Merck has entered into a license deal worth up to $605.5m with Chinese pharma firm Abbisko Therapeutics for pimicotinib (ABSK021), which is being developed by the latter for the treatment of tenosynovial giant cell tumor (TGCT).

Pimicotinib is a novel, orally administered, highly selective, and potent small-molecule colony stimulating factor-1 receptor (CSF-1R). It is currently being assessed in a global Phase 3 trial.

Under the agreement, Merck has the license to commercialise products comprising or containing CSF-1R inhibitor for all indications in mainland China, Hong Kong, Macau, and Taiwan, with an option for other parts of the world.

Abbisko Therapeutics will retain the exclusive rights to develop pimicotinib within the licensed territory.

Additionally, Merck will have the option to co-develop the candidate for additional indications under specific conditions.

The Chinese firm will receive an option exercise fee from Merck in addition to an upfront payment of $70m upon option exercise.

Abbisko Therapeutics will also earn additional payments upon the fulfillment of specific regulatory and commercial milestones in addition to double-digit tiered royalties on net sales by the pharmaceutical major.

The total amount of double-digit percentage royalty on real yearly net sales, as well as the upfront payment, exercising payment, and development and commercialisation milestone is valued at to up to $605.5m.

Merck healthcare business sector chief marketing officer Andrew Paterson said: “We have the opportunity through our partnership with Abbisko to deliver a first-in-class treatment for a critically underserved patient population in China and potentially beyond.

“Pimicotinib provides an opportunity to address a significant unmet medical need and for us to expand our commercial footprint in oncology in China, the second-largest pharmaceutical market in the world.”

Pimicotinib has received breakthrough therapy designations (BTD) from the China National Medical Products Administration (NMPA) and the US Food and Drug Administration (FDA), as well as priority medicine (PRIME) designation from the European Medicines Agency (EMA) for addressing the treatment needs of patients with TGCT who are not suitable for surgical intervention.

In a recent Phase 1b study, pimicotinib showed clinically meaningful and sustained antitumor activity, achieving an overall response rate of 87.5% at the one-year follow-up.

Abbisko Therapeutics chairman Xu Yao-chang said: “We are pleased to collaborate with a leading multinational pharmaceutical company, jointly accelerating the global approval and commercialisation pace of pimicotinib and striving to bring new treatment options to patients as soon as possible.”