Merck's ($MRK) new R&D chief Roger Perlmutter has been making it painfully clear recently that its PD-1 program for the cancer immunotherapy MK-3475 is the company's top pipeline prospect--and probably its best shot at winning some applause from restive Wall Street analysts. Now the company is licensing out one of its other mid-stage cancer drugs to rival AstraZeneca ($AZN) in an unusual move advertised as a strategic effort to further sharpen its oncology focus on a pair of late-stage star players.
In the deal AstraZeneca is paying Merck $50 million upfront and a slate of undisclosed milestones to bring in MK-1775, a WEE1 inhibitor that Merck took up because of its potential to spur repeated cell division, offering a new way to destroy cancer cells. In its release today the pharma giant said preclinical evidence suggested MK-1775 demonstrated that it had potential for combination with chemotherapy agents known for damaging DNA. It's currently in a Phase IIa study for ovarian cancer.
In many ways, it's an odd marriage of convenience between two struggling giants. AstraZeneca has been on a two-year deal frenzy aimed at rebuilding a pipeline that had grown so weak its biggest investors engineered a top-level coup to try and steer the company away from disaster. Merck, meanwhile, has an $8 billion R&D effort that's had a miserable 6-year run at drug development. And in conversations with analysts on Monday Perlmutter made it clear that MK-3475 is "the crown jewel," in the words of Leerink Swann's Seamus Fernandez.
Merck says the PD-1 drug along with its late-stage effort on vintafolide, in-licensed from Endocyte ($ECYT) last year in a billion-dollar deal, can get more focused attention. And a runner-up like MK-1775 will earn a bigger role at AstraZeneca, which has some combination products to work with.
"MK-1775 is a strong addition to AstraZeneca's growing oncology pipeline, which already includes a number of inhibitors of the DNA damage response," said Susan Galbraith, head of AstraZeneca's Oncology Innovative Medicines Unit. "The compound has demonstrated encouraging clinical efficacy data and we intend to study it in a range of cancer types where there is a high unmet medical need."
"Merck is committed to advancing potentially meaningful therapeutic options promptly for patients with cancer," said Iain Dukes, senior vice president and head of licensing and external scientific affairs at Merck. "We are pleased to enter this agreement with AstraZeneca to realize the potential of MK-1775 while we focus on advancing our later stage oncology programs, MK-3475 and vintafolide."
- here's the press release
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