LaNova Medicines Ltd.

Dive Brief:Merck & Co. is launching a new cost-cutting program, announcing Tuesday a plan to redirect by the end of 2027 $3 billion away from older, slow-growth businesses to newly launched drugs and experimental medicines it hopes can drive faster revenue growth.The move comes as Merck prepares for generic competition to its cancer blockbuster Keytruda beginning in 2028 in the U.S. Research and development, sales and manufacturing functions will be affected as Merck seeks to support the newer drugs.Merck is already facing faltering topline sales as its second biggest drug, the HPV vaccine Gardasil, has struggled in China and Japan. CEO Rob Davis told investors that executives expect a return to growth in the second half of 2025, following a second quarter in which Merck recorded a 2% fall in sales compared with the same period one year ago.Dive Insight:In the companys second quarter earnings call, executives didnt go into detail about how spending within the company would shift. However, Davis dropped a hint that spending behind Keytruda would fall in favor of newer products like the cancer medicine Welireg or an experimental dual-acting drug licensed from LaNova Medicines.Were not looking to pull back on spending in oncology, he said. Its about reallocating our resources and focusing our resources so its not just about Keytruda. Youre going to see greater growth spend as you see Keytruda pull back.Pipeline products and newly launched drugs represent a $50 billion commercial opportunity by the mid-2030s, Mercks executives claim. Of that, new oncology medicines account for $25 billion in potential sales and new cardiometabolic drugs like Winrevair and an experimental cholesterol drug make up $15 billion, while HIV and immunology medicines are another $5 billion each, Davis said.Merck also recently agreed to buy Verona Pharma in a $10 billion deal that will add a newly approved lung disease drug to its pipeline.Still, Merck faces near-term challenges as it confronts falling sales from Gardasil. It has paused China shipments through at least the end of 2025, and also faces slowing revenue in Japan. Meanwhile, in the U.S., the Centers for Disease Control and Prevention may move to recommend a single dose of Gardasil rather than the two to three now used, further limiting sales.Total sales in the second quarter were $15.8 billion, down from $16.1 billion in the same period in 2024. Merck is forecasting 2025 sales of between $64.3 and $65.3 billion, compared with the $64.2 billion it recorded in 2024.Shares fell more than 3% in morning trading. '

