Kelun Biotech and Merck's ADC Drug Collaboration: A Detailed Breakdown of Transaction Scale and Sales Revenue Sharing

Based on the authoritative materials I have collected, I will now provide a detailed explanation of the issues related to the ADC drug collaboration between Kelun Biotech and Merck:

The collaboration between Kelun Biotech and Merck is to date the

[0]. According to the official agreement:

• Upfront Payment
  : $175 million (approximately RMB 1.262 billion)[1]
• Milestone Payments
  : Up to
  $11.564 billion
  , including[0]:
  • SKB264 (TROP2 ADC): $1.368 billion
  • SKB315 (CLDN18.2 ADC): $901 million
  • 7 preclinical ADC assets: $9.3 billion

Regarding sales peak projections, there are differences among forecasts from various research institutions:

1. SPDB International Forecast
   [2]:
   • Peak in Chinese market:
     RMB 6.5-8 billion
   • Peak in U.S. market:
     $2-3.5 billion

2. Pacific Securities Forecast
   [3]:
   • Overseas revenue is expected to reach
     RMB 32 billion
     by 2032
   • Assuming a 10% sales revenue sharing ratio for Kelun Biotech, the attributable sales revenue will reach
     RMB 3.2 billion

According to the prospectus and public disclosure documents, the revenue sharing ratios for each product are as follows:

Product	Revenue Sharing Ratio	Scope of Rights
SKB264	Mid-single digits to low double digits (5%-15%)	Excluding Greater China[1]
SKB315	Mid-single digits to double digits (5%-20%)	Global rights[1]
7 preclinical ADC assets	Tiered royalties	Global or excluding Hong Kong, Macau and Taiwan regions of China[1]

• Mid-single digits
  : Approximately 5%-7%
• Low double digits
  : Approximately 10%-15%
• Double digits
  : Approximately 10%-20%
• Tiered royalties
  : A revenue sharing ratio that increases with sales tiers

Merck is fully advancing the clinical development of SKB264, having initiated

, with indications including[0]:

• Non-small cell lung cancer
• Endometrial cancer
• Breast cancer
• Gastroesophageal adenocarcinoma
• Cervical cancer

• SKB264 is expected to receive approval for launch in China by
  late 2024 to early 2025
  [2]
• It is expected to receive approvals in overseas markets sequentially from
  2027 to 2030
  [3]

Regarding the

you mentioned, based on the authoritative materials I have obtained, this figure may contain . Currently, forecasts from major research institutions are concentrated on:

• Chinese market
  : RMB 6.5-8 billion
• U.S. market
  : $2-3.5 billion
• Overall overseas market
  : RMB 32 billion (approximately $4.5 billion)

In terms of revenue sharing ratios, the overseas sales revenue sharing ratio for SKB264 is between

, which falls within the normal range for international pharmaceutical licensing collaborations[1].

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[0] Oriental Fortune Securities Research Report - ADC Leader’s Commercialization Imminent, Out-Licensing Demonstrates Heavyweight Potential (July 2024)
[1] Kelun Biotech Prospectus and Shenwan Hongyuan Research Report
[2] SPDB International - Kelun Biotech (6990.HK): ADC Leader’s Commercialization Imminent, Future Promising (November 2024)
[3] Pacific Securities - Kelun Biotech In-Depth Report: ADC Commercialization Imminent, Joining Hands with Merck to Target Biopharma (June 2024)