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May 6, 2014

Cardio Collab Could Net Bayer Up to $2.1B from Merck & Co.

  • Bayer and Merck & Co. said today they will co-develop and co-commercialize new cardiovascular therapeutics focused on modulators of the soluble guanylate cyclase (sGC) pathway, in a deal that could net Bayer as much as $2.1 billion.

    The collaboration will give Merck access to Bayer sGC modulators now in early R&D stages, as well as two Bayer drugs. One drug, Adempas™ (Riociguat), is an sGC stimulator approved by the FDA in October for two forms of pulmonary hypertension and is under development for additional indications. Adempas is the first in its drug class approved to treat pulmonary arterial hypertension and the first drug of any class to be shown to be effective for patients with chronic thromboembolic pulmonary hypertension.

    The other drug, vericiguat, is an investigational compound that is now the subject of two Phase IIb studies in worsening chronic heart failure.

    In return, Merck will pay Bayer $1 billion upfront, and up to an additional $1.1 billion in payments tied to sales milestones, namely future collective sales of Adempas and other collaboration compounds.

    "This collaboration demonstrates our commitment to sGC modulators, allowing us to better explore the potential of these promising cardiovascular compounds," Olivier Brandicourt, CEO of Bayer HealthCare, said in a statement.

    "Merck's expertise and global presence in the cardiovascular therapeutic area make it a collaboration party of choice for our sGC programs," Bayer CEO Marijn Dekkers, Ph.D., said in a statement. "We truly believe that this collaboration increases our chances of bringing new medicines to more patients, in line with Bayer's mission 'Science For A Better Life'."

    Bayer will lead the commercialization for Adempas in the Americas and Merck, elsewhere in the world. For vericiguat and other potential investigational sGC modulators, Bayer will lead commercialization efforts outside the Americas, leaving the Americas to Merck. Both companies will have the option to co-promote Adempas and follow-on sGC modulators in each other’s territories.

    Bayer and Merck said they will equally share costs and profits from the sGC modulators after implementing a joint development and commercialization strategy.

    The collaboration fits within the stated strategies of both pharma giants, since Bayer and Merck have both identified cardiovascular diseases among their areas of therapeutic focus.

    Bayer and Merck aren’t the only pharmas looking into sGC-based drugs. Ironwood Pharmaceuticals said April 29 that its research team advanced it into preclinical study an sGC-based development candidate.

    “We’re very excited about this program because soluble guanylate cyclase is a proven mechanism with the potential for broad therapeutic opportunity,” Mark Currie, CSO, told analysts during the company’s quarterly conference call.

    The Bayer-Merck cardiovascular drug deal is separate from Bayer’s $14.2 billion acquisition of Merck’s consumer products business, which includes widely sold products such as Afrin nasal sprays, Claritin allergy drugs, Coppertone sunblock, and Dr. Scholls foot care products.

    That deal creates the world’s second-biggest consumer health products company to Johnson & Johnson, and will be based at Bayer’s U.S. East Coast hub in Whippany, NJ. Bayer prevailed over Reckitt Bensicker, which said April 30 it was dropping out of talks, and rival bidders that included Boehringer Ingelheim, Novartis, Procter & Gamble, and Sanofi, Reuters reported, citing unnamed “people familiar with the matter.”

    Bayer and Merck are among pharma giants that have moved to restructure their businesses in recent weeks. On April 22, Novartis engineered four deals totaling $28.5 billion in which its a quartet of deals, totaling $28.5 billion, in which it bought the cancer business of GlaxoSmithKline (GSK), sold off most vaccine operations except flu vaccines to GSK, formed a consumer health joint venture with GSK, and sold its animal health division to Eli Lilly.

    AstraZeneca has rejected a $106 billion takeover offer from Pfizer, while Valeant Pharmaceutical International has made a hostile $45.7 billion bid for Botox maker Allergan.


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