The partnership focuses on the research, discovery and development of bispecific antibodies using the Biclonics technology platform of Merus.
Under the agreement signed in December last year, Incyte will gain exclusive rights for up to 11 bispecific antibody research programmes, including Merus’ two existing preclinical immuno-oncology discovery programmes.
Merus CEO Ton Logtenberg said: “We are pleased to have closed this transformative, global research collaboration and look forward to working with Incyte to develop novel bispecific antibodies for the treatment of cancer and other serious diseases.
“In addition to expanding our pipeline, this agreement strengthens our balance sheet, delivering added resources and strategic flexibility as we advance Merus’ lead assets in the clinic.”
Incyte will make an upfront payment of $120m to Merus and purchase 3.2 million shares of Merus stock for a total equity investment of $80m.
For one current preclinical programme, Merus will retain all rights to develop and commercialise an approved product in the US.
Furthermore, the company has an option to co-fund the development of product candidates that arise from two other programmes.
For the remaining eight, it will receive potential development, regulatory and sales milestone payments of up to $350m per programme, for an aggregate milestone opportunity of approximately $2.8bn upon achieving all milestones.
The company will also be eligible for tiered royalties ranging from 6% to 10% on global sales.