Genmab is continuing to build up its pipeline of wholly owned late-stage cancer assets, this time paying $8 billion for Netherlands-based Merus and its bispecific antibody.
Analysts praised the “best-in-disease profile” of the drug, called petosemtamab, back in May after Merus unveiled a 79% 12-month survival rate in a phase 2 trial of patients with PD-L1-positive recurrent or metastatic head and neck squamous cell carcinoma.
Petosemtamab binds EGFR and LGR5 on cancer cells. EGFR is an established cancer drug target, while LGR5 is a novel target. By hitting both receptors, Merus believes the bispecific can inhibit EGFR signaling, drive EGFR degradation via LGR5 and engage the immune system.
Genmab has blockbuster plans for petosemtamab. Once the candidate has completed a pair of ongoing phase 3 trials—which are due to read out next year—the biopharma is hoping to take petosemtamab to market in 2027, according to a Sept. 29 release.
If it can get the green light for approval from regulators, Genmab envisages $1 billion in annual sales by 2029, with “multi-billion-dollar annual revenue potential thereafter.”
“The proposed acquisition of Merus clearly aligns with our long-term strategy. It has the potential to significantly accelerate our evolution into a global biotechnology leader by providing durable growth for the company well into the next decade,” Genmab CEO Jan van de Winkel, Ph.D., said in the release.
“Petosemtamab has the potential to be a transformational therapy for patients living with head and neck cancer,” van de Winkel added. “With our proven track record of success, both in clinical development and in commercialization, we are confident that we will be able to unlock the promise of petosemtamab.”
Genmab is paying $97 per share of Merus—a 41% increase on the biotech’s share price of $68.89 at close of trading Friday. The sale price represents a transaction value of about $8 billion, according to Genmab.
The Danish biopharma put today’s deal in the context of its longer-term plan to “shift to a wholly owned model.” This strategy was set out to Fierce by Genmab’s chief financial officer last year, who explained that the company was on a journey “from a royalty model to a 50/50 kind of co-co model, to now something that’s approaching a much more 100% own[ership] model.”
Genmab made its name with the Johnson & Johnson-partnered multiple myeloma blockbuster Darzalex but has been steadily amassing its own pipeline that includes acasunlimab, a PD-L1x4-1BB bispecific antibody Genmab had been working on with BioNTech until the German biotech decided this year to discontinue the program. There’s also rinatabart sesutecan (Rina-S), an antibody-drug conjugate at the center of Genmab’s $1.8 billion cash acquisition of ProfoundBio last year.
Genmab said petosemtamab would be a “compelling strategic fit” for this late-stage pipeline as well as aligning with “Genmab’s expertise in antibody therapy development and commercialization in oncology.”
The deal means the biopharma now has four of its own programs that could potentially bring new drugs to market by 2027.
Today’s deal was viewed favorably by industry observers, with William Blair analysts pointing to predicted peak sales of $3 billion to $4 billion for petosemtamab in head and neck cancer alone as proof that the acquisition is a “positive” for Genmab.
“We believe investors will be focused on how Genmab views the market opportunity in metastatic squamous cell carcinoma of the head and neck, and whether other indications are included in Genmab’s development plans for petosemtamab,” the analysts added.
Meanwhile, analysts at Citi described the acquisition as “a storybook conclusion to Merus' journey as a public company and makes overwhelming sense based on geographical fit and overlap in domain expertise.”