Merck takes control of Ariad cancer program in $583M deal

Merck has opted to move into the driver's seat to steer the development of Ariad's late-stage cancer therapy ridaforolimus. The pharma company (ARIA) is taking direct control over the clinical development of the drug, paying Cambridge, MA-based Ariad $50 million upfront along with $19 million to reimburse the biotech for its R&D expenses to date and a reconfigured $514 million in regulatory and sales milestones.

Ridaforolimus is an mTOR inhibitor now in Phase III for advanced sarcomas. And the deal appears to mark a significant change for Ariad's business plan, which had included building a sales force around the launch of its first cancer drug. In a press conference this morning, Ariad CEO Harvey J. Berger, M.D. noted that the biotech company is retaining an option to handle 25 percent of the marketing work in the U.S., which allows the developer to get involved in commercialization work at a lower cost than it had expected earlier. Merck has already paid Ariad more than $125 million for its work developing the therapy.

Ariad's milestone package includes $25 million for acceptance of the new drug application by the FDA, $25 million for U.S. marketing approval, $10 million for European marketing approval, $5 million for Japanese marketing approval and $200 million in milestones based on achievement of "significant sales thresholds." Ariad also stands to gain tiered double-digit royalties from sales.

For Ariad, the shift in control gives the developer a chance to pivot to other prospects. "This will allow us to focus our resources on commencing the pivotal trial for our next promising product candidate - AP24534 - our investigational pan BCR-ABL inhibitor and on advancing development of AP26113 - our investigational ALK inhibitor," said Berger.

- check out the press release

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