Merck & Co., Inc.
) recently announced a strategic deal with
) for the development and commercialization of Pfizer's
ertugliflozin. The companies will also evaluate fixed dose
combinations of ertugliflozin with metformin and Merck's
Ertugliflozin is an investigational oral sodium glucose
cotransporter (SGLT2) inhibitor which is being developed for the
treatment of type II diabetes. Phase III studies on ertugliflozin
are expected to commence later this year.
We note that Pfizer and Merck are not the only companies
pursuing the development of SLGT2 inhibitors. While Invokana is
approved in the US, Forxiga is approved in the EU. Meanwhile,
empagliflozin is under development.
Terms of the Deal
Under this deal, Pfizer got $60 million in the form of upfront
and milestones payments from Merck. Additionally, Pfizer is
eligible for payments on the achievement of pre-specified
clinical, regulatory and commercial milestones. Revenues and a
few cost items will be shared between Merck and Pfizer in the
ratio of 3:2.
This collaboration signifies Merck's efforts to strengthen its
diabetes franchise. Merck's diabetes franchise has Januvia and
Janumet for the treatment of type II diabetes. Januvia, a DPP-IV
(dipeptidyl peptidase) inhibitor for type II diabetes, was
approved in Oct 2006. Since then, the product has done very well.
Sales have leapfrogged from $42.9 million in 2006 to $4,086
million in 2012. Merck combined Januvia and metformin (an oral
diabetes drug) into a single pill called Janumet. Combined sales
of the two drugs were $5.7 billion in 2012, up 22.6%. Currently,
Merck has a phase III type II diabetes candidate, MK-3102, in its
Merck and Pfizer carry a Zacks Rank #3 (Hold). Currently,
Cleveland BioLabs, Inc.
), carrying Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy)
respectively, appear more attractive.
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