Ariad, Merck deal

Ariad amended a 2007 deal with Merck, granting the pharma company exclusive, worldwide rights to develop and commercialize ridaforolimus for cancer. The partners previously shared co-exclusive rights to the small molecule mTOR inhibitor, which is in Phase III testing to treat metastatic soft-tissue and bone sarcomas. Under the restructured financial terms, Ariad will receive a new upfront payment of $50 million and about $19 million to cover development expenses incurred since Jan. 1. Ariad, which has already received $53.5 million in milestones from Merck under the deal, remains eligible for up to $514 million in milestones. Since Merck is assuming responsibility for all further development, Ariad is no longer eligible for $74.5 million in milestones associated with the start of four Phase III trials in cancer indications other than sarcoma (see BioCentury, July 16, 2007).

The partners will no longer split U.S. sales, with Ariad now eligible for royalties on U.S. sales, as well as increased royalties on global sales. Ariad also has an option to co-promote up to 20% of the sales efforts in the U.S. ...