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AstraZeneca and Merck enter into strategic oncology collaboration.

M2 EQUITYBITES-July 27, 2017-AstraZeneca and Merck enter into strategic oncology collaboration


AstraZeneca (LON: AZN) and Merck & Co Inc (NYSE: MRK), known as MSD outside of the US and Canada, have entered into a strategic oncology collaboration to co-develop and co-commercialise AstraZeneca's Lynparza (olaparib) for multiple cancer types, the London-based company disclosed on Thursday.

The drug is an innovative, first-in-class oral poly ADP ribose polymerase (PARP) inhibitor. It is currently approved for BRCA-mutated ovarian cancer in multiple lines of treatment. However, there are 14 indications currently being developed across several tumour types, including breast, prostate, and pancreatic cancers. The strategic collaboration is expected to further increase the number of treatment options available to patients.

Under the terms of the agreement, the two companies will work together to develop and commercialise Lynparza, both as a monotherapy and as a combination treatment with other potential medicines. The partners will work independently to develop and commercialise the treatment in combination with their respective PD-L1 and PD-1 medicines, Imfinzi (durvalumab) and Keytruda (pembrolizumab).

The companies will also work together to develop and commercialise AstraZeneca's selumetinib, which is an oral, potent, selective inhibitor of MEK, part of the mitogen-activated protein kinase (MAPK) pathway. This treatment is currently being developed for multiple indications, including thyroid cancer.

The terms of the agreement state that the two companies will share the development and commercialisation costs for Lynparza and selumetinib monotherapy and non-PD-L1/PD-1 combination therapy opportunities. They will fund all development and commercialisation costs of the drugs in combination with their own PD-L1 and PD-1 medicines.

Merck will pay AstraZeneca up to USD8.5bn in total consideration. This will include an upfront payment of USD1.6bn, USD750m for certain licence options, and up to USD6.15bn subject to successful achievement of regulatory and sales milestones.

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Publication:M2 EquityBites (EQB)
Date:Jul 27, 2017
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