Merck pays $400 million upfront for SciBrunch's KRAS G12D drug in a deal worth up to $2.13 billion

Merck has licensed worldwide rights to SPR2015, an experimental oral cancer drug from Shanghai-based SciBrunch Therapeutics, in a deal worth up to $2.13 billion, the company said Monday. SciBrunch gets $400 million upfront and is eligible for milestone payments tied to development, sales and other goals across several cancer types. Merck said the transaction has already closed. Reuters and Fierce Biotech also reported the deal.

What Merck bought

SPR2015 targets KRAS G12D, which Merck describes as the most common cancer-driving RAS mutation in human tumors. The mutation locks the KRAS protein in an "on" state that keeps telling cells to grow. SciBrunch's founder and chief executive, Tao Hu, named pancreatic, colorectal and lung cancers among the tumors the company is targeting.

The drug is preclinical. Merck's release says it has shown activity in mutant cell lines and anti-tumor effects in mouse models built from cell lines and patient tumors, data presented at this year's AACR annual meeting. It has not yet been given to patients. SciBrunch itself was founded in late 2024.

The number behind the number

Two figures in Merck's release matter more than the $2.13 billion headline.

• Only 19% is guaranteed. The $400 million upfront is about 19% of the total. The other $1.73 billion, roughly 81%, is paid only if the drug clears development and commercial milestones. For a molecule that has not started human trials, most of that is contingent on years of results that may never come.
• It hits this quarter's earnings. Merck will book a $400 million pre-tax charge, about $0.13 a share, in both GAAP and non-GAAP third-quarter results. Because it lands in the adjusted figure too, anyone comparing Merck's reported third-quarter EPS against consensus should check whether the estimate already includes it.

Against Merck's size, the cash is small. Nasdaq.com put the company's market value at about $366 billion, so the upfront is roughly 0.1% of it. MRK was at $148.38 at 12:53 p.m. ET, down 0.27% on the day, in the upper part of a 52-week range of $77.69 to $156.92.

Why it matters beyond Merck

The deal has a U.S. drugmaker paying a Chinese biotech founded in late 2024 for global rights to an asset that has not reached the clinic. BofA Securities advised SciBrunch. For investors in U.S. small-cap biotech, the point is competitive: large buyers can source early molecules from China at an upfront price that is a small fraction of the headline value, which shapes what U.S. developers of similar drugs can ask in their own licensing talks.

What to watch: Merck's third-quarter report, where the charge will show up, and any disclosure of when SPR2015 enters its first human trial. More company news is in our stocks section.

Sources: Merck news release; Reuters; Fierce Biotech; Nasdaq.com. Percentages are our calculations. This is market information, not investment advice.