Merck & Co. has entered into a partnership and exclusive license agreement with Kelun-Biotech to develop an investigational antibody drug conjugate (ADC) to treat solid tumors.

The deal, of which Kelun-Biotech (a holding subsidiary of Sichuan Kelun Pharmaceutical) will receive an upfront payment of $35 million and has the potential to get further commercial payments totalling up to $901 million dependent on specific milestones.

Earlier this year, Merck (known as MSD outside of North America) chose to exercise an option for worldwide rights (excluding Hong Kong, Macau, Mainland China, and Taiwan) for an investigational TROP2 targeting ADC, SKB-264.

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SKB-264 is being evaluated in a Phase III clinical trial for the treatment of metastatic triple-negative breast cancer as well as Phase II trials for non-small cell lung cancer and advanced solid tumors. As part of the deal, Kelun-Biotech and Merck will work together on specific early clinical development plans, including looking at SKB-264 as a monotherapy and in combination with KEYTRUDA (pembrolizumab) for advanced solid tumors.

“The collaboration with Kelun-Biotech strengthens and diversifies MSD’s oncology pipeline as we seek to further the potential of ADCs to provide more treatment options and improve outcomes for people with cancer,” said Eric Rubin, senior vice president, oncology early development, MSD Research Laboratories.

“We look forward to advancing this collaboration with the Kelun-Biotech team.”

According to the Wall Street Journal in June, Merck was reportedly eyeing up the acquisition of ADC Seagen. While this deal has not been announced, various media outlets say that talks are supposedly ongoing.