Blog Coverage Merus Announced a Multibillion Dollar Collaboration Agreement with Incyte

LONDON, UK / ACCESSWIRE / December 22, 2016 / Active Wall St. blog coverage looks at the headline from Dutch biopharmaceutical company Merus N.V. (NASDAQ: MRUS) and Incyte Corp. (NASDAQ: INCY) as both companies announced on December 21, 2016, that they have entered into a collaboration agreement, which grants Incyte exclusive rights for up to eleven bispecific antibody research programs, including two of Merus’ current preclinical immuno-oncology discovery programs. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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Reid Huber, Ph.D., Incyte’s Chief Scientific Officer commented on the agreement:

“This collaboration with Merus expands our large molecule discovery capabilities into an innovation-rich area of research, creating additional opportunities for us to deliver on our commitment to improving and extending the lives of patients with cancer and other serious diseases.”

Ton Logtenberg, Ph.D., Chief Executive Officer of Merus shared his thoughts by stating that:

“This transformative, global collaboration further underscores the potential of Merus’ Biclonics® technology platform and establishes a strong relationship with Incyte, a leader in innovative drug development,”

Terms of the Collaboration

Under the terms of the collaboration, Incyte will pay Merus an upfront payment of $120 million. Additionally, Incyte will purchase 3.2 million shares of Merus’ stock at $25 per share, for a total equity investment of $80 million. The collaboration focuses on the research, discovery and development of bispecific antibodies utilizing Merus’ proprietary Biclonics® technology platform.

Incyte and Merus have agreed to collaborate on the development and commercialization of up to 11 bispecific antibody programs. For one current preclinical program, Merus will retain all rights to develop and commercialize approved products in the United States, and Incyte will develop and commercialize approved products arising from the program outside the United States. Following any regulatory approval of a product candidate for this particular pre-clinical program, the companies have agreed to pay tiered royalties ranging 6% to 10% on net sales of products in their respective territories.

As per the collaboration terms, Merus will have the option to co-fund development of product candidates arising from two other programs. For the program where Merus exercises its co-development option, the Company will share 35% of global development costs and in return will received a 50% share of US profits and losses and tiered royalties ranging from 6% to 10% on ex-US sales from Incyte for these programs. Merus also has the right to elect to provide up to 50% of detailing activities for product candidates arising from one of these programs in the United States.

For the other remaining eight programs, Incyte has agreed to independently fund all development and commercialization activities. For these programs, Merus will be eligible to receive potential development, regulatory, and sales milestone payments of up to $350 million per individual program that can raise upto an aggregate milestone of approximately $2.8 billion, if the entire eight programs achieve development, regulatory, and sales milestones in all territories. Merus will also be eligible to receive tiered royalties ranging from 6% to 10% on global sales of any approved products under these eight programs.

Merus will retain rights to both of its clinical candidates and MCLA-158, as well as its technology platform and future programs emerging from Merus’ platform that are outside the scope of this agreement. The transaction is expected to close in Q1 2017, subject to the early termination or expiration of any applicable waiting periods under the Hart-Scott Rodino Act and customary closing conditions.

Stock Performance

Following the announcement on December 21st, 2016, Merus’ share price finished yesterday’s trading session at $20.22, soaring 42.90%. A total volume of 808.65 thousand shares exchanged hands, which was higher than the 3 months average volume of 6.26 thousand shares. The stock has rallied 89.86% and 157.25% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have skyrocketed 101.39%. The stock currently has a market cap of $333.43 million.

At the closing bell, on the same day, Incyte’s stock declined 2.40%, ending the trading session at $99.76. A total volume of 1.01 million shares were traded at the end of the day. In the last three months and previous six months, shares of the company have advanced 11.75% and 22.17%, respectively. The stock currently has a market cap of $19.08 billion.

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