Exclusive-Merck, rivals eye deal for Inhibrx experimental cancer drug tied to Keytruda, sources say

By Sabrina Valle

NEW YORK, April 22 (Reuters) – Inhibrx Biosciences has drawn interest from drugmakers including Merck & Co, Germany’s Merck KGaA and Japan’s Ono Pharmaceutical for an experimental cancer treatment that could be valued at more than $8 billion, people familiar with the matter said.  

The San Diego-based biotech is exploring the joint spin-off of the drug, INBRX-106, and a second experimental cancer treatment, which could have a combined value of more than $9 billion if clinical trials succeed, the people said.

Interest is concentrated on INBRX-106, which is being tested alone and in combination with Merck’s Keytruda. Inhibrx has said it believes its drug can boost the efficacy of New Jersey-based Merck’s more than $30-billion-a-year immunotherapy, the world’s top-selling prescription medicine.

Keytruda, which is approved to treat a wide variety of cancers, accounted for almost half of Merck’s global sales in 2025.

Talks are in early stages and any deal would likely be several months away, with valuation hinging on upcoming trial results, the people said, speaking on condition of anonymity because the matter is private.

Inhibrx declined to comment. Merck, German Merck and Ono did not immediately respond to requests for comment.

UPDATES ON BOTH DRUGS EXPECTED

Expected results of clinical trials should support the case for both drugs, people close to the information said.

The company said it will provide an update on ozekibart, which received fast track and orphan drug designations from the U.S. Food and Drug Administration on Wednesday. It is expected to disclose it has filed for FDA approval of ozekibart, one of the people said.

The therapy, which has shown positive results in Phase 1/2 trials for Ewing sarcoma and colorectal cancer, could be valued at about $1  billion, two of the people said.

Ozekibart is designed to promote cancer cell death. In one Ewing sarcoma study, patients saw tumors shrink by about 52%, the company has said.

INBRX-106 could be worth $8 billion or more if trials confirm its potential to boost Keytruda’s already impressive efficacy. Ultimate valuation will depend on how well patients respond, the people said. 

The drug is an antibody that boosts immune response by activating a receptor on T cells, a key component of the immune system.

Preliminary results from more than half of the 60 recruited patients in Phase 2/3 combination trials with Keytruda so far support the potential to improve patient overall response rates to 45%, from 30% with Keytruda alone, one of the people said.

The company is planning to disclose interim results next month, one of the people said.

“We think INBRX-106 is highly investable through targeting the narrow Keytruda-responder base to enhance this $32 billion drug’s cure-like efficacy,” Stifel biotech analyst Dara Azar said in a recent client note.

Stifel initiated coverage of the largely unknown biotech this month with a “buy” rating and a $150 price target. Inhibrx shares closed at $84.08 on Tuesday.

Clinical trials are being conducted in patients with advanced head and neck cancers, which have limited treatment options.

BUYER APPEAL   

INBRX-106 would be of particular strategic interest to Merck, which is looking for new revenue sources as its blockbuster immunotherapy faces the loss of patent protections in 2028.

That strategic fit, however, does not give Merck an advantage as a potential buyer, the people said.

INBRX-106 could equally attract attention from other top-tier drugmakers looking to bolster their immuno-oncology offerings, the people said. Those include Eli Lilly, AstraZeneca, Pfizer and J&J, one of the people said.

The drug is unlikely to reach the market before Merck begins facing competition from less expensive biosimilar versions of Keytruda.

Inhibrx is considering a spinout structure similar to its 2024 deal with Sanofi, one of the people said. In that transaction, Sanofi acquired INBRX-101 for $30 per share in cash, plus a $5 contingent value right tied to regulatory milestones. 

(Reporting by Sabrina Valle in New York; Editing by Echo Wang and Bill Berkrot)