Merck & Co. is again refining the scope of its antibody-drug conjugate (ADC) pact with Sichuan Kelun-Biotech Pharmaceutical, opting to license the bispecific ADC candidate SKB571, while handing back rights to another asset focused on the CLDN18.2 target.The companies struck a partnership in 2022 in which Merck was granted overseas development rights to the TROP2-targeting ADC asset MK-2870 (SKB-264) for potentially over $1.4 billion. Merck later shelled out another $175 million as part of a heavily backloaded expanded collaboration that could eventually net Kelun over $9 billion.Despite doubling down on ADCs via a massive deal worth up to $22 billion with Daiichi Sankyo late last year, Merck pulled out of developing two preclinical therapies under development with Kelun. The company has now fine-tuned the alliance with the Chinese biotech again.In a release detailing its half-year results, Kelun said Merck has now taken up its option on SKB571 for $37.5 million. Kelun described the programme as primarily intended for solid tumours like lung and gastrointestinal cancers. "Through a scientific selection of target combinations and a differentiated design of [bispecific antibody] molecules, it is designed to enhance tumour targeting and help overcome tumour heterogeneity, thereby improving efficacy," the company said.Preclinical studies of SKB571 have demonstrated "promising anti-tumour efficacy and a good safety profile" in multiple patient-derived xenograft models and cynomolgus monkeys, according to Kelun. The biotech plans to submit an investigational new drug (IND) application for the bispecific ADC "in the near future."Meanwhile, Merck has returned global rights to Kelun's CLDN18.2-directed ADC candidate SKB315. Kelun noted that early-stage clinical data for SKB315 has shown "positive efficacy and acceptable safety profile in GC [gastric cancer] with high CLDN18.2 expression," and the company expects to present findings at upcoming conferences."Given the significant population of GC patients in China, we have confidence in the market prospects of SKB315 in China. We will continue to expedite its development in China and explore suitable expansion into overseas markets," it added.The updates to the Kelun-Merck collaboration come as the broader immuno-oncology (I-O) landscape shows signs of slowing, with Roche recently merging its I-O unit into a broader oncology group amid a series of setbacks for TIGIT inhibitors. See – Vital Signs: Tracking the shrinking returns in I-O, and who has the most to lose.