Merus N.V. ( MRUS ) stock moved lower on Monday. The company announced a research collaboration and license agreement with Biohaven Ltd. ( BHVN ) . Here’s what you need to know.

What To Know: Biohaven ( BHVN ) and Merus will to co-develop three antibody-based therapies, utilizing Merus’ Biclonics platform alongside its own technologies. The collaboration includes two existing Merus programs and one in early research.

Under the agreement, Merus will receive an upfront payment and a licensing fee once the first antibody drug conjugate (ADC) candidate is selected. In addition, Merus will cover the costs of preclinical antibody development, while Biohaven ( BHVN ) will manage the preclinical ADC development expenses.

If any therapies progress to commercialization, the companies plan to share development costs jointly.

“We believe this collaboration with Merus will accelerate our ability to create highly differentiated multispecific ADCs, leveraging Biohaven’s innovative conjugation and payload technologies to deliver optimized ADCs with the potential to significantly benefit patients across various cancer types through an enhanced efficacy and safety profile,” added Brian Lestini, President, Oncology of Biohaven ( BHVN ).

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MRUS Price Action: Merus stock closed 7.75% lower on Monday at $40.45, according to data from Benzinga Pro.