Merck Invests $3.288 Billion for Exclusive Rights to New Drug LM-299

On November 14, Merck announced that it has reached an agreement with Lixin Pharmaceutical to obtain exclusive global development, production and commercialization rights for Lixin Pharmaceutical's new PD-1/VEGF bispecpecic antibody LM-299.

LM-299 is an in-development PD-1/VEGF bispecial antibody, consisting of an anti-VEGF antibody connected to two C-terminal single-domain anti-PD-1 antibodies. This innovative therapeutic approach is designed to block both immune checkpoint PD-1/PD-L1 and VEGF/VEGFR signaling pathways, thereby achieving a synergistic anti-tumor mechanism based on "tumor immunity + anti-angiogenesis". The Phase I clinical trial of LM-299 is enrolling patients in China.

Under the terms of the agreement, Lixin has granted Merck an exclusive license to develop, manufacture and commercialize LM-299 worldwide. Lixin will receive an initial payment of $588 million. Based on the progress of technology transfer, development, approval and commercialization of LM-299 multiple indications, Lixin Medicine will also receive milestone payments of up to $2.7 billion.

The transaction is expected to close in the fourth quarter of 2024. Following the closing of the transaction, Merck expects to incur a pre-tax charge of $588 million, which will be recorded in both GAAP and non-GAAP financial data during the closing quarter and the impact of the charge on earnings per share (EPS) will be announced at that time.