Merck is making its first move into one of the hotter corners of biotech, by forming a partnership to make “smart bomb” antibody drugs with San Diego-based Ambrx.
The Whitehouse Station, NJ-based pharmaceutical giant (NYSE: [[ticker:MRK]]) has agreed to pay Ambrx $15 million upfront, another $288 million in milestone payments, and an undisclosed royalty rate on worldwide sales of any drugs that might come from the collaboration. For that, Merck is getting access to Ambrx’s technology for combining targeted antibody drugs with potent toxins to give them more wallop against diseased cells. Merck scientists will contribute some undisclosed biological targets they are interested in, and Ambrx’s job will be help discover some “empowered” antibodies, aka “antibody drug conjugates,” to hit those targets.
Merck has made its name over the decades for its prowess in making synthetic small-molecule compounds as drugs, which can conveniently be given as oral pills. But now that patents are expiring on many of the aging hits, analyst estimates are that eight of the world’s top 10 drugs in 2014 will be biotech drugs, which are larger molecular structures that are usually injected. These require very different scientific skills, and Merck has been building a portfolio through a variety of ways, including its acquisitions of Kenilworth, NJ-based Schering-Plough, Lebanon, NH-based GlycoFi, and Beverly, MA-based SmartCells. More recently, it struck a partnership with Vancouver, BC-based ZymeWorks to make “bispecific” antibodies that can hit more than one molecular target, plus today’s deal with Ambrx to create more potent antibodies.
“We feel it fits in very well with our whole biologics strategy, which includes trying to deliver best in class biologics using platform approaches,” says Deborah Law, the vice president of biologics discovery at Merck Research Laboratories in Palo Alto, CA. “We’ve been working hard to identify those platforms that are significantly better than the standard of care.”
Simon Allen, Ambrx’s chief business officer, said the deal is important to his company partly because of the cash it provides, but also because of the technical validation. He stressed that while most antibody drug conjugates of today are being tested for cancer, Ambrx’s technology should enable it to make drugs that are potent and safe enough to be given for chronic, non-life threatening conditions that affect millions of more people.
“Merck has recognized the value and importance of taking biologic drug conjugates outside of oncology,” Allen says. “We think it’s a natural evolution for biologics. Merck has the vision, and we are thrilled to be working with them. Success in this collaboration will open up a whole new field of opportunity.”
Ambrx and Merck are certainly not strangers, and they have one very important connection between the two of them. The prominent chemist Peter Schultz, who founded Ambrx in 2003 and remains on its board of directors, was recently recruited to run a new $90 million Merck-funded nonprofit research center in San Diego called Calibr. Ambrx and Merck also had a partnership in the past to
