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Pharmaceutical, to develop small molecule inhibitors against the KRAS oncogene and several other drug targets under study as potential cancer treatments, through a collaboration that could generate more than $2.5 billion for Taiho and Astex.'
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The two have granted Merck $MRK an exclusive global license for their small molecule inhibitor candidates, receiving an upfront payment of $50m in addition to $2.5bn in potential payments tied to sales figures etc.

Merck is also funding project R&D.
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We already knew that Merck $MRK is focusing heavily on oncology but this new deal piques my interest for a number of reasons:
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a) If 4d Pharma continues to show positive clinical trial data for MRx0518, either as a monotherapy or in combination with Keytruda, the chance of 4d and Merck (or indeed another Big Pharma partner) agreeing a similar deal, with billions of dollars..
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in potential payments in addition to a hefty upfront fee rises significantly.

Merck already know 4d Pharma from their bacterial vaccine partnership worth up to $1bn.

We also know that 4d are very interested in MRx0518's immunostimulatory effects.
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This is again right up Merck's alley and a large part of what they are targeting with the aforementioned $2.5bn deal.

The deal would give them access to a potential breakthrough area of oncology with a partner they already know and presumably trust.
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b) If such a deal involved R&D expense being taken on by Merck $MRK or another large player, it significantly reduces dilution risk.

This is highly important for investors and allows them to capture a greater share of 4d's realised value.
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c) You would begin to think that if Merck collaborated with 4d in oncology AND bacterial vaccines, that they would consider buying the entire company itself.

For it to get this point a prerequisite would be highly significant data from a number of..
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..clinical trials or projects undergone in collaboration.

As we saw from the VelosBio takeover (for $2.75bn), Merck $MRK is not shy to pay up for emerging oncology candidates. Combine this with bacterial vaccines (and numerous other platform..
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..and IP advantages) and you begin to realise that the absolute FLOOR for a 4d Pharma takeover would be £2bn.

IMO the takeover price would likely be higher - and for LT shareholders a takeover may not be the best option.
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Regardless one sees from:

1) Merck $MRK's current activity
2) 4d's highly significant MRx0518 data and areas of interest
3) Merck's existing collaboration with 4d

that 4d may either be part of another billion dollar Merck deal or bought for >£2bn.
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