AstraZeneca PLC Seals a $8.5 Billion R&D Cancer Tie-Up With Merck & Co.

Published: Jul 28, 2017

AstraZeneca PLC Seals an $8.5 Billion R&D Cancer Tie-Up With Merck & Co. July 27, 2017
By Alex Keown, BioSpace.com Breaking News Staff

KENNILWORTH, N.J. – Two pharma giants are combining forces to take on multiple cancers in a deal worth up to $8.5 billion.

This morning AstraZeneca and Merck announced a deal to use AstraZeneca’s PARP inhibitor Lynparza in combination with PD-1 inhibitors developed by both companies. Lynparza, which has been approved in the United States for the treatment of one type of ovarian cancer, will be combined with AstraZeneca’s Imfrinzi and Merck’s Keytruda. The companies said they will work independently to combine Lynparza with their own PD-1 inhibitors, but will work together in combination with other drugs. Additionally, the companies will work together to test Lynparza in combinations with other undisclosed drugs, the companies said this morning.

PARP stands for poly ADP ribose polymerase, which is an enzyme many cancer cells are more dependent upon than regular, healthy cells are.

Additionally, the two companies will work together to develop and commercialize AstraZeneca’s selumetinib, an oral MEK inhibitor. AstraZeneca is currently developing selumetinib for multiple indications including thyroid cancer.

Under terms of the deal between Merck and AstraZeneca, the U.S. company will pay AstraZeneca up to $8.5 billion for the deal. Merck will provide its transatlantic partner with $1.6 billion in upfront funding, as well as $750 million for certain license options. AstraZeneca could earn an additional $6.15 billion from future regulatory and sales milestones.

Shares of Merck are up more than 4 percent this morning, trading at $64.50 as of 9:30 a.m. AstraZeneca’s stock on the other hand is down more than 16 percent, trading at $28.48. While investors would normally be pleased with such a lucrative deal, AstraZeneca is down due to the failure of a critical Phase III lung cancer trial.

Pascal Soriot, AstraZeneca’s chief executive officer, said in a statement that bringing together the “expertise of two leading oncology innovators” the two companies will be able to accelerate Lynparza’s “potential to become the preferred backbone of many immuno-oncology combination therapies as the world’s first and leading PARP inhibitor.”

Merck CEO Kenneth Frazier echoed Soriot. He said the collaboration of the two companies will provide more treatment options for cancer patients.

“Merck continues to build its leadership in immuno-oncology with Keytruda as foundational in monotherapy and combination therapy, and this collaboration expands our oncology leadership into the growing targeted therapies of PARP and MEK inhibitors. We look forward to working with AstraZeneca to create greater value for patients and shareholders than if both companies worked independently,” Frazier said in a statement.

In March, AstraZeneca announced that Lynparza delayed the recurrence of ovarian cancer by more than two years compared to placebo in a Phase III study. The study demonstrated a significant improvement in progression-free survival (PFS) in germline BRCA-mutated (gBRCA), platinum-sensitive, relapsed ovarian cancer. The AstraZeneca drug is expected to line up against rival Tesaro’s niraparib, also a PARP inhibitor as a maintenance therapy for ovarian cancer patients.

Not only has Lynparza wowed with ovarian cancer, in February the company announced Lynparza in tablet form met primary endpoints in a Phase III trial to treat patients with HER2-negative metastatic breast cancer harboring germline BRCA1 or BRCA2 mutations. If approved for this type of breast cancer, Lynparza will be the first PARP inhibitor for that type of cancer.

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