Merck & Co. won’t continue with two drug candidates it previously agreed to co-develop with a Chinese biotech after clinching a pact with Japan’s Daiichi Sankyo Co., dealing a fresh blow to companies in China seeking to prove their chop in developing innovative cancer therapies.
Merck gave formal notice Saturday of its decision not to develop two antibody-drug conjugates yet to start clinical trials, Sichuan Kelun Pharmaceutical Co. said in a stock filing Monday. The US pharma giant last week secured rights to three similar drug candidates from Daiichi Sankyo in a deal valued at as much as $22 billion.
Kelun’s shares fell as much as 10% in morning trading in Shenzhen Monday, the most in more than two months.
The two drug assets Merck opted out of came from deals it previously struck with Kelun to co-develop nine ADCs — a type of cancer therapy that fights tumors without harming surrounding healthy cells. Cooperation with Merck on the other seven ADC candidates — three of which are in clinical trials — remains unaffected, Kelun said.
It’s not uncommon for pharma companies to bow out of drug development pacts with smaller biotechs. Merck’s decision, though, is the latest of several exits made by US or European drugmakers on agents discovered by Chinese firms, which are eager to show they can develop potential blockbusters and to bolster overseas revenue to buffer stagnant domestic drug prices.
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Earlier this year Novartis AG ended a partnership to co-develop two cancer drugs with Chinese drugmaker Beigene Ltd., even after one of them was approved for sale in the European Union. AbbVie Inc. also axed a deal to develop an anti-cancer antibody with Chinese biotech I-Mab. Biogen earlier this year pulled the plug on a program to co-develop a cancer therapy with InnoCare Pharma Ltd.
