According to recent reports from the pharmaceutical and biotech industry, Merck announced on the 28th of last month that it had signed an exclusive licensing agreement with SciBrunch Therapeutics for the global development, manufacturing, and commercialization of “SPR2015,” an oral KRAS G12D inhibitor. Cybrunch Therapeutics stands to receive up to $2.13 billion (approximately 2.87 trillion won), including an upfront payment of $400 million (approximately 540 billion won) and milestones tied to development, regulatory approval, and commercialization. The upfront payment amounts to approximately 18.8% of the total contract value.
Merck also stated that it will recognize the $400 million upfront payment as a pre-tax expense in its third-quarter earnings this year. The company noted that this will result in a reduction of approximately $0.13 in earnings per share. While technology licensing agreements typically only disclose the total contract value and often keep the upfront payment amount and payment schedule confidential, Merck has provided specific details regarding the upfront payment amount and its plan for recognizing the expense alongside the announcement of the licensing agreement.
SPR2015 is a small-molecule inhibitor based on a molecular glue mechanism that targets the KRAS G12D mutation. KRAS G12D is one of the cancer gene mutations frequently observed in solid tumors such as lung, colorectal, and pancreatic cancers. Merck explained that SPR2015 demonstrated nanomolar-level proliferation inhibition in KRAS G12D-mutated cell lines and confirmed antitumor activity when administered as a monotherapy in cell-derived and patient-derived xenograft (CDX/PDX) models. However, it remains a preclinical-stage candidate drug for which safety and efficacy data from human trials are not yet available.
In that regard, this agreement is comparable to previous cases of Korean companies exporting early-stage anticancer candidate technology.
First, last October, AimedBio transferred global rights to “ODS025,” an antibody-drug conjugate (ADC) candidate for solid tumors, to Boehringer Ingelheim in Germany. Although ODS025—which had not yet entered clinical trials—was also recognized for its potential value, the maximum contract value was $991 million (approximately 1.4 trillion won). This amounts to approximately 46.5% of the total deal value for SPR2015. The size of the upfront payment was also not disclosed. ODS025 has now entered the global clinical development phase after receiving approval from the U.S. Food and Drug Administration (FDA) this year for its Phase 1 clinical trial plan.
In terms of the upfront payment alone, Hanmi Pharmaceutical’s recent technology export is also noteworthy. Last August, Hanmi Pharmaceutical agreed to receive an upfront payment of $190 million (approximately 262.9 billion won) upon transferring “HM17321,” a candidate compound for metabolic diseases such as obesity and type 2 diabetes, to Genentech, a member of the Roche Group. The total contract value is $2.305 billion (3.5 trillion won), which is larger than that of SPR2015.
However, HM17321 is a candidate drug that has completed Phase 1 clinical trials. In terms of the upfront payment—which is a guaranteed amount—SPR2015, which is still in the preclinical stage, received a larger sum.
A biotech industry official stated, “The fact that Merck offered a substantial upfront payment for an asset prior to clinical trials indicates that it highly values SPR2015’s competitiveness and development potential,” adding, “I believe this means the candidate drug possesses distinct advantages compared to those of other companies and was able to strongly demonstrate its scalability for subsequent development based solely on preclinical data.”
It is noteworthy that this agreement was announced at a time when Merck needed to reduce its reliance on Keytruda and secure a next-generation oncology pipeline. The assessment is that Cybrunch Therapeutics’ candidate precisely met that need at a time when Merck was seeking the “next Keytruda.” Merck anticipates that the key substance patent for Keytruda in the U.S. will expire in 2028, opening the door to potential biosimilar competition.
Although KRAS has long been considered a difficult target for drug development, there has recently been active development of targeted therapies for specific mutation types in this area. In particular, while there are a number of competing candidates for KRAS G12D, SPR2015—which utilizes a molecular adhesive approach—appears to have been highly valued for its potential to offer a different approach from existing methods. In its press release, Merck also described SPR2015 as an asset that complements and diversifies its portfolio of precision-targeted anticancer candidates.
This also holds implications for domestic companies. Another biotech industry official stated, “While technology licensing agreements tend to attract more attention when the total amount is large, most of these are milestone payments contingent on clinical, regulatory, and sales achievements,” adding, “To secure a higher upfront payment—which better reflects the transaction’s actual value than the total contract amount—companies must clearly demonstrate nonclinical data and the distinctiveness of their target from the earliest stages.”