Rising biotech deals involving Chinese drugs, Takeda's positive OX2R readouts, and LaNova's acquisition by Sino Biopharm made our news this week. Biotech deals involving assets developed in China are surging, a Jefferies report shows. Takeda is preparing its narcolepsy candidate oveporexton for an FDA filing after two positive phase 3 readouts. Merck & Co.'s PD-1xVEGF partner is being acquired. And more.1. China biotechs ‘reshaping’ US biopharma as outlicensing deals rise 11%: Jefferies reportAbout a third of biopharma’s outlicensing deal value in the first quarter of 2025 centered on Chinese assets, versus 21% during the same period in both 2024 and 2023, according to Jefferies. Since 2022, China biotechs have developed 639 first-in-class drug candidates, a sharp rise compared with prior years, Jefferies tallied.2. Takeda’s narcolepsy blockbuster hopeful secures double phase 3 wins, teeing up FDA filingTakeda’s OX2R agonist oveporexton has hit the mark in two phase 3 narcolepsy trials. The FirstLight and RadiantLight trials met their primary endpoints showing statistically significant improvements for the drug compared with placebo in excessive daytime sleepiness, as measured by the Maintenance of Wakefulness Test at week 12. The company is now preparing for an FDA approval filing.3. Sino Biopharm buys Merck's PD-1xVEGF bispecific partner LaNova for up to $951MLaNova Medicines, from which Merck & Co. recently licensed a PD-1xVEGF bispecific candidate, is being bought out by Chinese compatriot Sino Biopharmaceutical in a deal worth up to $951 million. In addition, LaNova also provided AstraZeneca with a GPRC5D-targeting antibody-drug conjugate. Before the LaNova transaction, very few, if any, Chinese pharmas have acquired innovative domestic biotechs.4. For Lundbeck and Otsuka's PTSD filing, FDA questions Rexulti efficacy after failed phase 3For an upcoming advisory committee meeting, the FDA flagged “discordant results” from two phase 3 trials that Lundbeck and Otsuka are using in their application for Rexulti, in combination with Viatris’ Zoloft, as a treatment for post-traumatic stress disorder. The FDA is asking experts to weigh in on whether an exploratory phase 2 study can overcome one negative phase 3.5. Otsuka inks $613M deal for Swedish biotech's autoimmune antibodiesOtsuka is paying $33 million upfront for Cantargia’s IL1RAP antibody, CAN10, as well as a backup candidate, against autoimmune and inflammatory disorders. The deal also includes up to $580 million in milestone payments and gives the Japanese drugmaker exclusive first rights of negotiation for Cantargia’s next-gen IL1RAP programs.6. Sun Pharma's alopecia med Leqselvi hits US market after Incyte patent settlementSun Pharma has reached a patent settlement with Incyte so the Indian company can launch its JAK inhibitor Leqselvi in the U.S. for severe alopecia areata. Sun will pay an undisclosed upfront payment plus royalty payments until the related patents expire. The deal ended a lawsuit in which Incyte claimed that Leqselvi would infringe on patents around its blockbuster ruxolitinib.7. FDA hands down citations to 3 drugmakers after inspections found contamination, testing concernsMeanwhile, a Sun Pharma plan in Gujarat, India was subject to a 19-page, eight-observation Form 483 following an FDA inspection in June. Some citations, such as “poor aseptic behavior and inadequate environmental monitoring,” had previously been flagged in an FDA warning letter in 2022. Separately, a Daewoo Pharm site in Busan, Korea, and a Glenmark facility in Madhya Pradesh, India, received FDA warning letters.Other News of Note:8. Astellas reports 22% sales bump for Izervay, expects trend to continue this year9. China sentences Astellas exec to 3.5 years in prison for espionage (Bloomberg)10. Hengrui's GLP-1/GIP agonist reports 18% weight loss in phase 3 trial, readies China push11. Acumen taps JCR’s blood-brain barrier tech for $555M Alzheimer’s deal12. GSK expands Medicines Patent Pool deal to allow generic production of cabotegravir for HIV treatment13. Kowa licenses Nicox’s intraocular pressure eye drop for up to €191.5M (release)14. Korea’s Illimis raises $42M series B to advance Alzheimer’s candidate (release)

Creative collage illustration of financial business. Two businessmen shaking hands for partners agreement. Conceptual illustration of success deal, corporate ethic, connection. iStock, Evorona Shanghai-based LaNova Medicines—which has captured the attention of some of the biggest Western pharmas—will be folded into fellow Chinese company Sino Biopharmaceutical in a deal worth up to $951 million. LaNova Medicines has been acquired by fellow Chinese biotech Sino Biopharmaceutical in a deal worth up to $951 million. In a Tuesday regulatory filing on the Hong Kong exchange, Sino—which already holds a 4.91% stake in LaNova—revealed that it will purchase the remaining 95.09% equity interest for a net payment of nearly $501 million. This sum excludes LaNova’s current estimated cash and bank deposits amounting to $450 million. Completion of this agreement is subject to certain conditions under Chinese law, including shareholder approval and relevant legal clearances. The transaction will close within 30 business days after all conditions have been met. In recent years, LaNova has captured the attention of some of the biggest players in the Western pharma market. In November last year, LaNova secured a $588 million upfront payment from Merck in exchange for global rights to its investigational bispecific antibody LM-299, being developed for solid tumors. Merck also pledged up to $2.7 billion in technology transfer, development, regulatory and commercialization milestone payable across several cancer targets. LM-299 is part of an emerging class of oncology therapies targeting both the PD-1 and VEGF pathways. This approach prevents tumors from evading the immune system’s anti-cancer activity and from forming new blood vessels to supply themselves with nutrients. Outside of Merck, LaNova has deals with other Western pharmas as well. In May 2023, the Shanghai-based biotech signed a partnership with AstraZeneca focused on the antibody-drug conjugate LM-305, a potentially first-in-class ADC targeting the GPRC5D protein, for multiple myeloma. The deal netted LaNova $55 million upfront and up to $545 million in milestones, plus tiered royalties. Sino’s acquisition of LaNova brings it a pipeline full of other ADCs and bispecific antibodies. Those include late-stage assets like LM-302, an ADC for gastric cancers, and LM-108, a monoclonal antibody against tumors with high microsatellite instability, both in Phase III trials. LaNova also has another eight molecules in preclinical, IND-enabling studies.