Merck boosts oncology footprint with OncoEthix acquisition
Merck will pay $110 million up front, with the potential for up to $265 million in milestones
KENILWORTH, N.J.—Merck, known as MSD outside of the United States and Canada, has announced the acquisition, through a subsidiary, of privately held OncoEthix, a Swiss biotechnology company that specializes in developing oncology drugs. Per the agreement, Merck will make an upfront payment of up to $110 million to OncoEthix, with the potential for milestone payments of up to $265 million if certain clinical and regulatory goals are achieved.
“Oncology is a priority area of focus for Merck and the acquisition of OncoEthix supports our strategy to prioritize the development of innovative molecules with the potential to improve the treatment of advanced cancers,” said Dr. Roy Baynes, senior vice president, global clinical development, Merck Research Laboratories. “The potential first-in-class oral BET inhibitor, OTX015, has demonstrated early promising activity in hematological cancers and strategically complements our broad immuno-oncology development program.”
OncoEthix' OTX015 is an investigational, novel oral BET (bromodomain) inhibitor currently undergoing Phase 1b studies for the treatment of hematological malignancies and advanced solid tumors. BET proteins play a significant role in regulating transcription of key regulators of cancer cell growth and survival, including c-Myc. Interim data from ongoing Phase 1 clinical studies have shown that OTX015 demonstrates meaningful clinical activity in patients with hematological malignancies. Last month marked the beginning of an international, open-label Phase 1 study evaluating the compound in five different solid tumors.
“We are delighted that OTX015 will now be in the hands of Merck, a company with a successful track record of developing cutting-edge therapies,” Bertrand Damour, CEO of OncoEthix, commented in a statement. “The acquisition underlines the promise that OTX015 has shown in the treatment of hematological malignancies, and the potential it has for the treatment of advanced solid tumors. We are confident that our transaction with Merck best positions OTX015 to be developed to its full potential in areas of high unmet medical need.”
This is the second acquisition for Merck this month. On Dec. 8, the company announced that it had entered into a definitive agreement with Cubist Pharmaceuticals Inc. to acquire Cubist for $102 per share in cash. The deal, which was unanimously approved by both companies' boards of directors, has an equity valuation of $8.4 billion and includes $1.1 billion in net debt and other considerations, for a total transaction value of roughly $9.5 billion. Merck expects the deal to add more than $1 billion in revenue for its 2015 base and, though it will be neutral to non-GAAP EPS in 2015, to be significantly accretive to non-GAAP EPS in 2016 and beyond.