Merck returns rights to ridaforolimus to Ariad, whose 4th-qtr net loss widens

US pharma giant Merck & Co (NYSE: MRK) has told partner Ariad Pharmaceutical (Nasdaq: ARIA) that it is terminating its license agreement for the global development and commercialization of ridaforolimus (proposed trade name Taltorvic), the latter’s mTOR inhibitor, in oncology.

By the terms of the 2010 agreement, this becomes effective in November 2014, at which time all rights related to ridaforolimus in oncology will be returned to Ariad, creating a new clinical and business opportunity for the company, said Ariad. The drug has failed to receive approval in the USA, where the Food and Drug Administration has requested additional clinical trials. Also, Merck pulled the European filing for ridaforolimus (The Pharma Letter November 30, 2012).

Under the agreement, Ariad had granted Merck an exclusive license to develop, manufacture and commercialize ridaforolimus in oncology, and Merck assumed responsibility for all activities related to the development, manufacture and commercialization of ridaforolimus and agreed to fund 100% of all ridaforolimus costs incurred after January 1, 2010. The agreement provided that Merck would develop ridaforolimus in multiple oncology indications. In addition, Merck had paid Ariad $75 million in up front and milestone payments and had agreed to pay the Company potential additional milestone payments of up to $289 million associated with potential regulatory filings and approvals and up to $200 million associated with the achievement of certain sales thresholds, subject to regulatory approval and commercialization of ridaforolimus.