On August 16, 2022, Merck (NYSE: MRK) and Orna Therapeutics each announced that they entered into a collaboration agreement relating to the discovery, development and commercialization of therapeutics and vaccines in the oncology and infectious disease spaces.

The deal centers around Orna’s “oRNA” technology which is reportedly directed to the creation of circular RNAs (oRNAs) from linear RNAs through “self-circularization.” The companies indicate that “oRNA molecules have been shown to have greater stability in vivo than linear mRNA and have the potential to produce larger quantities of therapeutic proteins inside the body … [and] are more compactly packaged into custom lipid nanoparticles (LNPs), which Orna has engineered to target key tissues in the body.”

Like Pfizer (through its collaboration with BioNTech) and Sanofi (through its acquisition of Translate BIO), Merck is another big pharma player that appears to be looking to gain a foothold in the mRNA space. For example, prior to this deal with Orna, Merck collaborated with Moderna in connection with its mRNA technology and taken other steps with mRNA, but “hasn’t yet broken through with an approved product.”

The companies have referenced the circular mRNA and “custom” LNP technology as a “new generation of potential vaccines and therapeutics,” possibly differentiating those therapies from existing ones, including the therapies used in the Moderna and BioNTech/Pfizer Covid-19 vaccines which utilize linear mRNA payloads carried by certain lipid formulations.

With respect to the financial terms, Merck will reportedly make a $150 million upfront payment to Orna, and Orna will be eligible to receive upwards of $3.5 billion in milestone payments based on applicable regulatory progress, as well as royalties on sales of approved products resulting from the collaboration. Orna will reportedly retain rights to its oRNA-LNP platform and Merck will invest $100 million in Orna’s Series B funding round.

See the Merck and Orna press releases for more details surrounding this deal.

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