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Stock Alert: Seattle Genetics Up 10% On Deal With Merck

Shares of Seattle Genetics Inc. (SGEN) are rising more than 10 percent or $15.18 in Monday's morning trade at $165.15 after the company and Merck & Co. Inc (MRK) announced two new strategic oncology collaborations that includes a $1 billion equity investment by Merck in Seattle Genetics.

Monday, the two companies said they will globally develop and commercialize Seattle Genetics' ladiratuzumab vedotin, an investigational antibody-drug conjugate or ADC targeting LIV-1, which is currently in phase 2 clinical trials for breast cancer and other solid tumors.

The companies will pursue a joint development program evaluating ladiratuzumab vedotin as monotherapy and in combination with Merck's anti-PD-1 therapy KEYTRUDA (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors.

Under the terms of the deal, Seattle Genetics will receive a $600 million upfront payment and Merck will make a $1 billion equity investment in 5 million shares of Seattle Genetics common stock at $200 per share. Seattle Genetics is also eligible for progress-dependent milestone payments of up to $2.6 billion.

Separately, Seattle Genetics has granted Merck an exclusive license to commercialize TUKYSA (tucatinib), a small molecule tyrosine kinase inhibitor, for the treatment of HER2-positive cancers, in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe. Seattle Genetics will receive an upfront payment of $125 million from Merck and is also eligible for progress-dependent milestones of up to $65 million.

Seattle Genetics has traded in a range of $68.74 to $187.99 in the past 52 weeks.

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