Power Alley | Merck News: It's Not Like They NEED The Money -- But It Does Smartly Allocate Risk-To-Returns...

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!

नमस्ते