Ariad views progress in negotiations with Merck & Co on ridaforolimus

Cambridge, Massachusetts-based Ariad says it is engaged in advanced negotiations with US drug giant Merck & Co regarding the terms of a revised collaboration agreement for the development and commercialization of ridaforolimus, its investigational mTOR inhibitor, originally signed in 2007. At the time, the deal allowed for more than $1 billion in potential payments to Ariad, depending on progress in advancing the drug.

Shares of Ariad, which made the disclosure in a regulatory filing Tuesday, slipped nearly 4% to $3.80 in early trading yesterday. Since completing its $41.1 billion acquisition of Schering-Plough last year, Merck has reviewed and prioritized its R&D pipeline projects, and has already pulled out of a developmental project, returning full worldwide development and commercialization rights for the anti-fungal therapy AN2690 to Anacor, (The Pharma Letters passim).

'We have made excellent progress in these negotiations and anticipate that a revised agreement will be finalized and executed in the second quarter of 2010,' stated Harvey Berger, chairman and chief executive of Ariad, noting: 'Although we cannot assure that such agreement will be reached, we have seen a strong commitment from Merck to bringing this process to fruition.' He added: 'A revised collaboration agreement, including the annual global development plan and associated budget, will provide important clarity on the available funding resources and potential scope of development for ridaforolimus.'