Merck & Co has acquired the rights to a late-stage cancer drug in a deal that could be worth up to $1bn.
Endocyte's vintafolide is being investigated in six oncology indications, the most advanced of which are platinum-resistant ovarian cancer (phase III) and non-small cell lung cancer (phase II), and is being developed alongside a companion diagnostic.
The US biopharma's deal with Merck with see the larger pharma company develop and commercialise the drug in return for paying Endocyte a $120m upfront payment milestone payments of up to $880m depending on the vintafolide's success.
If the drug is approved, Endocyte will also receive an equal share of the profit for sales in the US, as well as a double digit percentage royalty on sales in the rest of the world.
"Vintafolide is a promising and innovative late-stage cancer drug candidate,” said Peter Kim, executive VP and president Merck Research Laboratories.
“In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types."
The move is also part of Merck's commitment to oncology treatments, said Kim, with the company facing patent expirations in previous key markets of asthma and allergies.
Vintafolide, which is being studied using Endocyte's investigational companion diagnostic agent, etarfolatide, has shown success in phase II trials in women with ovarian cancer that is resistant to platinum therapy.
In a trial comparing its use with pegylated liposomal doxorubicin (PLD) versus PLD alone, it managed to demonstrate a statistically significant delay in disease progression or death.
Endocyte will continue to be responsible for the majority of funding and completion of the ongoing phase III PROCEED trial in ovarian cancer, with Merck responsible for all other development activities and costs for vintafolide
The drug was also granted orphan status in March by the EU, where Endocyte plans to file a marketing authorisation application in the third quarter of 2012.