As Merck builds out its immunology research lab in London, it’s partnering with a local biotech startup that has remained relatively quiet since its seed round in 2021.
The pharma giant said Tuesday morning it is pairing up with Cambridge, UK-based Mestag Therapeutics to find new targets for fibrosis and inflammatory disease treatments. Merck will deliver an upfront payment of undisclosed size to the nearly four-year-old Mestag, which is working on drugging fibroblasts. These cells are integral to the formation of connective tissue and also help communicate with immune cells and give them navigation orders.
If all goes to plan, Mestag stands to gain as much as $1.9 billion from the yearslong partnership that the duo has inked. Mestag could deliver a “number of targets,” but the startup’s CEO, Susan Hill, declined to disclose how many to Endpoints News. Merck will be responsible for developing any drugs that arise from the pact.
The move comes as Merck makes bold bets on the I&I field, dishing out $10.8 billion to buy Prometheus Biosciences last year and $700 million upfront to buy an early clinical-stage T cell engager from Curon Biopharmaceutical this summer.
“We’re also very happy to work with a partner that is very actively and demonstrably building out inflammatory disease and autoimmune discovery capabilities,” Hill said in an interview.
For Mestag, the money infusion gives runway to get closer to the clinic. It disclosed a $45 million seed round in 2021 from SV Health Investors, Johnson & Johnson Innovation, GV, Northpond Ventures and Forbion. It also worked on an inflammatory disease collaboration with J&J for undisclosed terms, but that tie-up is “completing” and coming to an end, Hill said.
The three dozen-employee startup will likely begin fundraising a Series A in the first half of 2025 so it can get into the clinic with its first experimental drug about 15 months from now, Hill said.
The company’s first program, MST-0300, is a bispecific antibody that is meant to agonize lymphotoxin beta receptors in solid tumors and co-engage fibroblast activation protein, or FAP. It aims to induce tertiary lymphoid structures, or TLS, in solid tumors to drum up an immune response to the cancer.
“There’s an incredible amount of data in the literature now showing that patients that have TLS in their tumors do better on overall survival and PFS,” Hill said.
Behind that project, Mestag has inflammatory and autoimmune programs, including checkpoint agonists that target myeloid biology rather than T cell biology that other hot I&I drug modalities are going after, the CEO said.
For example, multiple drugmakers are attempting to turn CAR-T cell therapies and T cell engagers into I&I medicines. Hill said she doesn’t believe there are any other I&I medicines in development that go after fibroblasts and the surrounding stromal tissue in the way that Mestag’s programs do.
Mestag doesn’t plan to partner out either of those programs anytime soon. The upcoming Series A will take both the oncology and I&I drugs to proof of concept human data, the CEO said.
The startup recently brought on medical chief Andrew Joe, who was previously in the same post at Merus and before that held senior director roles at Merck, where he helped bring Keytruda into new cancer indications. Mestag is also bringing aboard an undisclosed head of development from MorphoSys next week, Hill said.