Ambrx nabs $303M deal with Merck for 'smart bomb' delivery

As antibody drug conjugates become more and more popular in the world of drug development, Merck ($MRK) has inked a deal worth up to $303 million with San Diego's Ambrx to use the company's targeted delivery tech.

Merck will pay $15 million up front with $288 million in potential milestones to develop "smart bomb" targeted treatments with Ambrx's platform. The company's conjugates are designed to target infected cells by mimicking natural antibodies, using disease-seeking proteins to get treatments to where they're needed.

The two companies didn't disclose what they have planned for the partnership, but the gist of the deal is that Merck will come up with target diseases and Ambrx will find the necessary proteins to get treatments to them. The two will then work together to develop biologics. In addition to the possible $303 million, Ambrx will also be in line for royalties on any drugs developed in the partnership that reach the market.

While antibody drug conjugates have lately been used in cancer treatments, Ambrx believes the delivery method can catch on in other fields, too, and the deal with Merck is an ideal way to demonstrate that, founder and board member Peter Schultz said in a statement. "Ambrx's technology has the potential to provide the foundation for a new family of biologic drug conjugates that selectively deliver small molecules to their site of action," he said. "Merck's deep disease area expertise made it the partner of choice in expanding the application of this technology beyond oncology to other important disease areas."

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