|Allergan's David Nicholson|
Merck is bowing out of the hectic late-stage scramble to be the first to market with a CGRP migraine drug, handing over its portfolio and two experimental drugs in the pipeline to Allergan for $250 million in cash.
Allergan ($AGN) is paying $125 million of that upfront and will hand over the remaining $125 million in the spring of 2016. In the meantime, it gains rights to Merck's ($MRK) Phase III-ready oral drug MK-1602 as developers schedule an end-of-Phase II talk with the FDA. MK-1602 should be in late-stage studies next year. Allergan is also getting MK-8031, which is headed into Phase II.
Merck and Allergan also agreed to a slate of milestones and a royalty deal, but they're keeping those numbers under wrap.
The deal leaves Allergan, which had already been focused on migraine drugs ahead of the big Actavis buyout, jumping into a development race where the leaders are already much further ahead.
For some time now, migraine sufferers have relied on triptans for relief, which constrict blood vessels in the brain as a way of spurring relief. A significant number of patients, though, don't respond to triptans. By going after CGRP, a group of developers believes they can blaze a new mechanism of action that can work in a more targeted fashion that can help more patients. But the leaders are pursuing injectable antibodies, and Allergan is jumping into the fray with oral drugs that could be much easier to market.
The deal raised some interesting questions for Evercore/ISI analyst Umer Raffat, who pointed out that Merck's (undisclosed) Phase II results are three years old.
"Merck has had liver tox on oral CGRPs in the past," noted Raffat. "These molecules are a "different chemical series" as per Allergan … but I still see a lot of structural similarities with failed Merck program. No clinical data disclosed on these programs thus far. But Merck clearly had data from the completed Ph II trial (834 patients)--and presumably Allergan looked at this data too … and felt comfortable in-licensing this program."
In recent days several of the giant drug companies engaged in the crowded CGRP race have been reporting the latest updates on data for their contenders. Amgen ($AMGN) just reported that 52 weeks of therapy with 70 mg of AMG334 cut the number of migraine days per month by 4.9 in a Phase II study, working off a baseline average of 8.7 mean monthly migraines.
Teva ($TEVA) had noted days before that that its migraine drug TEV-48125 had achieved a near 6-day reduction, working with a patient group that had a much higher baseline and an average placebo response of 3.34 days. At 225 mg, Teva's drug registered a 2.8-day improvement for migraine sufferers. As Evercore ISI analyst Umer Raffat noted, that rate easily beat out Amgen's earlier number, along with improvements over a rival drug from Alder Biopharmaceuticals ($ALDR) as well as Eli Lilly ($LLY).
Allergan doesn't seem daunted, though, as it completes back-to-back deals to beef up its pipeline. Just yesterday Allergan announced plans to buy Oculeve and its lead dry-eye candidate, a nerve-stimulating implant placed in the nose, for a down payment of $125 million.
"The agreement to acquire exclusive worldwide rights to Merck's CGRP migraine development program builds on our existing strength in neurosciences and helps position Allergan as a potential leader in the acute treatment of migraine and prevention of migraine for millions of patients," said David Nicholson, the EVP for global brands research and development at Allergan.
- here's the release