Blackstone likely might negotiate for / make higher returns, if it were to bet this $700 million at a small biotech shop — one that desperately needed the capital… but the bet on Merck is a very safe one, in general — where the flame out risk is much smaller than at a nascent biotech (and the ability to course-correct along the way… is more substantial).
And so, this may well become a “new-ish” model — with private equity / huge asset managers being willing to bet directly on an R&D program (primarily at a very long established public pharmaco), in return for quite a bit more yield than just the sizeable Merck common stock quarterly dividend checks. We shall see — but here is Fierce reporting on it all, this morning:
…Merck & Co. began Tuesday with back-to-back deals, revealing separate agreements to pay $150 million upfront for full control of an early-phase asset and pocket $700 million to support an expansive pivotal oncology push.
The influx of cash comes from Blackstone Life Sciences, which has agreed to fund a portion of the cost of developing sacituzumab tirumotecan (sac-TMT) throughout 2026. . . .
Merck recently started its 15th global phase 3 trial of the antibody-drug conjugate (ADC). That broad bet reflects a belief that the TROP2-directed ADC can become a “workhorse” for Merck as it prepares for the arrival of biosimilar Keytruda copies, Marjorie Green, M.D., Merck’s senior vice president and head of oncology global clinical development, recently told Fierce Pharma….
And to be clear, it is an immaterial bet — as to each of these giants, but now you know. Onward, to an advance screening tonight, at the U. of C., of a new documentary (funded by the Irish Consulate) on the Irish diaspora — here in Chicago… should be good stuff!
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Powerline Lies... 