Dive Brief:
- Antibody drug specialist Genmab on Monday agreed to acquire Dutch biotechnology company Merus in an $8 billion deal centered around a drug that’s shown potential treating head and neck cancer.
- Per deal terms, Genmab will pay $97 per share in cash to acquire Merus, representing a 41% premium to the biotech’s closing price on Friday of about $68.
- The deal hands Genmab a drug called petosemtamab and that’s in late-stage testing for head and neck cancer. Phase 2 data presented at the American Society of Clinical Oncology meeting in May showed that the drug helped extend survival when used alongside Merck & Co.’s immunotherapy Keytruda, a result that boosted shares and suggested it could change care for those tumors.
Dive Insight:
Merus had already seen its share value jump by more than 50% since late May, when its ASCO presentation showed that petosemtamab kept nearly 80% of study participants with advanced head and neck squamous cell carcinoma alive for at least a year.
The results positioned Merus’ drug, a type of bispecific antibody targeting the proteins EGFR and LGR5, to be a “market leader in the multi-blockbuster head-and-neck cancer treatment landscape,” William Blair analyst Matt Phipps wrote in a research note on Monday.
Genmab is gambling on that outcome. While Merus’ drug showed potential in Phase 2, those findings will need to be duplicated in a late-stage study comparing a petosemtamab-Keytruda combination to Keytruda alone. Results are expected in 2026. Genmab said Monday that the drug could eventually book $1 billion in yearly sales by 2029 and have multibillion-dollar annual sales potential afterwards. Phipps is projecting $3 billion to $4 billion in annual peak sales in head and neck cancer alone.
Petosemtamab “has the potential to be a transformational therapy for patients living with head and neck cancer,” said Genmab CEO Jan van de Winkel, adding that the drug could provide “durable growth … well into the next decade.”
The drug is also being evaluated for colorectal cancer. Phase 2 results had been expected shortly, leading some investors to question the timing of the deal, Phipps wrote Monday.
The asset adds to a large portfolio of antibody drugs for Genmab, which codeveloped the multiple myeloma therapy Darzalex with Johnson & Johnson, the cervical cancer medicine Tivdak with Seagen and the lymphoma drug Epkinly with AbbVie.
The company has recently started turning to deals to boost its pipeline. Last year, it paid $1.8 billion to acquire antibody-drug conjugate developer ProfoundBio.
