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Merck (MRK) Buys Rights to Mid-Stage Prostate Cancer Candidate

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Merck (MRK - Free Report) announced that it is in-licensing co-development and co-commercialization rights to Finnish pharmaceutical company, Orion Corporation’s pipeline candidate, ODM-208 being developed for the treatment of metastatic castration-resistant prostate cancer.

ODM-208 is an oral, non-steroidal inhibitor of CYP11A1, an enzyme that suppresses the production of steroid hormones, which play a key role in causing prostate cancer. ODM-208 is currently in a phase II study for the treatment of metastatic castration-resistant prostate cancer.

For the deal, Orion will receive an upfront payment of $290 million from Merck while also being eligible to receive development-based milestone payments as well as tiered double-digit royalties on sales if the product is approved. The deal also includes an option for Merck to acquire a global exclusive license to Merck compared to the present co-development and co-commercialization agreement.

Merck stock has risen 22.3% this year so far compared with an increase of 4.3% for the industry.

 

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The deal strengthens Merck’s cancer pipeline, which comprises mainly label expansion studies on its blockbuster PD-L1 inhibitor, Keytruda. Keytruda is already approved for the treatment of many cancers globally. Numerous recent approvals and the expected launch of many additional indications, including in earlier lines of therapy, can further boost sales. Keytruda is presently approved to treat five indications in earlier-stage cancers in the United States. In the United States, Merck expects over half of Keytruda’s growth to come from indications in early-stage (neoadjuvant/adjuvant) treatment settings through 2025 and to represent roughly 25% of total global Keytruda sales by that time.

Keytruda is being studied in phase III studies for biliary tract, gastric, hepatocellular, cutaneous squamous cell, mesothelioma, ovarian, prostate cancers, among others.

Another key cancer drug, Lynparza is also being evaluated in combination with Keytruda for colorectal cancer, NSCLC and SCLC. Lenvima, developed in partnership with Eisai, is being studied in combination with Keytruda for colorectal, gastric, esophageal, head and neck squamous cell carcinoma, melanoma and NSCLC cancers.

Please note that Merck markets Lynparza in partnership with AstraZeneca (AZN - Free Report) .

AstraZeneca and Merck had formed a profit-sharing deal to co-market Lynparza and Koselugo in July 2017. AstraZeneca and Merck’s Lynparza is approved for four cancer types, namely, ovarian, breast, prostate and pancreatic.

Zacks Rank & Other Stocks to Consider

Merck has a Zacks Rank #2 (Buy). Some other top-ranked stocks include Bayer (BAYRY - Free Report) and Jazz Pharmaceuticals (JAZZ - Free Report) . While Jazz Pharmaceuticals sports a Zacks Rank of 1 (Strong Buy), Bayer has a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bayer’s stock has risen 6.6% this year so far. Earnings estimates for 2023 have gone up from $2.13 per share to $2.17 per share over the past 90 days.

Earnings of Bayer beat estimates in each of the last four quarters, the average surprise being 17.71%.

Jazz Pharmaceuticals stock is up 20.9% this year so far. Earnings estimates for 2022 have gone up from $16.50 per share to $17.06 per share over the past 90 days while those for 2023 have increased from $18.04 per share to $18.15 per share.

Earnings of Jazz Pharmaceuticals beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 12.81%.

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