Eli Lilly and Co. announced Tuesday morning it has signed a licensing agreement with Dutch biotech Merus N.V. to help it develop up to three antibody therapies for cancer, a deal that could eventually be worth up to $1.6 billion for the small company.
Merus specializes in so-called CD3 engaging T-cell therapies, a growing area of cancer research, based on immunotherapy, or using the immune system’s T cells to find and shrink tumors. T cells help dictate the body’s response to foreign objects, including disease.
Lilly will pay Merus $40 million up front, and buy $20 million of the biotech’s stock. Merus is also eligible to receive up to $540 million per product, along with tiered royalties, if Lilly successfully commercializes a therapy from the collaboration.
Merus, based in Utrecht, the Netherlands, is a 17-year-old clinical stage biotech with 98 employees that develops therapeutics to treat cancer patients, according to Bloomberg. The company has more than 175 experimental, lab-created antibodies with a wide range of characteristics for fighting cancer in different kinds of patients.
“Merus has built a differentiated platform and one that we believe can enable us to create bispecific antibody therapies with wider therapeutic indexes than those available today,” said Jacob Van Naarden, chief operating officer of Lilly’s Loxo Oncology division, in a written statement. “We look forward to working closely with Merus to develop new potential medicines for patients with cancer.”
Under the deal, Merus will lead discovery and early-stage research activity and Lilly’s Loxo Oncology division will be responsible for additional research, development and commercialization activities.