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13 January, 2021 - 11:12 By Tony Quested

Astex lines up huge cash payback with Merck deal

Astex Pharmaceuticals (UK) – based at Cambridge Science Park – and its Otsuka group sister business Taiho Pharmaceutical Co appear to have hit the jackpot through a deal with US giant Merck & Co., Inc (MSD).

Neither the Japanese partners nor MSD will reveal financial details of the drug discovery transaction but Business Weekly intel suggests it could eventually net Astex and Taiho anything north of half a billion dollars based on similar global plays.

Astex president and CEO Harren Jhoti declined to discuss the financial specifics of the MSD but did concede that: “This is a hot area and thus pharma are having to pay commercial rates for deals.”

One recent deal struck last year between Genentech and Relay Therapeutics could be worth well in excess of half a billion dollars.

Taiho and Astex have granted an exclusive licence under their joint, small-molecule drug discovery program targeting SHP2 to Merck. 

An option for MSD to acquire the exclusive license to the Astex-Taiho SHP2 program was included as part of the strategic oncology collaboration between MSD, Astex and Taiho, announced in January 2020. 

The collaboration focuses on the discovery and development of small molecule inhibitors against several drug targets, including the KRAS oncogene, which are currently being investigated for the treatment of cancer. 

SHP2, a dephosphorylating enzyme, is a signalling molecule which regulates various cellular processes including cell proliferation and differentiation, and acts as a regulator in the activation of the RAS signalling pathway such as KRAS.

In exchange for providing MSD with an exclusive global licence to their small molecule SHP2 inhibitor candidates, Taiho and Astex will receive an option-exercise fee payment and be eligible to receive further undisclosed payments contingent upon the achievement of clinical, regulatory and sales milestones for SHP2 products, as well as tiered royalties on sales. 

MSD will be solely responsible for funding all further research and development and will be responsible for commercialisation of SHP2 products globally. Taiho has retained co-commercialisation rights in Japan and an option to promote SHP2 products in specific areas of Southeast Asia.

Harren Jhoti said: “Together with our Taiho colleagues, we are delighted to extend our strategic alliance with MSD to include assets from our joint SHP2 program that have been generated using our leading fragment-based drug discovery approach.”

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