Merck bolts on another immunology firm with $773m Tilos deal


Merck & Co/MSD has agreed to buy privately held biotech Tilos Therapeutics for up to $773 million, its third pipeline-boosting deal in a little over four months.

The deal gives Merck a pipeline of drugs for cancer, fibrotic and autoimmune diseases built around Tilos’ drug discovery platform based on transforming growth factor-beta (TGF-beta), a cytokine thought to dampen down immune responses in cancer as well as encouraging blood vessel development and metastasis.

Specifically, Tilos is developing an array of antibodies that target LAP – a protein that forms a cage around TGF-beta and keeps the cytokine dormant until ready to be deployed. It says anti-LAP antibodies can reduce TGF-beta activity and so have potential in a broad range of solid tumours.

Merck is paying an undisclosed upfront payment for all of Tilos’ outstanding shares, with some of the $773 million total deal value tied to milestone payments.

The acquisition comes after the big pharma company spent $300 million to buy Immune Design in February and agreed a $2.2 billion takeover of Peloton last month, both of which added to its portfolio of early- to mid-stage immuno-oncology candidates.

The serial acquisitions show that Merck isn’t prepared to step off the accelerator in immuno-oncology, a field in which it is currently riding high with PD-1 checkpoint inhibitor Keytruda (pembrolizumab).

While Keytruda is patented out to 2028 and is still growing at a phenomenal pace, Merck wants to make sure it has a packed follow-up pipeline addressing numerous other drug targets, particularly as there is an increasing sense that cancer immunotherapies will work best when used in combination.

Buying Tilos adds another platform that promises to allow fine control of the tumour microenvironment to that effort, although for now there isn’t a lot of information about the lead programmes at the Massachusetts-based biotech.

On its website, Tilos notes that it has anti-LAP antibodies that can deplete immunosuppressive cells and also block the release of TGF-beta from the TGF-beta-LAP complex from inhibitory cells while leaving the complex in the extracellular matrix (ECM) untouched.

That should zero in on pathological processes without affecting TGF-beta’s role in normal cellular functions, avoiding side effects.

Meanwhile, it says it also has anti-LAPs that target the ECM and could play a role in desmoplastic tumours, which typically begin in the abdomen or pelvis, as well as candidates that can preferentially deplete specific inhibitory cell populations that feature in myeloid-derived suppressor cells (MDSC) driven cancers.

The platform derives from research conducted at the laboratories of Galina Gabriely and Howard Weiner at Brigham and Women’s Hospital and Harvard Medical School.