Merus NV closed its global strategic research collaboration with Incyte Corp. focused on the research, discovery and development of bispecific antibodies utilizing Merus' Biclonics technology platform.

The agreement grants Incyte the exclusive rights for up to 11 bispecific antibody research programs, including two of Merus' current preclinical immuno-oncology discovery programs.

Incyte agreed to pay Merus an upfront payment of $120 million and purchase 3.2 million shares of Merus stock at $25 per share, for a total equity investment of $80 million. For one current preclinical program, Merus will retain all rights to develop and commercialize an approved product in the U.S.

Merus also has the option to co-fund development of product candidates arising from two other programs. For the other eight programs, Merus is eligible to receive potential development, regulatory and sales milestone payments of up to $350 million per program, for an aggregate milestone opportunity of about $2.8 billion if all milestones are achieved across all eight programs in all territories, in addition to tiered royalties ranging from 6% to 10% on global sales.