Lilly and Merus NV Announce Collaboration to Discover Novel T-Cell Re-Directing Bispecific Antibodies

INDIANAPOLIS, IN, USA and UTRECHT, The Netherlands I January 19, 2021 I Loxo Oncology at Lilly, a research and development group of Eli Lilly and Company (NYSE: LLY), and Merus N.V. (NASDAQ: MRUS), a clinical-stage oncology company developing multi-specific antibodies, today announced a research collaboration and exclusive license agreement that will leverage Merus' proprietary Biclonics® platform along with the scientific and rational drug design expertise of Loxo Oncology at Lilly to research and develop up to three CD3-engaging T-cell re-directing bispecific antibody therapies.

Under the terms of the agreement, Merus will lead discovery and early stage research activities while Loxo Oncology at Lilly will be responsible for additional research, development and commercialization activities. Merus will receive an upfront cash payment of $40 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 ranging from the mid-single to low-double digits on product sales should Lilly successfully commercialize a therapy from the collaboration.

"CD3-engaging bispecific antibodies are rapidly becoming one of the most transformative immune-modulating modalities used to treat cancer. We expect these therapies will become an important component of the Loxo Oncology at Lilly biologics strategy," said Jacob Van Naarden, chief operating officer of Loxo Oncology at Lilly. "Merus has built a differentiated platform and one that we believe can enable us to create bispecific antibody therapies with wider therapeutic indexes than those available today. We look forward to working closely with Merus to develop new potential medicines for patients with cancer."

"The collaboration with Loxo Oncology at Lilly and their world class research capabilities opens up exciting possibilities for Merus' Biclonics® platform," said Bill Lundberg, MD., President and Chief Executive Officer at Merus. "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." 

This transaction is subject to customary closing conditions. This transaction will be reflected in Lilly's reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP). There will be no change to Lilly's 2021 non-GAAP earnings per share guidance as a result of this transaction.

About Merus
Merus is a clinical-stage oncology company developing 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. For additional information, please visit Merus' website, www.merus.nl and https://twitter.com/MerusNV.

About Loxo Oncology at Lilly
Loxo Oncology at Lilly was created in December 2019, combining the Lilly Research Laboratories oncology organization and Loxo Oncology, which was acquired by Lilly in early 2019. Loxo Oncology at Lilly brings together the focus and spirit of a biotech with the scale and resources of large pharma, with the goal of rapidly delivering impactful new medicines for people with cancer. Our approach centers on creating new oncology medicines that unequivocally work early in clinical development and will matter to patients.

About Eli Lilly and Company
Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about Lilly, please visit us at www.lilly.com. C-LLY

SOURCE: Eli Lilly

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