. This preclinical candidate is designed to inhibit specific immune cell populations, including myeloid cells. Mestag believes that M402 has the potential to benefit patients suffering from various inflammatory diseases such as rheumatoid arthritis, lupus, Sjogren’s syndrome, graft-versus-host disease, and other conditions.

MSD has been making strategic investments to broaden its antibody therapy offerings. In August, MSD acquired Curon Biopharmaceutical, a Chinese firm specializing in developing bispecific antibodies, for approximately $1.3 billion in upfront and milestone payments.

In addition to the collaboration with MSD, Mestag has a history of partnering with other pharmaceutical giants. In 2021, Mestag entered into a licensing agreement with Johnson & Johnson (J&J), granting J&J the option for an exclusive license to develop and commercialize up to two therapies aimed at treating inflammatory diseases.

This new collaboration between MSD and Mestag is a significant step forward in the development of innovative therapies targeting fibroblast-immune interactions. It underscores the growing interest and investment in fibroblast-based treatments and their potential to address unmet needs in both oncology and inflammatory conditions. As the research progresses, the collaboration is expected to yield new therapeutic options that could greatly benefit patients suffering from these challenging diseases.