ARIAD rises on decision to co-promote ridaforolimus with Merck & Co on US approval

ARIAD Pharmaceuticals (Nasdaq: ARIA) saw its shares jump 5.5% to $5.93 when it revealed that it has opted to exercise its option with partner drug giant Merck & Co (NYSE: MRK) to co-promote ridaforolimus, an investigational mTOR inhibitor, in the sarcoma indication on its potential approval in the USA next year.

Based on the terms of the license agreement that ARIAD and Merck entered into in May 2010 for the development, manufacture and commercialization of ridaforolimus in oncology, ARIAD has the option to co-promote ridaforolimus with up to 20 percent of the sales effort for the product in all indications in the USA, and Merck will compensate ARIAD for its sales efforts. The deal, which has a potential value of some $1 billion to ARIAD, was originally struck with Schering-Plough, which Merck acquired and has since re-negotiated (The Pharma Letter May 6, 2010).

“The decision to co-promote ridaforolimus upon potential launch in 2012 is consistent with our plans to build a fully integrated commercial oncology company and dovetails with the potential launch of ponatinib, our investigational pan-BCR-ABL inhibitor, in patients with resistant or intolerant chronic myeloid leukemia in late 2012 or early 2013,” stated Harvey Berger, chairman and chief executive of ARIAD.