US pharmaceutical company Merck & Co Inc (NYSE:MRK), known as MSD outside the US and Canada, on Tuesday announced an agreement with Blackstone Life Sciences to receive USD700m in non-refundable funding to support development of sacituzumab tirumotecan (sac-TMT), an investigational antibody-drug conjugate targeting the TROP2 protein found on multiple cancer types.

The funds will cover part of Merck's expected development costs through 2026.

In return, Blackstone will be eligible for low-to-mid single-digit royalties on net sales of sac-TMT, contingent on US regulatory approval for first-line treatment of triple-negative breast cancer based on results from the ongoing TroFuse-011 Phase 3 trial.

Sac-TMT is currently being evaluated by Merck in 15 global Phase 3 trials across six tumour types, including breast, endometrial and lung cancers. Merck retains full control over the development, manufacturing and commercialisation of sac-TMT, while Blackstone receives no product rights.

The drug was originally developed by Chinese biopharmaceutical company Sichuan Kelun-Biotech Biopharmaceutical Co Ltd (HK:6990), which has licensed to Merck exclusive rights to sac-TMT outside Greater China. Merck's collaboration with Kelun-Biotech remains unchanged under this new financing agreement.