AstraZeneca could get $8.5 billion from cancer drug development deal with Merck

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AstraZeneca photo.

AstraZeneca and Merck & Co., Inc entered a cancer collaboration to co-develop and bring to mark AstraZeneca’sLynparza(olaparib) for multiple cancer types.

As part of the agreement, Merck will pay AstraZeneca up to $8.5 billion, including $1.6 billion up front, $750 million for certain license options and up to $6.15 billion contingent upon successful achievement of future regulatory and sales milestones.

Lynparza has been approved for some types of ovarian cancer.

According to AZ Lynparza’s potential uses have grown inin the last few years, with 14 indications currently being developed across several tumor types, including breast, prostate and pancreatic cancers.

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The companies will develop and commercializeLynparzajointly, alone and in combination with other potential medicines.

The companies will develop Lynparzain combination with Mercke’s Imfinzi and Merck’s heavily advertised Keytruda.

The companies will also work to bring to market AstraZeneca’s selumetinib, an oral, potent, selective inhibitor of MEK, part of the mitogen-activated protein kinase (MAPK) pathway, currently being developed for multiple indications including thyroid cancer.

Pascal Soriot, CEO, said: “Our strategic collaboration builds on scientific evidence that PARP and MEK inhibitors can be combined with PD-L1/PD-1 inhibitors for a range of tumors. He added, “This is a truly exciting step and we are pleased to work with Merck, a company that shares our passion for science to deliver new medicines for cancer patients.”

He added, “This is a truly exciting step and we are pleased to work with Merck, a company that shares our passion for science to deliver new medicines for cancer patients.”

Under the terms of the agreement, AstraZeneca and Merck will share the development and commercialization costs forLynparzaand selumetinib monotherapy and non-PD-L1/PD-1 combination therapy opportunities.

Gross profits fromLynparzaand selumetinib sales generated alone or in combination therapies will be shared equally.

Merck will fund all development and commercialization costs ofKeytrudain combination withLynparzaor selumetinib. AstraZeneca will fund all development and commercialization costs ofImfinziin combination withLynparzaor selumetinib.

AstraZeneca will continue to manufactureLynparzaand selumetinib.

The collaboration came as a trial of a combination of Merck and AstraZeneca drugs in the treatment of a type of lung cancer as an alternative to chemotherapy proved to be a disappointment.

The news led to a drop in the share prices of both companies.

Separately, AstraZeneca reported second quarter earnings that were in line with previous guidance.

Sales were hit by the loss of U.S. patent protection for former blockbuster products, the blood pressure drug, Crestor, and the Seroquel, a powerful drug used to treat serious mental illnesses.

Seroquel was developed in AZ’s now razed laboratories near Wilmington.

British-based AstraZeneca employs about 1,500 in Delaware and recently agreed to sell its office campus. The firm will occupy a portion of the site that once housed upwards of 4,000 staffers.

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