How many partners does Merck have?
In common with other pharmaceutical companies Merck does not disclose its exact number of partners. Merck’s website, however, indicates the company has hundreds of collaborations with companies, institutions, academic and other organisations worldwide. Since 1999 the number alliances Merck has formed has risen from ten to 55 a year.
What income does Merck generate from partnerships?
The company reports that eleven of its 20 new products launched since 1995 originated from collaborations and that a third of its sales (more than $8 billion) are related to alliance products and patents. Each year Merck reports some its joint venture product revenues in its 10K SEC filing. In 2008 joint venture product revenue represented at least 28% of pharmaceutical, vaccine and infectious disease products revenues. This is a sharp rise from 10% in 2004. Merck’s revenue from alliance products is much higher than that reported for Pfizer. In 2008 Pfizer’s partnership-derived income represented 5% of the company’s pharmaceutical revenues.
|Pharmaceutical, vaccine and infectious disease segment revenues||23,620||23,939||22,080||21,663||22,564|
|Revenue from key joint venture products*||6,658||6,844||5,051||3,543||2,308|
|% total revenues||28%||29%||23%||16%||10%|
*An important component of Merck’s revenue comes from the following key joint ventures.
- In 2000 Merck and Schering-Plough Corporation entered into agreements to create separate equally-owned partnerships to develop and market in the United States new prescription medicines in the cholesterol-management and respiratory therapeutic areas. These agreements provided for equal sharing of development costs and for co-promotion of approved products by each company. In 2001, the agreements were expanded to include all the countries of the world, excluding Japan. Two important drugs currently providing important income for Merck come from this venture: Vytorin and Zetia.
- In 1989 Merck formed a joint venture with Johnson & Johnson to develop and market a broad range of nonprescription medicines for U.S. consumers. This 50% owned joint venture was expanded into Europe in 1993, and into Canada in 1996. Significant joint venture products are Pepcid AC (famotidine), an over-the-counter form of Merck’s ulcer medication Pepcid (famotidine), as well as Pepcid Complete, an over-the-counter product which combines Merck’s ulcer medication with antacids (calcium carbonate and magnesium hydroxide). In March 2004 Merck sold to Johnson & Johnson its interest in the European joint venture.
- In 1994 the Merck Vaccine Division and Pasteur Mérieux Connaught (now Sanofi Pasteur S.A.) formed a joint venture to market human vaccines in Europe and to collaborate in the development of combination vaccines for distribution in the then existing EU and the European Free Trade Association. Merck and Sanofi Pasteur contributed, among other things, their European vaccine businesses for equal shares in the joint venture.
Overall the joint venture with Schering-Plough has been bringing in the largest proportion of income to Merck from the joint venture products, representing 69% of all three ventures in 2008.
|Revenue from joint venture products with Schering-Plough||4,561||5,186||3,884||2,425||1,185|
|% total joint venture revenue||69%||76%||77%||68%||51%|
|Revenue from joint venture products with Sanofi-Pastuer||1,885||1,438||914||865||807|
|% total joint venture revenue||28%||21%||18%||24%||35%|
|Revenue from joint venture products with Johnson & Johnson||212||220||253||253||315|
|% total joint venture||3%||3%||5%||7%||14%|
Where does Merck source its partners?
Merck seeks collaborations from various sources and has specially tasked scouts with scientific backgrounds. Each scout is assigned a particular region and expected to get to know companies within that region. The company has scouts based in Japan, Europe, Korea, China and the USA.
Merck sees external research collaborations as a way to diversify its scientific portfolio. The company has an extensive licensing and external alliance strategy focused on the entire spectrum of collaborations from early research to late-stage compounds and new technologies.
Merck has recently established a team for early-stage collaboration with the goal of delivering 25% of Merck’s early pipeline through external collaborations in the next 3 to 5 years. Currently the early-stage group is managing more than 20 major research collaborations and more than 15 contract partnerships across the globe. These partnerships cover a wide range of disease areas and discovery stages. They range from collaborations with academic groups to biotech companies and contract research organisations.
Who are Merck’s partners?
Obviously generating a complete list of Merck’s partners would be a time-consuming task but the company has listed the following companies as partners for the period 2002-2009. Please note that some of these partnerships may have been subsequently terminated.
