Japanese pharmaceutical company Daiichi Sankyo Co. will receive payments totaling up to $22 billion from U.S. counterpart Merck & Co. in a tie-up deal covering the development and commercialization of three cancer therapies, the two firms said Friday.
Known as antibody-drug conjugates, the drugs are in different stages of clinical development and are expected to be effective in the treatment of multiple types of solid tumors including those in lungs and ovaries, according to their press releases.
Unlike chemotherapy, antibody-drug conjugates target tumor cells while leaving healthy cells unharmed.
Under the agreement, Merck will pay Daiichi Sankyo $4 billion upfront, $1.5 billion in a deferred payment, and additional payments totaling up to $16.5 billion depending on the drugs' success in sales.
The company will jointly sell the drugs worldwide, but Daiichi Sankyo will retain exclusive rights for the Japanese market and will be responsible for all manufacturing and supply.
The three drugs "have multi-billion dollar worldwide commercial revenue potential" for the two companies approaching the mid-2030s, according to the company releases.
