Orion’s slimmed-down R&D focus appears to have been the right call as the Finnish biotech pockets $290 million from Merck & Co. for a prostate cancer drug.
The Big Pharma’s eye was caught by Orion’s drug ODM-208, which is in a phase 2 trial for metastatic castration-resistant prostate cancer. Merck will also the option to co-develop other drugs in the works at Orion that also target CYP11A1, an enzyme important in steroid production.
For Orion, the deal couldn’t come at a better time. In March, the Helsinki-based drug developer revealed plans to narrow its R&D focus to cancer and pain, at the expense of up to 37 staff layoffs.
ODM-208 is an oral, non-steroidal drug developed by Orion for the treatment of hormone-dependent cancers. By inhibiting CYP11A1 enzyme activity, ODM-208 is designed to suppress the production of all steroid hormones and their precursors that may activate the androgen receptor signaling pathway.
Under the deal, Merck and Orion will co-develop and co-commercialize ODM-208. Of the $290 million upfront payment, Orion will book about $220 million as income at the time of signing, and around $60 million will be reserved to cover Orion’s share of the drug’s development costs. The Finnish company will be responsible for the manufacture of the clinical and commercial supply of ODM-208.
Both companies will also have the option to convert the agreement into an exclusive global license for Merck, where the Big Pharma would assume full responsibility for all accrued and future development and commercialization expenses associated with the program. In this case, Orion would be eligible for milestone and double-digit royalty payments.
The total amount potentially accrued from multiple regulatory and sales milestone events in this scenario would represent a substantial opportunity for Orion, the company noted in a July 13 announcement.
“Targeting CYP11A1 provides a compelling approach to suppressing the production of steroid hormones, a key driver of prostate cancer,” said Dean Li, Ph.D., M.D., president of Merck's research laboratories unit. “We believe ODM-208 has the potential to complement our existing program in prostate cancer and look forward to working with the team at Orion.”
Merck already has an extensive clinical development program for prostate cancer evaluating its blockbuster Keytruda as a monotherapy and in combination with Lynparza and other anti-cancer therapies.
For Orion, the licensing deal represents another successful cancer deal with a Big Pharma. The company has previously worked with Bayer to develop Nubeqa, an oral androgen receptor inhibitor that won FDA approval for prostate cancer in 2019.