Merck and Endocyte in $1 billion drug deal

Merck & Co Inc said it acquired the development and marketing rights to Endocyte Inc’s experimental cancer drug for $120 million in cash and up to $880 million in milestone payments. According to the deal, Endocyte will be responsible for majority of funding and completion of the ovarian cancer trial. It will receive an equal share of profits in the United States, if the drug is approved. Merck, through a subsidiary, will gain worldwide rights to commercialise the drug vintafolide. Vintafolide is currently being tested in a late-stage trial for ovarian cancer and a mid-stage trial for non-small cell lung cancer. Endocyte had planned to file for marketing approval for the drug in the third quarter of 2012. Vintafolide was granted an orphan drug status in Europe last month. “Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types,” said Peter S. Kim, executive vice president and president Merck Research Laboratories. “This agreement underscores our strategy of building a portfolio of oncology therapeutics that employ a companion diagnostic to facilitate selection of those patients most likely to respond to treatment.” Under the agreement, Merck, through a subsidiary, will gain worldwide rights to develop and commercialise vintafolide. Endocyte will receive a $120 million upfront payment and is eligible for milestone payments of up to $880 million based on the successful achievement of development, regulatory and commercialization goals for vintafolide for a total of six cancer indications.