GlaxoSmithKline plc (NYSE: GSK) (GSK) has entered into a collaboration agreement with Merck KGaA, Darmstadt, Germany to study M7824, an investigational bifunctional fusion protein immunotherapy that is currently in clinical development for multiple difficult-to-treat cancers.
Under the terms of the agreement, GSK will pay Merck KGaA $342.3 million (€300 million) upfront. Merck KGaA is also eligible for up to $3.31 billion (€2.9 billion) in milestone payments. The potential deal value could amount to $4.23 billion (€3.7 billion). Both companies will jointly conduct development and commercialization with all profits and costs from the collaboration being shared equally on a global basis.
For GSK, this alliance is another step in the company’s strategy to strengthen its immunotherapy pipeline to fight cancer. This deal follows the company’s recent acquisition in 2018 of Tesaro Inc., an oncology-focused company. That deal cost GSK $5.1 billion, a 23x price revenue multiple.
Immunotherapy platforms have drawn a good deal of attention lately. Just last month, Atara Biotherapeutics, Inc. (NASDAQ: ATRA) bought the rights to a mesothelin-targeted chimeric antigen receptor T-cell (CAR T) immunotherapy for treatment against cancer and solid tumors from Memorial Sloan Kettering Cancer Center. No financial terms were disclosed.