Actelion, Addex, Advinus, Ambrx, Ariad, Artemis, Asuragen, AstraZeneca, Avalon, Celera Diagnostics, Codexis, Compugen, Crucell, CSL, Cubist, Dana – Faber, Galapagos, GeneGo, Geron, Gtx, Harvard University, Idera, Inovio, Insmed, Intercell, Iomai, Japan Tobacco, Johnson & Johnson, J. David Gladstone Institute, KineMed, Kyorin, Marcadia, Medarex/Mass Biologics, Melior Discovery, Metabasis, MicroDose, Moffitt Cancer Center, MorphoSys, Mouse Clinical Institute, Neuromed, Piramal Life Sciences, NicOx, Novacardia,,Nuevolution, Orchid, Paratek, PDL, Pierre Fabre, PPD Development, Prosidion, Ranbaxy, Robarts, Santen, Sanofi-Pasteur, Schering-Plough, Shanghai Biochip, Shasun, Target Genetics, UTSA/Health Science Center, Vertex, Xencor and Xenon.
The areas Merck has partnerships in include the following: Alzheimer’s disease, antibiotics, antibodies, biologics, biomarkers, cardiovascular, CNS, delivery platform, delivery technology, diabetes, endocrine, genomics, imaging technology, infectious disease, metabolic disorders, obesity and diabetes, oncology, ophthalmology, osteoporosis, pain, Parkinson’s disease, respiratory, RNAi technology, schizophrenia, technology and vaccines.
What collaborations has Merck entered into over the past couple of years?
Some of the collaborations Merck has announced include the following:
- In June 2009 AstraZeneca and Merck announced a collaboration to research a novel combination anticancer regimen composed of two investigational compounds, MK-2206 from Merck and AZD6244 (ARRY-886) from AstraZeneca. Under the agreement AstraZeneca and Merck are to work together to evaluate co-administration of the compounds in a Phase I clinical trial for the treatment of solid cancer tumors. All development costs are to be shared jointly. Following the Phase I trial, the companies will consider opportunities for further clinical development.
- In April 2009 Merck announced it had entered a collaboration and license agreement with Cardiome Pharma Corporation for the development and commercialization of vernakalant, an investigational candidate for the treatment of atrial fibrillation. The agreement gives Merck exclusive global rights to the oral formulation of vernakalant and its affiliate, Merck Sharp & Dohme (Switzerland) GmbH, the exclusive rights to the intravenous formulation of vernakalant outside of the United States, Canada and Mexico. Merck paid Cardiome an initial fee of $60 million for research and development expenses and could pay Cardiome up to $200 million in milestone payments for the development and approval of vernakalant products. Cardiome is also set to receive tiered royalty payments on sales of any approved products and up to $340 million in milestone payments based on achievement of significant sales thresholds. Cardiome retains an option to co-promote vernakalant (oral) with Merck through a hospital-based American sales force. Merck takes responsibility for all future costs associated with the development, manufacturing and commercialisation process. Merck has granted Cardiome a secured, interest-bearing credit facility of up to $100 million that Cardiome may access from 2010 in tranches over several years.
- In April 2009 Merck entered an exclusive worldwide license agreement with Medarex Inc and Massachusetts Biologic Laboratories (MBL) of the University of Massachusetts Medical School for CDA-1 and CDB-1 , an investigational fully human monoclonal antibody combination developed for the treatment of C. difficile infection. CDA-1 and CDB-1 were co-developed by Medarex and MBL. Under the agreement Merck gained worldwide rights to develop and commercialise the drug and paid an upfront payment of $60 million to Medarex and MBL. Merck has agreed to pay additional cash milestone payments up to $165 million. Upon commercialisation, Medarex and MBL could receive double-digit royalties on product sales.
- In April 2009 Merck and Santen Pharmaceutical Co Ltd entered a worldwide licensing agreement for tafluprost, a prostaglandin analogue under investigation in the United States. Tafluprost has received marketing approval for the reduction of elevated intraocular pressure in open-angle glaucoma and ocular hypertension in several European and Nordic countries as well as Japan and has been filed for approval in additional European and Asia Pacific markets. Under the terms of the agreement, Merck paid an upfront fee and is to pay milestones and royalty payments based on future sales of tafluprost. The agreement gives Merck the exclusive commercial rights to tafluprost in Western Europe (excluding Germany), North America, South America and Africa. Santen retains commercial rights to tafluprost in most countries in Eastern Europe, Northern Europe and Asia Pacific, including Japan. Under the agreement Merck is to provide promotion support to Santen in Germany and Poland. If approved Santen has an option to co-promote tafluprost in the United States.
