For $50 million up front and up to $514 million in milestones, Merck takes lead on mTOR inhibitor.

Merck is paying Ariad Pharmaceuticals $50 million to take over full development and commercialization rights to the latter’s mTOR inhibitor, ridaforolimus, which is currently in Phase III trials against sarcoma. The new deal represents a restructuring to the companies’ original ridaforolimus agreement, signed in 2007.

Under terms of the amended deal, Ariad could also receive up to $514 million in regulatory and sales milestones if the drug is approved for multiple cancer indications, as well as global royalties in lieu of a profit split. Potential milestone payments of over $65 million are associated with the sarcoma indication. Merck will in addition reimburse Ariad for ridaforolimus-related expenses incurred since January 2010. Ariad estimates this to be in the region of $19 million. The firm retains an option to carry out minority co-promotion activities for ridaforolimus in the U.S.

The new deal has been under negotiation with Merck for over a year; it brings  in near-term cash payments of some $69 million and removes Ariad’s obligation to fund 50% of ridaforolimus-related development costs, explains Harvey J. Berger, M.D., Ariad’s chairman and CEO. “This will allow us to focus our resources on commencing the pivotal trial for our next promising product candidate, AP23534, our investigational pan BCR-ABL inhibitor, and on advancing development of AP26113, our investigational ALK inhibitor.” In December 2009 Ariad reported positive results from an ongoing Phase I trial with AP23534 in patients with advanced hematological cancers. In March the drug was granted orphan drug status by the U.S. and EU authorities for the treatment of chronic myeloid leukemia.

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