Merck could pay $1bn for cancer drug

 Merck & Co. has paid $120m to license a cancer drug from US company Endocyte – and it could end up costing them as much as $1bn.

Vintafolide (or EC145) is in phase III trial as a treatment for ovarian cancer and has five other potential indications in cancer treatment.

Merck will pay $120m upfront for global rights to the drug, with an additional $880m depending on its reaching milestones across all six indications.

An example of personalised medicine, Vintafolide is being developed with a companion diagnostic to select patients who will benefit from the drug.

Vintafolide combines folate (vitamin B9) with a chemotherapy agent, and is designed to target fast-growing cancer cells in ovarian, lung, breast, colon and renal cancers that actively take up folate.

The drug is currently being evaluated in a phase III clinical trial for ovarian cancer and a phase II trial for non-small-cell lung cancer.

Endocyte will retain ownership of its companion diagnostic agent, etarfolatide (or EC20), which identifies tumours that over-express folate receptors.

The milestone payments depend on the regulatory and commercial success of vintafolide in six cancer indications. Endocyte will receive 50% of profit in the US and over 10% of sales royalties in the rest of the world.

Endocyte has rights to co-promote vintafolide with Merck in the US. Merck has exclusive promotion rights in the rest of the world. Endocyte will fund and complete the current phase III ovarian cancer trial, whereas Merck will be responsible for other development activities.

The EC granted orphan drug status to vintafolide in March 2012, and Endocyte had planned to apply for EU marketing approval in the third quarter of 2012.

Peter S. Kim, President of Merck Research Laboratories, described vintafolide as “a promising and innovative late-stage cancer drug candidate”.

The deal reflects industry confidence in personalised medicine and in the value of licensing deals with drug development specialists.