AstraZeneca, Merck & Co. in $8.5-Billion Oncology Collaboration

July 28, 2017

Pharma majors AstraZeneca and Merck & Co. form $8.5-billion partnership to develop cancer therapies revolving around AstraZeneca’s PARP inhibitor, Lynparza.

AstraZeneca and Merck & Co. announced on July 27, 2017 that they have entered a global strategic oncology collaboration to co-develop and co-commercialize AstraZeneca’s Lynparza (olaparib) for multiple cancer types. Lynparza is an oral poly ADP ribose polymerase (PARP) inhibitor for treating BRCA-mutated ovarian cancer in multiple lines of treatment. It was approved by FDA in December 2014 and generated 2016 sales of $218 million.

Under the agreement, Merck will pay AstraZeneca up to $8.5 billion in total consideration, including $1.6 billion upfront, $750 million for certain license options, and up to $6.15 billion contingent upon successful achievement of future regulatory and sales milestones. AstraZeneca anticipates approximately $1 billion to be recorded under externalization revenue in 2017. The collaboration agreement was completed upon signing on July 26, 2017.  

Lynparza’s pipeline has grown in the past few years, with 14 indications currently being developed across several tumor types, including breast, prostate, and pancreatic cancers. This strategic collaboration is expected to further increase the number of treatment options available to patients. The companies will develop and commercialize Lynparza jointly, as monotherapy and in combination trials with other potential medicines. Independently, the companies will develop and commercialize Lynparza with their respective programmed death (PD)-L1 and PD-1 immuno-oncology drugs, Imfinzi (durvalumab) and Keytruda (pembrolizumab). The companies will also jointly develop and commercialize AstraZeneca’s selumetinib, an oral, selective inhibitor of MEK, part of the mitogen-activated protein kinase (MAPK) pathway, currently being developed for multiple indications, including thyroid cancer.

AstraZeneca and Merck will share development and commercialization costs for Lynparza and selumetinib monotherapy and non-PD-L1/PD-1 combination therapy opportunities. Gross profits from Lynparza and selumetinib product sales generated through monotherapies or combination therapies will be shared equally. Merck will also fund all development and commercialization costs of Keytruda in combination with AstraZeneca’s Lynparza or selumetinib. AstraZeneca will fund all development and commercialization costs of Imfinzi, approved by FDA in May 2017 for treating locally advanced or metastatic urothelial carcinoma, in combination with Lynparza or selumetinib. AstraZeneca will continue to manufacture Lynparza and selumetinib. In addition, AstraZeneca will book all product sales of Lynparza and selumetinib.

In addition to its approval in the United States, Lynparza is currently approved in the European Union for use as monotherapy for the maintenance treatment of BRCA-mutated ovarian, fallopian tube, or primary peritoneal cancer.

Selumetinib was licensed by AstraZeneca from Array BioPharma in 2003 and is in Phase III development for differentiated thyroid cancer, for which it was granted orphan drug designation by FDA in May 2016. Selumetinib is also being tested in a separate Phase II trial in pediatric neurofibromatosis type-1 and in a Phase I trial in advanced solid tumors.

Source: AstraZeneca and Merck & Co.