Merck and Orna Therapeutics to collaborate in deal entitling Orna to up to $3.5 billion in milestone payments

Merck
MRK,
-0.46%
and privately held Orna Therapeutics said Tuesday they have agreed to collaborate to discover and develop programs, including vaccines and therapeutics, in the fields of infectious disease and oncology. Under the terms of the deal, Merck will make an upfront payment of $150 million, to be expensed in the third quarter and included in non-GAAP results. Orna will be eligible to receive up to $3.5 billion in milestone payments on reaching certain regulatory and sales goals, as well as royalties on any approved products. “Orna will retain rights to its oRNA-LNP technology platform and will continue to advance other wholly owned programs in areas such as oncology and genetic disease,”
the companies said in a joint statement. “Merck will also invest $100 million of equity in Orna’s recently completed Series B financing round.” Merck shares were slightly lower premarket, but have gained 18% in the year to date, outperforming the S&P 500
SPX,
+0.40%,
which has fallen 10%.