- In February 2009 Merck agreed to purchase Insmed Inc’s portfolio of follow-on biologic therapeutic candidates and its commercial manufacturing facilities located in Boulder, Colorado. Under the terms of the agreement, Merck paid Insmed $130 million. Insmed’s follow-on biologics portfolio includes two clinical candidates: INS-19, an investigational recombinant granulocyte-colony stimulating factor aimed at preventing infections in patients with cancer receiving chemotherapy, and INS-20 designed to allow for less frequent dosing. $10 million for INS-19 and INS-20. Merck made upfront payments of $10 million and has no further milestone or royalty obligations
- In September 2008 Merck and Japan Tobacco Inc (JT) signed a worldwide licensing agreement to develop and commercialize JTT-305, an investigational oral osteoanabolic (bone growth stimulating) agent for the treatment of osteoporosis. JTT-305 is currently being evaluated by JT in Phase II clinical trials in Japan for its effect on increasing bone density and is in Phase I clinical trials outside of Japan. Under the terms of the agreement, Merck gained worldwide rights, except for Japan, to develop and commercialize JTT-305 and certain other related compounds. JT received an upfront payment of $85 million and could receive additional cash payments upon achievement of certain milestones associated with the development and approval of the drug as well as royalties from sales of any drug receiving marketing approval.
- In 2007 Merck entered an agreement with ARIAD Pharmaceuticals for the joint development and commercialisation of MK-8669, deforolimus, a novel mTor (mammalian target of rapamycin) inhibitor aimed at treating cancer. The drug candidate is currently in a Phase III study in patients with metastatic soft-tissue or bone sarcomas. Merck expects to file an NDA with the FDA in 2010.
- In 2007 Merck and GTx, Inc announced a research and development and global strategic collaboration for selective androgen receptor modulators, a new class of drugs with the potential to treat age-related muscle loss (sarcopenia) as well as other musculoskeletal conditions.
- In 2006 Merck and Idera Pharmaceuticals formed a broad collaboration to research, develop and commercialise Idera’s Toll-like Receptor agonists for use in combination with Merck’s therapeutic and prophylactic vaccines under development for oncology, infectious diseases and Alzheimer’s disease.
- In 2006 Merck and Ambrilia Biopharma Inc entered into an exclusive licensing agreement granting Merck the worldwide rights to Ambrilia’s HIV/AIDS protease inhibitor program.
- In 2006 Neuromed Pharmaceuticals Ltd and Merck signed a research collaboration and license agreement to research, develop and commercialise novel compounds for the treatment of pain and other neurological disorders.
Impact of merger with Schering-Plough on alliances
The planned merger between Merck and Schering-Plough will increase Merck’s portfolio of alliances. It is unclear which alliances Schering-Plough will bring to the merger. Some important collaborations Schering-Plough has started recently include:
- In February 2009 Schering-Plough announced a license agreement between Nobilon, Schering-Plough’s human vaccine business unit, and the World Health Organization to provide access to pandemic influenza vaccine manufacturing technology to developing countries. Nobilon has granted WHO a non-exclusive license to develop, register, manufacture, use and sell seasonal and pandemic live, attenuated, influenza vaccines (LAIV), produced in embryonated chicken eggs. WHO will be permitted to grant a sub-license to vaccine manufacturers in developing countries working within the framework of the WHO Global Vaccine Action Plan. Vaccine manufacturers to whom a sub-license will be granted will be able to provide vaccines to the public sector of developing countries royalty-free.
- Bayer Healthcare is co-marketing Schering-Plough’s cholesterol-absorption inhibitor, Zetia which was approved in Japan in April 2007 as a monotherapy and co-administered with a statin for use in patients with hypercholesterolemia,
familial hypercholesterolemia or homozygous sitosterolemia.
- Schering-Plough has a licensing agreement with Centocor Inc., a Johnson & Johnson company, for Remicade, a treatment of inflammatory diseases such as rheumatoid arthritis, early rheumatoid arthritis, psoriatic arthritis, Crohn’s disease, ankylosing spondylitis, plaque psoriasis and ulcerative colitis. In 2005 Schering-Plough exercised an option under its contract with Centocor for license rights to develop and commercialize golimumab, a fully human monoclonal antibody which has been filed for approval in Europe. Schering-Plough has exclusive marketing rights to both products outside the U.S., Japan and certain Asian markets. In December 2007, Schering-Plough and Centocor revised their distribution agreement regarding the development, commercialisation and distribution of both Remicade and golimumab, extending Schering-Plough’s rights to exclusively market Remicade to match the duration of Schering-Plough’s exclusive marketing rights for golimumab. Schering-Plough may independently develop and market golimumab for a Crohn’s disease indication in its territories, with an option for Centocor to participate. In addition, Schering-Plough and Centocor agreed to utilize an
autoinjector device in the commercialisation of golimumab and further agreed to share its development costs.