Merck & Co restructures cancer drug deal with Ariad, worth up to $583 million; has Fosamax injury case dismissed

Following an announcement earlier this year by US drug giant Merck & Co that it was reviewing its research priorities as a result of its $41 billion acquisition of Schering-Plough - including its potentially $1 billion deal with Ariad Pharmaceuticals, which caused the latter's shares to drop on fears that it would be cancelled (The Pharma Letter March 17), Merck says it has now restructured its co-development and co-commercialization agreement with Ariad for ridaforolimus.

Merck takes the driving seat

Under the restructured accord, Merck has acquired full control of the development and worldwide commercialization of ridaforolimus, an investigational, orally-available mTOR inhibitor currently being evaluated for the treatment of multiple cancer types. Ariad will receive a $50 million upfront fee and is eligible to receive milestone payments associated with regulatory filings and approvals of ridaforolimus in multiple cancer indications and achievement of significant sales thresholds of as much as $514 million, as well as a reimbursement of R&D expenses of $19 million. Merck has already paid Ariad more than $125 million for its work developing the drug so far.