Merck sets sights on brain cancer with $30M Modifi acquisition

Merck & Co. is putting down $30 million upfront to buy Yale spinout Modifi Biosciences, a deal that includes a preclinical asset designed to take on the tough-to-treat brain cancer glioblastoma (GBM).

“We pitched to venture capitalists and the light switch would just go off when we talked about GBM,” Ranjit Bindra, M.D., Ph.D., Modifi co-founder and physician-scientist at the Yale School of Medicine, told Fierce Biotech in an interview. “You talk to a group like Merck—the light switch goes on.”

Modifi previously struggled to gain strong investor support, which Bindra attributed to a chaotic market and Modifi's desire to stick to GBM, a relatively rare cancer. 

Now, Merck's Big Pharma firepower used for a disease like GBM could "change the whole landscape," Bindra said.

Modifi shareholders will be eligible for further payments totaling up to $1.3 billion if certain milestones are met, the companies announced in an Oct. 23 release. These milestones include major events related to clinical trials and potential regulatory approval, Bindra said.

The biotech will operate as a wholly owned subsidiary of Merck, according to Bindra, who will serve as a consultant with Merck for the transition period and plans to play an active role in the drug's clinical development.

GBM is the most common type of brain cancer and is a devastating disease, with a five-year survival rate of around 5%.

“I've been treating patients for 13 years. I've probably got one or two brain tumor patients that are still alive,” Bindra said. “It's very sad that we don't have the advances that we've had in many other cancers.”

Modifi’s main asset, MOD-246, is a small molecule inspired by Bindra’s interactions with his patients. He noticed that some patients had cancers that were resistant to the chemotherapy drug temozolomide (TMZ). TMZ is used when the cancer cells have a nonfunctional version of the DNA repair protein called O6-methylguanine methyltransferase (MGMT), which occurs in about half of GBM cases. But even when his patients had nonfunctional MGMT, TMZ sometimes didn’t work.

Puzzled, Bindra and colleagues took a closer look. TMZ kills cancer cells by adding methyl groups to the cells’ DNA. Normally, MGMT would remove these methyl groups, but, without it, the barrage of DNA modification activates a separate DNA repair pathway called mismatch repair (MMR). MMR detects all of the methyl groups and thinks the genome is horribly damaged, so it shuts down replication and kills the cell.

Essentially, TMZ uses one DNA repair pathway to take advantage of the cancer’s lack of a different repair pathway. However, if the cancer also has a nonfunctional MMR pathway, TMZ won’t work. The researchers decided to try to develop a drug that would target MGMT directly without needing a functioning MMR system.

Working with Yale chemist Seth Herzon, Ph.D., and then-student Kingson Lin, M.D., Ph.D., the team built a drug using TMZ as a backbone that adds fluoroethyl groups to the cancer’s DNA instead of methyl. These fluoroethyls cause the DNA to bind together, stitching it up and physically preventing DNA replication from taking place, with no need for MMR to get involved. They then went on to launch Modifi in 2021.

“DNA repair defects are a frequent hallmark of tumor cells and a major cause of resistance to cancer therapy,” David Weinstock, M.D., Ph.D., vice president of discovery oncology at Merck Research Laboratories, said in the release. “The talented Modifi Biosciences team has developed an innovative approach that we believe has potential for treating some of the most refractory cancer types.”

Merck and Modifi will next work on IND-enabling studies for MOD-246, with hopes of getting into the clinic by the end of next year, according to Bindra.

The buyout tails Merck's larger M&A move last year, when it bought Prometheus Biosciences and its late-stage bowel disease antibody for $10.8 billion. The New Jersey-based pharma followed that up with the January $680 million purchase of Harpoon Therapeutics and its pipeline of T-cell engagers.