Merck, Ariad Enter
Drug-Development Deal
By KEVIN KINGSBURY
July 12, 2007 7:28 a.m.
Ariad Pharmaceuticals Inc. has entered a potential billion-dollar deal under which drug giant Merck & Co. Inc. will help develop and commercialize a promising treatment for a form of cancer.
Merck will pay the drug developer $75 million upfront, up to $452 million in milestone payments and up to $200 million in sales bonuses. It is also estimated that Merck will spend at least $200 million on development costs for AP23573 and will spend up to $200 million to cover some of Ariad's share of global development costs.
AP23573, Ariad's leading experimental drug, is one of a new class of treatments called mTOR inhibitors, which are designed to work by blocking the protein mTOR and interfering with the growth of cancer cells. Another mTOR inhibitor that has received attention at ASCO is Wyeth's temsirolimus, which was shown to extend the lives of people with advanced kidney cancer in a study.
Cambridge, Mass.-based Ariad unveiled results from a Phase II study in June 2006 that showed AP23573 was effective in treating people with sarcoma, a cancer of the bone as well as soft tissues such as fat and muscle. The disease has typically been treated with surgery, radiation or chemotherapy.
At least 90% of the 212 patients in the Phase II study had sarcoma that was progressing. Overall, 29% of patients had tumor shrinkage or no significant tumor growth for at least 16 weeks. Three of four treatment groups -- one with bone sarcoma and the other two with soft-tissue sarcoma -- had at least 25% of patients meet that treatment threshold. The fourth, a heterogeneous mix of various sarcomas, didn't achieve the target.
In November, Ariad said 70% of the successful patients at 16 weeks were still progression-free at 26 weeks. A Phase III trial for AP23573 is set to begin this quarter.
A handful of new Merck drugs are showing strong potential, lending hope that the company will be able to replace sales from its biggest sellers as they encounter competition from generics. But the company is still paying for mistakes of the past -- for example, adding to a reserve for litigation costs related to its withdrawn painkiller Vioxx, while also shelling out to ensure that its pipeline remains full of promising drugs.
Merck has been pummeled by new generic competition to its cholesterol drug Zocor. Another Merck blockbuster, osteoporosis drug Fosamax, loses protection in the U.S. next year and is already seeing weaker sales due to generic competition overseas.
Ariad will hold a conference call at 9 a.m. EDT. There was no premarket trading on its stock, which closed Wednesday at $6.05. |
