Merck and Ariad in billion-dollar cancer drug pact

Merck and Ariad Pharmaceuticals have agreed to the terms of a potential billion-dollar global collaboration deal to develop and market Ariad’s cancer treatment known as AP23573.
Merck will initially pay Cambridge, MA-based drug developer Ariad $75 million, up to $452 million in milestone payments and up to $200 million in sales bonuses, Merck said today in a statement. It is estimated that Merck will also spend at least $200 million on development costs for the drug and an additional $200 million to cover portions of Ariad's global development costs.

Ariad’s AP23573 is part of a new class of cancer treatments known as mTOR inhibitors, which are designed to block mTOR proteins and interfere with cancer cell growth.

AP23573 has been designated both as a fast-track product and an orphan drug by the FDA and as an orphan drug by the European Medicines Agency for the treatment of soft-tissue and bone sarcomas.

In June 2006, Ariad unveiled promising results from a Phase II study showing that AP23573 was effective in treating sarcoma patients.

A Phase III trial for AP23573 is set to begin this quarter. 

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