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Merck KGaA Gives Vertex Rights to Two Gene-Editing Compounds

Zacks Equity Research

German drug company Merck KGaA MKGAF announced that it has given Vertex Pharmaceuticals Incorporated VRTX exclusive rights to two DNA-dependent protein kinase (DNA-PK) inhibitors for use in gene editing application for six specific genetic disease indications.

In addition to milestones and royalties on future net sales, Merck KGaA will receive an undisclosed upfront payment. The company retains the rights to both compounds in all other disease areas, including oncology. Moreover, the company holds back the rights to develop both these compounds in-house, or out-license them to future partners in the gene editing field outside of the six specified disease areas. Vertex has the option to add indications to the license grant.

Both the molecules — M9831 and an additional pre-clinical compound — were acquired by Merck KGaA in 2017 in a licensing agreement from Vertex and are part of the former’s DNA Damage Response (DDR) inhibitors pipeline portfolio. Merck KGaA aims to be a leader in developing DDR molecules. The company sees the potential benefit of DNA-PK in genetic diseases through the enhancement of its CRISPR/Cas9-mediated gene editing.

Share price pf Merck KGaA has decreased 8.2% in the past year compared with the industry’s decline of 25.1%.

We remind investors that last month, Merck KGaA announced a strategic alliance in the CRISPR/Cas9 rodent model market with France-based biotechnology company genOway. Through an exclusive worldwide license of Merck’s foundational CRISPR integration patents, genOway will develop new models and solutions, allowing non-profit and for-profit scientists to use CRISPR/Cas9 technology.

We remind investors that last month, Merck KGaA also inked a deal with Intrexon Corporation XON for the development of Chimeric Antigen Receptor T-cell (CAR-T) therapies. Per the agreement, Merck KGaA will assign its exclusive CAR-T development rights to Intrexon. Merck KGaA will receive shares of Intrexon common stock, valued at $150 million, in exchange for assigning Intrexon its CAR-T rights. The agreement enables Merck KGaA to maintain an investment in the rapidly advancing oncology field of CAR-T while focusing on its R&D efforts.


Merck KGaA Price


Merck KGaA Price | Merck KGaA Quote

Zacks Rank and Stocks to Consider

Merck KGaA currently does not carry any Zacks Rank.

A better-ranked stock is Eli Lilly and Company LLY carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lilly’s earnings per share estimates have moved up from $5.47 to $5.58 for 2018 and from $5.78 to $5.87 for 2019 in the past 90 days. The company delivered a positive earnings surprise in all the trailing four quarters, the average being 10.03%.

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