Merck's $680M Play on Next-Gen Immunotherapy: What Makes Harpoon Therapeutics Worth the Bet

The big pharma world just got interesting. Merck announced it’s acquiring Harpoon Therapeutics for $23 per share, totaling roughly $680 million in cash. On the surface, it looks like standard portfolio diversification. But dig deeper, and you’ll see this deal signals something bigger about where oncology innovation is heading.

The Prize: HPN328 and the DLL3 Opportunity

Here’s what Merck is really paying for: HPN328, an investigational T-cell engager targeting delta-like ligand 3 (DLL3). For those not deep in immunotherapy, T-cell engagers are engineered proteins that basically weaponize your own immune system—they redirect T-cells to hunt down and kill cancer cells expressing specific targets.

DLL3 is particularly interesting because it shows up in high levels in small cell lung cancer (SCLC) and neuroendocrine tumors. These are notoriously difficult cancers to treat, making any progress here potentially game-changing. HPN328 recently showed positive tolerability and response data in patients with SCLC and neuroendocrine tumors, which explains why Merck’s willing to write a $680M check.

The Technology Stack: Harpoon’s Secret Sauce

Harpoon isn’t just another biotech with one shot. The company developed the TriTAC® platform—a tri-specific T-cell activating construct that can recruit immune cells more effectively than earlier generations of T-cell engagers. They also have ProTriTAC™, which applies a prodrug concept to create engineered proteins that stay dormant until reaching the tumor. It’s clever engineering designed to minimize side effects.

Beyond HPN328, Harpoon’s pipeline includes HPN217 targeting B-cell maturation antigen (BCMA) for multiple myeloma, already in Phase 1 trials. There’s also HPN601 in preclinical development targeting EpCAM-expressing tumors. Not blockbuster territory yet, but solid proof-of-concept work.

Why This Matters Now

The timing isn’t random. The FDA granted HPN328 Orphan Drug Designation for small cell lung cancer back in March 2022, which means accelerated pathways and market exclusivity opportunities. Current clinical trials are evaluating HPN328 both as monotherapy and in combination with atezolizumab in SCLC patients. Merck sees potential in combining HPN328 with other oncology candidates in their pipeline.

Small cell lung cancer has historically been a therapeutic graveyard—limited options, poor outcomes. If HPN328 can move the needle here, it opens conversations about using similar approaches in other solid tumors. That’s the real strategic win.

The Deal Structure

Merck’s acquiring all outstanding shares through a subsidiary at $23 per share in cash. Harpoon’s Board unanimously approved it. Closing is expected in H1 2024, pending stockholder approval and regulatory conditions including Hart-Scott-Rodino antitrust clearance. Merck expects to record a non-tax deductible charge of approximately $650 million ($0.26 per share) when the deal closes.

What This Signals for Immuno-Oncology

Merck’s commitment to immuno-oncology is serious. They’re running one of the largest development programs in the industry across 30+ tumor types. Acquiring Harpoon Therapeutics means they’re doubling down on T-cell engager technology specifically. As solid tumors become the frontier (compared to blood cancers where CAR-T has already proven itself), having multiple shots on goal makes sense.

The acquisition also reflects the creative science coming out of smaller biotech shops. Harpoon spent eight years building its platform and validating its approach. Rather than licensing from Harpoon piecemeal, Merck decided to acquire the entire operation—team, platform, and pipeline.

Bottom Line

This is a calculated bet on an emerging class of immunotherapies. HPN328 isn’t approved yet, and clinical development always carries risk. But the positive data in SCLC and neuroendocrine tumors, combined with Harpoon’s platform versatility, suggests Merck sees meaningful upside. In the immuno-oncology space, that kind of conviction usually means the underlying science is compelling enough to justify $680 million.