Jiangsu Hengrui Pharmaceuticals Co., Ltd has announced a significant licensing agreement with Merck KGaA, a prominent global science and technology company headquartered in Darmstadt, Germany. This collaboration marks Hengrui's inaugural strategic partnership with a major international pharmaceutical entity. The agreement encompasses the potential for an exclusive license for their groundbreaking Claudin-18.2 antibody drug conjugate (ADC) SHR-A1904, as well as the next-generation potent and selective PARP1 (poly (ADP-ribose) polymerase 1) inhibitor, HRS-1167.
As per the terms of the agreement, Merck KGaA will make an upfront payment of €160 million to Hengrui Pharma. Additionally, Hengrui Pharma stands to receive payments for technology transfer and an option exercise for the Claudin-18.2 ADC, amounting to a potential €90 million. Furthermore, upon meeting specific development, regulatory, and commercial milestones, Hengrui may be entitled to royalty payments based on the net sales of these products by Merck KGaA. The total potential payments could reach €1.4 billion, with royalty rates in the double digits.
Merck KGaA will gain exclusive rights to develop, manufacture, and market HRS-1167 globally, excluding mainland China. They will also hold an exclusive option to handle the development, production, and commercialization of SHR-A1904 worldwide, again excluding mainland China. Additionally, there is an option for Merck KGaA to jointly promote HRS-1167 and SHR-A1904 in mainland China.