Merck KGaA (MKGAF) has decided to terminate its license agreement with Ono Pharmaceutical Co., Ltd. (OPHLF) related to the development of Ono Pharma’s multiple sclerosis candidate, ceralifimod (ONO-4641). Ceralifimod is under phase II development.
We remind investors that in Oct 2011, Merck KGaA had licensed exclusive development and commercialization rights to Ono Pharma’s ceralifimod outside of Japan, Korea and Taiwan. Merck KGaA decided to terminate the agreement since the candidate was not able to meet Merck KGaA’s threshold for further investment.
Although ceralifimod met the primary endpoint in a global phase II study in relapsing-remitting multiple sclerosis patients, Merck KGaA and Ono Pharma decided to terminate the agreement keeping in mind the major change in the multiple sclerosis market. With oral treatments like Biogen’s (BIIB) Tecfidera doing exceptionally well and gaining significant market share, Merck KGaA and Ono Pharma would have needed to conduct large and extensive phase III studies which would have led to a delay in the filing of a new drug application.
Currently, Merck KGaA is focusing on its immuno-oncology portfolio and has inked quite a few deals to boost its immuno-oncology pipeline. Last week, the company entered into an agreement with MorphoSys AG for the discovery and development of therapeutic antibodies against undisclosed immune checkpoints. With this deal, Merck KGaA’s cancer immunotherapy portfolio, which consists of both early-stage and late-stage candidates, will be strengthened.
Merck KGaA carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Gilead Sciences Inc. (GILD) and ARIAD Pharmaceuticals Inc. (ARIA). While Gilead carries a Zacks Rank #1 (Strong Buy) ARIAD holds a Zacks Rank #2 (Buy).
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