Several major pharmaceutical companies are competing to acquire an experimental cancer treatment from California-based Inhibrx Biosciences in what could become an $8 billion deal, according to industry sources.
The San Diego biotech firm has attracted attention from pharmaceutical heavyweights including Merck & Co, Germany’s Merck KGaA, and Japan’s Ono Pharmaceutical for its promising cancer drug INBRX-106.
Inhibrx is considering spinning off INBRX-106 along with a second experimental cancer therapy in a combined transaction that could exceed $9 billion in value if clinical testing proves successful, sources close to the negotiations revealed.
The primary focus centers on INBRX-106, which researchers are evaluating both as a standalone treatment and in combination with Merck’s blockbuster cancer drug Keytruda. Company officials believe their experimental therapy could enhance the effectiveness of Keytruda, which generates more than $30 billion annually and ranks as the world’s best-selling prescription medication.
Keytruda currently treats numerous cancer types and represented nearly half of Merck’s worldwide revenue in 2025.
Industry insiders indicate that negotiations remain in preliminary phases, with any final agreement likely months away. The ultimate purchase price will depend heavily on forthcoming clinical trial outcomes, according to sources who requested anonymity due to the confidential nature of discussions.
Representatives from Inhibrx declined to provide comment, while Merck, German Merck, and Ono have not yet responded to inquiries.
The biotech company plans to announce updates on both experimental treatments soon. On Wednesday, ozekibart received fast track and orphan drug status from the U.S. Food and Drug Administration, and the company is expected to reveal it has submitted an FDA approval application for the therapy.
Ozekibart has demonstrated encouraging results in Phase 1/2 clinical studies for Ewing sarcoma and colorectal cancer, with an estimated value of approximately $1 billion. The treatment works by triggering cancer cell destruction, and in one Ewing sarcoma trial, patient tumors decreased by roughly 52%.
INBRX-106’s potential $8 billion valuation hinges on trial data confirming its ability to amplify Keytruda’s already strong performance. The final worth will be determined by patient response rates in ongoing studies.
The experimental drug functions as an antibody that strengthens immune system response by stimulating receptors on T cells, which play a crucial role in immune defense.
Early data from over half of the 60 patients enrolled in Phase 2/3 combination trials with Keytruda suggest the potential to increase overall patient response rates to 45%, compared to 30% with Keytruda alone, one source disclosed.
The company intends to release interim trial results next month, according to an insider.
“We think INBRX-106 is highly investable through targeting the narrow Keytruda-responder base to enhance this $32 billion drug’s cure-like efficacy,” stated Stifel biotech analyst Dara Azar in a recent research note.
This month, Stifel began covering the relatively unknown biotech company with a “buy” recommendation and $150 price target. Inhibrx stock finished Tuesday trading at $84.08.
Current clinical testing involves patients with advanced head and neck cancers, conditions with few available treatment alternatives.
INBRX-106 holds particular strategic value for Merck, which seeks new revenue streams as Keytruda faces patent expiration in 2028. However, this strategic alignment doesn’t provide Merck with a competitive advantage as a potential acquirer, sources noted.
The experimental therapy could equally appeal to other major pharmaceutical companies seeking to strengthen their cancer immunotherapy portfolios, including Eli Lilly, AstraZeneca, Pfizer, and Johnson & Johnson.
The drug is unlikely to reach market before Merck begins facing competition from lower-cost biosimilar versions of Keytruda.
Inhibrx is evaluating a spinoff structure similar to its 2024 agreement with Sanofi, where Sanofi purchased INBRX-101 for $30 per share in cash plus a $5 contingent payment tied to regulatory achievements.
