Merck Completes Acquisition of Harpoon Therapeutics, Inc.
Merck (MRK) acquires Harpoon Therapeutics, broadening its oncology pipeline with T-cell engagers like MK-6070 targeting DLL3. MK-6070 is in Phase 1/2 trials for small cell lung cancer (SCLC) and neuroendocrine tumors. Merck records a $650 million charge for the acquisition, impacting non-GAAP EPS by $0.26 per share for 2024.
Positive
Merck acquires Harpoon Therapeutics, expanding its oncology pipeline with T-cell engagers like MK-6070 targeting DLL3.
MK-6070 is being evaluated in Phase 1/2 trials for small cell lung cancer (SCLC) and neuroendocrine tumors.
The acquisition results in a $650 million charge to R&D expense and impacts non-GAAP EPS by $0.26 per share for 2024.
The acquisition of Harpoon Therapeutics by Merck represents a strategic move to enhance their oncology pipeline, particularly with the addition of novel T-cell engagers like MK-6070, which targets DLL3. DLL3 is an inhibitory Notch ligand prevalent in small cell lung cancer and neuroendocrine tumors, making it a promising target for therapy. The Orphan Drug Designation granted by the FDA for MK-6070 underscores its potential in a treatment area with high unmet medical need. The ongoing Phase 1/2 clinical trial will be a key focus, as the results will determine the safety, tolerability and efficacy of this investigational drug, both as a monotherapy and in combination with atezolizumab.
From a research perspective, the success of MK-6070 could lead to significant advancements in the treatment of SCLC, a cancer type with limited treatment options. Additionally, the acquisition brings other early-stage assets to Merck's portfolio, which may yield long-term benefits if they progress favorably through clinical development. However, the immediate financial impact includes a substantial R&D expense charge, which investors should note as it affects the non-GAAP EPS projections.
Merck's acquisition of Harpoon Therapeutics is financially material, with a $650 million R&D charge that is significant enough to impact non-GAAP EPS by approximately $0.26 per share. This figure was already accounted for in Merck's full-year 2024 financial outlook, indicating that the company has integrated this acquisition into its financial planning. The fact that this transaction is treated as an asset acquisition rather than a business combination is also noteworthy, as it reflects on the accounting treatment and potential amortization of intangible assets.
For investors, the key takeaway is that Merck is actively investing in its oncology pipeline, which could drive future growth but also carries inherent risks associated with clinical trials and drug development. The removal of Harpoon's common stock from public trading consolidates the potential future revenues from Harpoon's pipeline under Merck's financials, which could be a long-term value driver if the candidates prove successful in clinical trials.
The strategic acquisition of Harpoon Therapeutics by Merck is indicative of the ongoing consolidation in the pharmaceutical industry, especially in the oncology sector. Merck's commitment to expanding its immuno-oncology portfolio is aligned with current market trends that emphasize personalized and targeted therapies. By acquiring Harpoon, Merck not only gains access to a novel portfolio of T-cell engagers but also sends a strong signal to the market about its intention to remain at the forefront of oncology research and development.
The long-term market implications of this acquisition depend on the clinical success of the pipeline candidates. If successful, Merck could secure a competitive edge in the immuno-oncology market. However, given the high attrition rates in oncology drug development, there is a significant risk that these investments may not yield the expected returns. Market analysts will closely monitor the progress of these assets through clinical trials to better understand the potential impact on Merck's market position.
03/11/2024 - 08:15 AM
Acquisition broadens oncology pipeline with a portfolio of novel T-cell engagers including HPN328 (MK-6070), an investigational delta-like ligand 3 (DLL3) targeting T-cell engager
RAHWAY, N.J. --(BUSINESS WIRE)--
Merck (NYSE: MRK), known as MSD outside of the United States and Canada , today announced the completion of the acquisition of Harpoon Therapeutics, Inc. (Nasdaq: HARP). Harpoon is now a wholly-owned subsidiary of Merck, and Harpoon’s common stock will no longer be publicly traded or listed on the Nasdaq Stock Market.
“We continue to augment and diversify our oncology pipeline with innovative approaches to help people with cancer worldwide,” said Dr. Dean Y. Li, president, Merck Research Laboratories. “We are pleased to welcome our Harpoon colleagues to Merck and look forward to working together to advance a novel portfolio of T-cell engagers, including MK-6070.”
Harpoon’s lead candidate, MK-6070 (formerly known as HPN328), is a T-cell engager targeting delta-like ligand 3 (DLL3), an inhibitory canonical Notch ligand that is expressed at high levels in small cell lung cancer (SCLC) and neuroendocrine tumors. The safety, tolerability and pharmacokinetics of MK-6070 is currently being evaluated as monotherapy in a Phase 1/2 clinical trial (NCT04471727 ) in certain patients with advanced cancers associated with expression of DLL3. The study is also evaluating MK-6070 in combination with atezolizumab in certain patients with SCLC. In March 2022, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation to MK-6070 for the treatment of SCLC.
Additional pipeline candidates include HPN217, a T-cell engager targeting B-cell maturation antigen (BCMA), currently in Phase 1 clinical development for the treatment of patients with relapsed/refractory multiple myeloma, and several preclinical stage candidates, including HPN601, a conditionally activated targeting epithelial cell adhesion molecule (EpCAM) for the treatment of certain patients with EpCAM expressing tumors.
Transaction details
Under the terms of the merger agreement, Merck, through a subsidiary, has acquired all outstanding shares of Harpoon. As previously disclosed, this transaction is being accounted for as an asset acquisition. Merck is recording a non-tax deductible charge to R&D expense of approximately $650 million $0.26
Merck’s focus on cancer
Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, the potential to bring new hope to people with cancer drives our purpose and supporting accessibility to our cancer medicines is our commitment. As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the largest development programs in the industry across more than 30 tumor types. We also continue to strengthen our portfolio through strategic acquisitions and are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers. For more information about our oncology clinical trials, visit https://www.merckclinicaltrials.com/ .
About Merck
At Merck, known as MSD outside of the United States and Canada , we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter) , Facebook , Instagram , YouTube and LinkedIn .
Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J. , USA
This news release of Merck & Co., Inc., Rahway, N.J. , USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2023, and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov ).
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Source: Merck & Co., Inc.
What is the ticker symbol for Merck?
The ticker symbol for Merck is MRK.
What is the lead candidate acquired by Merck from Harpoon Therapeutics?
The lead candidate acquired by Merck from Harpoon Therapeutics is MK-6070, targeting DLL3.
What clinical trial phase is MK-6070 currently in?
MK-6070 is currently being evaluated in a Phase 1/2 clinical trial (NCT04471727) for certain patients with advanced cancers associated with expression of DLL3.
What is the impact of the acquisition on Merck's non-GAAP EPS for 2024?
The impact of the acquisition on Merck's non-GAAP EPS for 2024 is approximately $0.26 per share.
What is the focus of Merck in terms of cancer treatment?
Merck's focus is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide.
What is Merck's commitment regarding accessibility to cancer medicines?
Merck is committed to supporting accessibility to its cancer medicines.
How is Merck strengthening its oncology portfolio?
Merck is strengthening its portfolio through strategic acquisitions and prioritizing the development of promising oncology candidates.
What is the goal of Merck in terms of oncology?
Merck's goal is to bring new hope to people with cancer by translating breakthrough science into innovative oncology medicines.
