Merck Strikes Deal with Taiho and Astex to Develop Therapies Targeting KRAS Mutations

Nearly one month after Merck reported its vaunted checkpoint inhibitor Keytruda showed promising results for lung cancer patients with KRAS mutations, the company is diving deeper into that territory through a new $2.5 billion licensing deal with Taiho Pharmaceutical and Astex Pharmaceuticals.

The three-way deal is focused on the development of small molecule inhibitors against several drug targets, including the KRAS oncogene, which are currently being investigated for the treatment of cancer, the companies said this morning. Roger M. Perlmutter, president of Merck Research Laboratories, said the goal is to pursue new treatment regimens that are designed to “to extend the benefits of highly selective therapies to more patients with cancer.” The agreement with Taiho and Astex, a subsidiary of Otsuka Pharmaceuticals, combines the small molecule assets and cancer cell signaling expertise from each of the companies to “enable development of the most promising drug candidates,” Perlmutter said in a statement.

KRAS is among the most frequently mutated oncogenes in cancer. It is estimated to occur in more than 90% of pancreatic cancers and approximately 20% of non-small cell lung cancers and is associated with poorer outcomes. In December, Merck reported Phase III findings that showed Keytruda improved overall survival, progression-free survival and overall response rate in lung cancer patients with a KRAS mutation. The Phase III findings showed that Keytruda provided those benefits as a first-line treatment for patients with metastatic nonsquamous non-small cell lung cancer whose tumors expressed PD-L1 regardless of KRAS mutation. KRAS has become a popular research target for multiple companies. In September, Amgen posted results of its experimental KRAS G12C AMG 510 which underwhelmed investors.

Under the terms of the agreement, Merck, Taiho and Astex will combine preclinical candidates and their data with knowledge and expertise from their respective research programs. Merck will then provide Taiho and Astex with an aggregate upfront payment of $50 million each. That small investment could spell big dividends worth $2.5 billion if the companies achieve preclinical, clinical, regulatory and sales milestones for multiple products. Tiered royalties on sales are also included in the back end of the deal. Merck will fund research and development and will be responsible for the commercialization of products globally. Taiho will hold onto co-commercialization rights in Japan and also has an option to promote in specific areas of Southeast Asia.

Teruhiro Utsugi, managing director of Taiho, said the alliance with Merck and Astex will accelerate the development of “a number of our mutant KRAS programs” due to the addition of external talent and resources.

“Together with our Taiho colleagues we are delighted to be working with Merck, one of the global leaders in oncology drug development, on this strategic alliance. This collaboration is another testament to Astex’s position as the leader in fragment-based drug discovery,” said Harren Jhoti, president and CEO of Astex said in a statement.