Merck KGaA (MKGAF) recently announced that it will return all rights for safinamide to Newron Pharmaceuticals S.p.A. Merck KGaA had purchased exclusive worldwide rights to develop, manufacture and commercialize safinamide for Parkinson’s disease (PD) and other therapeutic applications in 2006.
The company’s decision to terminate the agreement was made as a part of the ongoing review and re-prioritization of its research & development (R&D) pipeline. Merck KGaA believes that safinamide has lesser market potential than what was initially anticipated.
As a result of the termination of this agreement, which will be effective in April 2012, Merck KGaA will record additional costs of about €40 million in the fourth quarter of 2011.
We note that the news of the termination of the agreement for safinamide comes only months after Merck KGaA announced its plans to withdraw its US and EU regulatory applications for cladribine for the treatment of relapsing-remitting multiple sclerosis.
Merck KGaA’s decision was based on the belief that data from ongoing clinical trials on cladribine would not have been sufficient to gain regulatory approval.
We believe that the impact of these events will be offset by the new deals and collaborations which the company has entered into recently. In mid-October 2011, Merck KGaA entered into a couple of agreements with Japanese pharma company, Ono Pharmaceutical Co. Ltd.
According to the first agreement, Merck KGaA will have worldwide (excluding Japan, Korea and Taiwan) license rights for the development and commercialization of ONO-4641, which is currently in mid-stage development for the treatment of multiple sclerosis.
The second license agreement provides Ono Pharma with the Japanese co-development and co-marketing rights to Stimuvax. Outside Japan, Stimuvax is currently being studied in late-stage trials as a treatment for patients suffering from non-small cell lung cancer. Within Japan, a mid-stage trial for the said indication is currently ongoing for the candidate. Merck KGaA obtained exclusive worldwide licensing rights for Stimuvax from Oncothyreon Inc. (ONTY).
Moreover, last month, Merck KGaA announced the acquisition of exclusive worldwide development and commercialization rights to multiple sclerosis (MS) candidate, PI-2301. PI-2301, which has completed early-stage studies in MS, is about to enter mid-stage trials. The candidate was being developed by Peptimmune Inc. prior to the deal.
We currently have a Zacks #3 Rank (short-term Hold rating) on Merck KGaA.
ONCOTHYREON INC (ONTY): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment