Broad cancer collaboration

Merck shells out $75 million upfront to co-develop Ariad’s mTOR inhibitor for multiple cancer indications

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CAMBRIDGE, Mass.—Ariad Pharmaceuticals and Merck & Co.announced in early July that the two companies will jointly develop andcommercialize AP23573, Ariad's novel mTOR inhibitor, as a treatment for avariety of cancers. The drug is slated to begin Phase III clinical trialswithin the next month for the treatment of mestastatic sarcomas.
Under the terms of the agreement, Merck will make an upfrontpayment of $75 million to Ariad, and could eventually end up paying a total ofmore than $727 million based on milestones and the initiation of additionalPhase II and Phase III trials.
But the Phase III trials for sarcoma could eventually onlybe a small scratch in the surface of what may become a broad-basedcollaboration targeting a number of different oncologies, say officials at bothcompanies.

"This is a high-value and validated oncology target withvery high interest in the industry," says Richard Pascoe, chief commercialofficer of Ariad. "Specifically, it is known that mTOR serves as a 'masterswitch' which has a central function in cancer cell growth, division andmetabolism. This is a drug that has great potential and the really nice thingabout this deal with Merck, is that they are just as excited about it as wehave been for some time."

Equally important for Ariad in this deal was the fact thatit will be much more involved in the sale of the AP236573 in the U.S.than is typical of these kinds of collaborations with deep-pocketed largepharma companies.

"Ariad will lead the distribution and book all sales of theproduct in the," notes Pascoe. "This is very important for us as a company as we lookto become forward integrated and prepare to develop other drugs that arecurrently in our pipeline. Clearly, the fact that there are multiple cancersinvolved really helped create this situation with Merck."

For Merck, it now locks up the market potential of a drugthat has been shown to be well-tolerated and with an impressive safety profileas shown by earlier studies.

Vlad Hogenhuis, GM, oncology, specialty and neurosciencefranchise at Merck notes that AP23573 "has the promise to allow us to bring an importantnew medicine to cancer patients globally. Merck is fully committed to the fieldof oncology, and this partnership further demonstrates that commitment as westrive to meet unmet medical needs in cancer."

While there is excitement about the AP23573 program, thereare plenty of other companies with keen interest in mTOR inhibitors. Notably,Wyeth's mTOR inhbitor Torisel was approved in late May as a treatment forkidney cancer, and Novartis has its own mTOR drug RAD001, an oral kinaseinhibitor that blocks the mTOR protein, currently in Phase I to III trials as atreatment for multiple tumor types.

The field may be crowdedfor mTOR cancer drugs, but there are sure to be multiple winners. Neither Mercknor Ariad officials would hazard a guess on the potential size of the marketconsidering the number of different forms of cancer these drugs could treat.Suffice to say, with potentially nearly three-quarters of a billion dollars atstake from Merck alone, you have to believe they're saying the word "blockbuster"in the back rooms of big pharma.

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