Mestag’s pipeline consists of antibody therapies based on fibroblast-immune interactions as a treatment for cancer and inflammatory diseases. Image credit: Sergiy Palamarchuk / Shutterstock.

MSD (Merck & Co) has signed a license and collaboration agreement with Mestag Therapeutics to develop new fibroblast therapies for inflammatory diseases – a deal potentially worth $1.9bn

The companies did not disclose the particulars of the deal, noting that the agreement allows MSD the option to get exclusive development and marketing licences to “a prespecified number of potential targets.” The UK-based biotech in return will receive an upfront payment, and access fees and will be in line to receive option fees and “downstream payments”.

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Fibroblasts form the connective tissue and are responsible for synthesising extracellular matrix components and collagen, the structural framework of the body. They also play an important role in wound healing, inflammation, and tissue repair. Mestag’s pipeline consists of antibody therapies based on fibroblast-immune interactions as a treatment for cancer and inflammatory diseases.

The company’s lead candidate, MST-0300, is a bispecific antibody. The therapy targets lymphotoxin beta receptor (LTBR) in the tumour on co-engagement of fibroblast activation protein (FAP), a tumour-specific marker expressed by cancer-associated fibroblasts, to induce the formation of tertiary lymphoid structures (TLSs) in solid tumours. The presence of these TLSs can be predictive of improved patient outcomes and better therapeutic response. Mestag plans to file an investigational new drug (IND) application in the second half of 2025.

Another preclinical candidate in the company’s pipeline is M402, a stromal checkpoint agonist antibody. The therapy is designed to inhibit specific immune cell populations, including myeloid cells. Mestag states that M402 has the “potential to benefit patients across inflammatory diseases including rheumatoid arthritis, lupus, Sjogren’s, graft-versus-host disease and others.”

MSD has been steadily investing in expanding its antibody therapies pipeline. In August, the company acquired Curon Biopharmaceutical, a Chinese biopharmaceutical company specialising in developing bispecific antibodies. The deal is worth approximately $1.3bn in upfront and milestone-based payments.

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Mestag had previously collaborated with Johnson & Johnson (J&J) in 2021. The licensing agreement allowed J&J the option of an exclusive license to develop and commercialise up to two therapies for the treatment of inflammatory disease.