The Danish biotech Symphogen has entered into an exclusive worldwide license agreement with the German biopharma Merck KGaA for development of its lead experimental cancer therapy, an antibody mixture targeting the epidermal growth factor receptor.

Merck will take over all clinical development and commercialization of Sym004. In exchange, Symphogen will get $25 million (€20 million) upfront, and is eligible for up to $600 million (€495 million) in development, regulatory, and combined sales performance milestones, plus royalties.

“We believe that Merck is uniquely well positioned to develop Sym004 based on its deep knowledge of the EGFR area,” says Kirsten Drejer, CEO of Symphogen. “This transaction further validates the antibody mixture approach as a highly attractive option.”

Sym004 is a recombinant IgG1 antibody product consisting of two antibodies against the epidermal growth factor receptor and inhibits cancer cells by three separate and complimentary mechanisms of actions—ligand binding, activation, and subsequent downstream signaling of the EGF receptor. It also induces rapid and efficient internalization and degradation of the EGF receptor causing immune-mediated killing of cancer cells.

The drug is currently in early/mid-stage clinical trials to treat patients with advanced KRAS wild-type metastatic colorectal cancer who have previously progressed on treatment with standard chemotherapy and a marketed anti-EGFR monoclonal antibody. It is also being evaluated in a single-arm, open-label mid-stage study in patients with squamous cell carcinoma of the head and neck who have failed anti-EGFR-based therapy.

Merck’s desire to develop Sym004 seems like a natural fit, beefing up its EGFR pipeline at a time when it has had several late-stage product failures and has instituted wide-ranging cost-cutting measures. The drugmaker’s second-best selling drug is the EGRF-targeted cancer drug Erbitux, which had sales of $1.1 billion in 2011.

It also highlights pharma’s growing interest in combination therapies that fight cancer from several fronts at once. “Sym004 further strengthens our early development pipeline by adding a product that is thought to act via a proposed synergistic mechanism of action not previously studied, but more specifically, it has the potential to become a key asset complementing our already highly successful Erbitux franchise,” says Susan Jane Herbert, Head of Global Business Development and Strategy for Merck Serono. “This collaboration once again reflects our strong commitment to fighting cancer and to providing new treatment options to patients.”

Symphogen raised media interest in the beginning of 2011 when it announced that it had just closed a $134 million venture financing, the largest financing at the time for a private European biotech company. The money was to be disbursed in three tranches. Investors in the company include Novo A/S, Essex Woodlands, and the Danish Pension Fund.