Merus Enters Collaboration With Eli Lilly to Develop New Generation of Cancer Treatments

Palo Alto – February 3, 2021 – Cooley advised Merus, a publicly traded clinical-stage oncology company developing multi-specific antibodies, on its research collaboration and exclusive license agreement with Loxo Oncology at Lilly, a research and development group of Eli Lilly and Company. Kate Hillier, Marshall Olin, Ken Krisko and Kristy Brady led the Cooley team advising Merus.

Under the terms of the agreement, Merus will lead discovery and early-stage research while Loxo Oncology at Lilly will be responsible for additional research, development and commercialization. Merus will receive an upfront cash payment of $4 million, as well as an equity investment by Lilly of $20 million in Merus common shares. Merus is also eligible to receive up to $540 million in potential development and commercialization milestones per product, for a total of up to approximately $1.6 billion for three products, as well as tiered royalties.

"The collaboration with Loxo Oncology at Lilly and their world class research capabilities opens up exciting possibilities for Merus' biclonics platform," Merus president and CEO Bill Lundberg said in a news release. "Our CD3 T-cell engager platform includes over 175 novel and diverse anti-CD3 common light chain antibodies across a wide range of affinities and attributes and enables functional screening of large libraries for optimal performance. We look forward to working together with Loxo Oncology at Lilly to define a new generation of medicines to treat cancer."

Merus develops innovative full-length human bispecific and trispecific antibody therapeutics, referred to as multiclonics. Multiclonics are manufactured using industry standard processes and have been observed in preclinical and clinical studies to have several of the same features of conventional human monoclonal antibodies, such as long half-life and low immunogenicity.

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