Merck Abandons Once-Promising Experimental Cancer Drug to Ariad

Merck

Merck & Co. Inc. (NYSE:MRK) has officially washed its hands of a once-lauded experimental cancer drug it invested in along with Ariad Pharmaceuticals Inc. (NASDAQ:ARIA) Merck informed Ariad last week that it was terminating its license agreement and handing back the drug to Ariad, FierceBiotech reports.

At one time, the drug, known as ridaforolimus, was considered a promising new cancer treatment. Merck originally planned to invest up to $700 million in the project, which yielded a phase 3 clinical trial in advanced sarcomas. The drug was then rejected, however, when the Food and Drug Administration claimed that due to the drug’s risk-benefit profile, it would require another trial. Prior to the drug’s rejection by the FDA, Merck had already paid Ariad about $200 million as part of the partnership.

“Last week, Merck informed us that it is terminating its license agreement for the global development and commercialization of ridaforolimus, our mTOR inhibitor, in oncology.” Ariad’s announcement says. “By the terms of the agreement, this becomes effective in November 2014 at which time all rights related to ridaforolimus in oncology will be returned to Ariad, creating a new clinical and business opportunity.”

Although Ariad claims Merck’s termination of the partnership provides new a “new clinical and business opportunity,” FierceBiotech notes that the company’s budget doesn’t reflect such faith. Of the $150 million Ariad has planned to spend on research and development in 2014, none has been allocated for ridaforolimus’s further development, although the press release does note that ridaforolimus has potential with a medical device company called Medinol, which is developing a ridaforolimus-eluting stent.

Instead of investing in ridaforolimus, Ariad plans to devote 75 percent of its research and development spending for 2014 to Iclusig, a recently reauthorized leukemia drug, according to the company’s press release and FierceBiotech’s report. The money will fund another phase 2 trial for the drug in patients with gastrointestinal stromal tumors, as well as an FDA-mandated study that will monitor the drug’s safety.

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