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Merck KGaA, Hengrui Pharmaceuticals Ink Oncology Drug Licensing Deal Potentially Worth $1.48B

NEW YORK – Merck KGaA and Jiangsu Hengrui Pharmaceuticals on Monday announced a licensing deal focused on Hengrui's PARP inhibitor HRS-1167 and potentially its Claudin-18.2 inhibitor SHR-A1904.

Under the terms of the deal, Darmstadt, Germany-based Merck KGaA will pay €160 million ($169 million) upfront for exclusive rights to develop, manufacture, and commercialize the PARP inhibitor outside of China, and it may pay up to €90 million for an option to exclusively license the CLDN18.2 antibody-drug conjugate. Merck KGaA may also pay Hengrui additional milestone and tiered royalties up to double digits, potentially totaling up to €1.4 billion ($1.48 billion) for the full deal.

Hengrui believes that its PARP inhibitor HRS-1167 has advantages over existing drugs in its class, in part because of its higher selectivity and affinity for PARP1 and its DNA trapping. The firm is currently assessing the drug in a Phase I trial for multiple cancer types, including ovarian, breast, pancreatic, and prostate cancers as well as other cancers with homologous recombination repair gene mutations.

The firm is evaluating SHR-A1904, meanwhile, in Phase I trials for patients with advanced solid tumors with confirmed CLDN18.2 expression.

Though Merck KGaA's licensing rights will apply to regions outside of mainland China, the firm will have exclusive rights to co-promote both the PARP and CLDN18.2 inhibitors in China.

"This partnership with Hengrui fully aligns with both our external innovation ambition and our oncology research and development strategy by diversifying our robust international pipeline in our focus areas of DNA damage response inhibition and antibody-drug conjugates," Danny Bar-Zohar, the chief medical officer for Merck KGaA's healthcare business and its head of R&D, said in a statement. "The synergies of these assets with our portfolio offer broad potential for development and the opportunity to advance more therapeutic options for patients with difficult-to-treat cancers."