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Merck
has been a laggard among its peers in the Covid-era race to invest in messenger RNA technology, but on Tuesday it announced a deal worth as much as $3.7 billion with a private biotech to collaborate on mRNA-based vaccines and therapeutics.
Merck
(ticker: MRK) made the deal with a year-old Cambridge-based biotech called Orna Therapeutics, which has a novel take on mRNA. The company calls the approach oRNA, and it involves modifying mRNA strands so that they form a circle rather than a line. The company says that will make them work better as medicines.
Orna’s science is based on the research of Daniel Anderson of the Massachusetts Institute of Technology, who with a colleague came up with the oRNA idea, and was also a pioneer of the lipid nanoparticle technology used to deliver mRNA-based medicines.
Merck is paying Orna $150 million up front, investing $100 million in the company’s Series B financing round, and offering up to $3.5 billion in potential future milestone payments. Under the terms of the deal, Orna will keep the rights to its platform and will continue to work on its own programs.
The news comes as investors wait to see whether Merck will consummate its rumored acquisition of the biotech
Seagen
(SGEN), which according to a report in The Wall Street Journal last month could fetch roughly $40 billion. As the weeks have dragged on since the initial report, faith in the deal has diminished;
Seagen
shares, which closed over $180 in early July, were down to $168.53 at close of trading on Monday, well below the reported deal price of over $200 per share.
Merck shares were down 0.3% in Tuesday morning trading. The stock is up 18% so far this year.
Merck was an early partner for the mRNA-focused firm
Moderna
(MRNA), signing a series of deals beginning in 2015, including an infectious-disease collaboration, and an oncology collaboration. Some of those programs have since been dropped; a personalized cancer vaccine program is ongoing.
Still, the company generally stood aside as its big-pharma peers made large investments in mRNA technology after the Covid-19 vaccines appeared to prove the value of the approach. As
Sanofi
(SNY) bought mRNA specialist firm Translate Bio for $3.2 billion,
Pfizer
(PFE) expanded its collaboration with
BioNTech
(BNTX), and
GSK
(
GSK
) entered into a deal with
CureVac
(CVAC), Merck stood apart.
The Orna deal suggests a shift. Merck and Orna will collaborate on “multiple programs, including vaccines and therapeutics in the areas of infectious disease and oncology,” according to a Tuesday press release from Merck; specific details weren’t disclosed.
Orna’s data are still at an early stage. Its approach could represent an advance over the mRNA approaches used by
Moderna
and the other mRNA firms, but it remains experimental. The company has presented preclinical data that it says proves the potential of its approach. None of Orna’s potential products, however, have entered preclinical development; all remain in what it calls the “discovery” phase.
In 2019, two years before Orna was founded, Barron’s visited the Massachusetts Institute of Technology laboratory of Anderson, who sits on Orna’s board. Anderson had designed a lipid nanoparticle that the mRNA-focused biotech Translate Bio was at the time using in an experimental mRNA-based therapeutic.
“There are a lot of really exciting data in a range of different model systems that make us think it is really going to work,” Anderson said at the time, of the state of mRNA technology. “The human data we get over the next few years will help us determine how broadly mRNA technology can be used.”
Two years later, there is more human data on mRNA medicines than Anderson could have even begun to imagine at the time. Now, his company is looking to take the technology a step further.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
