Merck (NYSE:MRK) has forged a deal with a biopharmaceutical company for its phase 3 platinum-resistant ovarian cancer treatment and nonsmall cell lung cancer in mid-stage development in a deal valued at up to $1 billion.
Under the terms of the deal, Merck, through a subsidiary, will get worldwide rights to develop and commercialize vintafolide for ovarian cancer that’s resistant to platinum-based chemotherapy treatment. Endocyte (NASDAQ:ECYT), the Indiana-based cancer therapeutics developer, will receive a $120 million up-front payment and is eligible for milestone payments of up to $880 million if it achieves certain development, regulatory and commercialization milestones for vintafolide for a total of six cancer indications, according to a company statement.
The majority of people with ovarian cancer suffer a recurrence, which can fall into one of two categories: platinum-sensitive and platinum-resistant.
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Endocyte will receive an equal share of the profit in the United States if vintafolide receives regulatory approval, along with a double-digit percentage royalty on sales of the product in the rest of the world. It will keep the right to copromote vintafolide with Merck in the U.S., but Merck has exclusive rights for the therapeutic in the rest of the world.
The clinical trials for both maladies will also use etarfolatide, a noninvasive companion diagnostic imaging agent that is used to identify folate receptor positive tumor cells.
Peter S. Kim, executive vice president and president of Merck Research Laboratories said in a statement: “Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types.”
Last month, the European Union granted orphan drug status to vintafolide. The status grants the company longer exclusivity and entitles it to certain tax breaks since it is designed to treat a patient population of 200,000 or less.
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Endocyte will be expected to finish some of the heavy lifting for vintafolide’s development, though. It will be responsible for the majority of funding and completion of a phase 3 clinical trial, with a cost estimated at $40 million — an amount that is subject to change.
Endocyte’s share price rocketed in value by more than 100 percent following the news to $7.72 by 12:25 p.m. The company filed its initial public offering in 2010. The therapeutics developer uses its proprietary technology to create novel small-molecule drug conjugates and companion imaging diagnostics for personalized targeted therapies.
Big Pharma companies have been keen to expand their pipelines through collaborations with smaller companies with drugs and therapeutics in mid- to late-stage development. The Whitehouse Station, New Jersey-based company’s research ventures arm struck a deal with Flagship Ventures in Massachusetts to invest in the venture capital’s $270 million Flagship Ventures Fund IV. The agreement gives Merck early notice of attractive therapeutic and drug development that complement its pipeline and provides Flagship with a powerful partner that can offer global development, regulation and commercialization know-how.
