Merck Serono, Opexa Therapeutics team up for MS therapy

THE WOODLANDS, Texas—Opexa Therapeutics, Inc. and MerckSerono, a division of Merck KGaA, have announced an agreement to develop andcommercialize Tcelna (imilecleucel-T), a potential first-in-class personalizedT cell therapy for patients with multiple sclerosis. Opexa, which is currentlydeveloping the therapy, is testing it in a Phase IIb clinical trial in patientswith secondary progressive multiple sclerosis.

Per the terms of the agreement, Merck Serono will pay Opexa$5 million up front, for which it will receive an option for the exclusivelicense of the Tcelna program for multiple sclerosis. Merck Serono may exercisethe option prior to or upon the completion of the Phase IIb trial, and if theoption is exercised, Merck Serono will pay Opexa an upfront license fee ofeither $25 million or $15 million, depending on whether certain conditions aremet. In return, the company would receive worldwide development and commercialrights to the program, with the exclusion of Japan. In addition to the initialpayment and the upfront license fee, Opexa could receive additional financialconsiderations of up to $195 million, if certain development and commercialmilestones are met. Opexa is also eligible to receive tiered royalties at arate from the high single digits to the mid-teens based on net sales ofresulting products. All told, the potential payments to Opexa could total $225million.

"Opexa is pleased to partner with Merck Serono and givenMerck Serono's long-term strategic commitment to, and existing franchiseposition in the field of multiple sclerosis, we could not ask for a moreexperienced partner to carry Tcelna (imilecleucel-T) through development andhopefully to the market and to patients," Neil K. Warma, president and CEO ofOpexa, said in a press release. "We also are pleased to retain important rightsthrough this transaction, such as certain manufacturing rights,commercialization rights to the Japanese market and a co-funding of developmentoption, as well as rights for all indications outside of MS, all of which areintended to enhance Opexa shareholder value."

Should Merck Serono exercise its option, the company willthen assume sole responsibility for funding clinical development, subject toOpexa's co-funding option, and for regulatory and commercialization activities.Opexa will have an option to co-fund development, supporting the programfinancially in return for additional royalty consideration. Additionally, Opexawill retain all rights to Tcelna outside of multiple sclerosis and the abilityto commercialize the program in Japan, as well as certain related manufacturingrights.

So far, Tcelna has been evaluated in Phase I and II clinicalstudies in multiple sclerosis, including in patients with secondary progressivemultiple sclerosis. The U.S. Food and Drug Administration has granted thetherapy Fast Track Designation.

"Merck Serono is strongly committed to developing innovativedrug candidates like Tcelna (imilecleucel-T), a potential first-in-classpersonalized cell therapy for patients with multiple sclerosis," Susan Herbert,head of Global Business Development and Strategy at Merck Serono, said in astatement. "This agreement illustrates Merck Serono's commitment to employcreative ways of accessing external innovation to develop potentialnext-generation multiple sclerosis treatments, especially in secondaryprogressive multiple sclerosis, an area of high unmet need."

SOURCE: Opexa Therapeutics, Inc. press release