Signing a sweet deal

WHITEHOUSE STATION, N.J.—While on the surface, it seemsstrange for two giant pharmaceutical companies to collaborate on anything, itappears that lately, many are doing just that in order to make an impact in the$35-billion global diabetes drug market.

Collaborations are a trend in targeting the SGLT2 pathway, asodium-glucose transport protein in the kidneys. Blocking the SGLT2 receptorsmeans blocking excess blood glucose. Many large pharmaceutical companies areworking on drugs in this arena.

Thus, it was not so surprising when Merck & Co. Inc. andPfizer Inc. announced they have entered into a worldwide (except Japan)collaboration agreement for the development and commercialization of Pfizer'sertugliflozin (PF-04971729). The investigational oral sodium glucosecotransporter (SGLT2) inhibitor is being evaluated for the treatment of type 2diabetes. Ertugliflozin is Phase III ready, with trials expected to begin laterin 2013.

Merck, through a subsidiary, and Pfizer will collaborate onthe clinical development and commercialization of ertugliflozin andertugliflozin-containing fixed-dose combinations with metformin and JANUVIA(sitagliptin) tablets. Merck will continue to retain the rights to its existingportfolio of sitagliptin-containing products. Pfizer has received an upfrontpayment and milestones of $60 million and will be eligible for additionalpayments associated with the achievement of pre-specified future clinical,regulatory and commercial milestones.

Merck and Pfizer will share potential revenues and certaincosts on a 60/40 percent basis. The companies believe that the global collaboration combines Merck'sstrengths in diabetes drug development and commercialization with Pfizer'sglobal scale and expertise in primary care.

"We are pleased to join forces with Merck in the battleagainst type 2 diabetes and the burden that it poses on global health," saysJohn Young, president and general manager of Pfizer Primary Care. "Through thiscollaboration, we believe we can build on Merck's leadership position indiabetes care with the introduction of ertugliflozin, an innovative SGLT2inhibitor discovered by Pfizer scientists."

Ertugliflozin will be studied in combination with metforminand in combination with sitagliptin, Januvia (DPP-4 inhibitor) brought to thecollaboration by Merck, he explained. Fixed-dose combinations of sitagliptinand ertugliflozin have the potential "to offer physicians and patientsalternative effective, safe and well-tolerated treatment options compared toolder, generic, oral anti-diabetic medications such as sulfonyl ureas andthiazolidinedione, which are associated with weight gain and hypoglycemia."

Phase III clinical trials are expected to begin later thisyear. The companies anticipate that they will enter into business transactions,including licensing arrangements, partnerships and others.

"Merck continues to build upon our leadership position inthe oral treatment of type 2 diabetes through our own research and businessdevelopment," says Nancy Thornberry, senior vice president and diabetes and endocrinologyfranchise head of Merck Research Laboratories.

Merck is going to "focus on research and development as wellas collaboration opportunities to further expand our strong portfolio ofdiabetes treatment options to address the unmet needs of patients globally,"she says, adding that the licensing agreement reflects Merck's ongoingcommitment to the treatment of type 2 diabetes.

"We believe ertugliflozin has the potential to complementour strong portfolio of investigational and marketed products, and we lookforward to our collaboration with Pfizer to develop ertugliflozin," Thornberryadds.

Ertugliflozin differs from other SLGT2 candidates now inclinical trials from other pharmaceutical companies, because it is a highlypotent, selective SGLT2 inhibitor, according to Merck. Because it has been efficacious andgenerally well tolerated in the clinical studies to date, Merck believes thismechanism will be complementary to the DPP-4 mechanism of action.

Also, according to Merck, one distinct advantage of thiscollaboration, for patients and prescribers, is Merck's ability to potentiallycombine ertugliflozin with JANUVIA (sitagliptin) tablets, Merck'smarket-leading DPP-4, which has wide acceptance globally. The collaboration will not only enablepotential commercialization of a combination product, but also speed itsacceptance worldwide because of Merck's DPP-4 franchise.

Merck plans to continue to invest in the DPP-4 mechanismwith JANUVIA and omarigliptin (MK-3102), its once-weekly molecule. The companysays it is "very pleased to announce this collaboration with Pfizer to developand commercialize its SGLT2 inhibitor, ertugliflozin," and "is constantlyevaluating other mechanisms."