Amendment comes as Metabasis strives to keep its head above water.
Struggling Metabasis Therapeutics has opted to receive a $6 million one-time fee from Merck & Co. in lieu of the $54 million it could have earned in milestones over the next several years. The firm reiterates that this money alone is insufficient to keep it operational for a long time and that more capital is needed.
The amendment was triggered by Merck’s selection of a lead candidate from its collaboration with Metabasis focused on AMP protein kinase activators for metabolic diseases. Excluding royalties, Metabasis could have earned approximately $54 million in cash if the product was successfully developed and marketed in a single indication. If a candidate was approved for additional indications, the total cash payments could have reached $74 million.
With Metabasis restructuring to save money since November 2008, however, the firm decided that near-term cash was more important. After three rounds of employee cutbacks, the company is left with a staff of seven, four clinical candidates, and three preclinical compounds. No one was immediately available from Metabasis to comment on the firm’s current operational status.
Besides Merck, Metabasis is also collaborating with Roche on HCV. On June 5, it received $2 million with Roche choosing a clinical candidate for development. The collaboration, which focused on applying Metabasis’ HepDirect® liver-targeting technology to Roche’s lead nucleosides, was initiated with $10 million in August 2008. At the time, Roche agreed to pay $193 million in milestones per compound being developed.
The arrangement with Merck started with a $5 million fee in June 2005, and Merck was to fund research for the next three years. Then in April 2008, the partnership was extended until June 2009 with Merck paying $1.5 million to support research for the additional year.