Tokyo
Merck has entered into a significant agreement with Daiichi Sankyo, involving a payment of $5.5 billion, to collaborate on the development of three candidate cancer drugs. The collaboration is poised to potentially benefit Daiichi Sankyo by up to $22 billion based on the success of the cell-targeting therapies. Daiichi Sankyo’s shares surged by 14.4% in response to the deal, marking a substantial increase.The drug candidates, belonging to the antibody drug conjugates (ADC) class, are currently in various stages of clinical development for the treatment of multiple solid cancer tumors. The partnership aims to expand the global reach of the three products to a wider patient population, thereby maximizing their commercial potential. Daiichi Sankyo will retain exclusive rights in Japan, while the companies will jointly develop and potentially commercialize the drugs worldwide.Under the terms of the agreement, Merck will make an initial payment of $4 billion to Daiichi Sankyo, along with additional continuation payments totaling $1.5 billion over the next two years. Further payments of up to $16.5 billion are contingent on achieving future sales milestones, amounting to $5.5 billion for each product.The deal signifies an important step for Daiichi Sankyo’s oncology drug pipeline, reflecting its strategic decision to collaborate with a strong partner to navigate the increasingly competitive landscape in ADC development. While the impact on both companies’ financial results has been outlined, the long-term implications of the collaboration are poised to redefine the trajectory of cancer therapy development and treatment.
