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Merck Views Rx/Dx Partnerships as 'Method for Success' in Recession, Company Official Says

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By Turna Ray

WASHINGTON, DC — As large pharmaceutical companies are looking to pare down spending, drug/diagnostic collaborations may be a viable strategy for advancing new products through the pipeline, according to an official from Merck.

In recent years, "I have been involved in product licensing, but I have also increasingly become involved in Rx/Dx partnerships," Cynthia Gawron-Burke, director of external scientific affairs at Merck, said at a conference here on next-generation diagnostics hosted by Cambridge Healthtech Institute.

Collaborations between drug and diagnostics companies are "a method for success during an economic crisis," Gawron-Burke added.

Merck, which spent $4.8 billion in R&D last year, has thus far publicly announced two Rx/Dx partnerships.

In October last year Merck signed a two-year exclusive licensing agreement with Celera that gave the drug manufacturer access to up to 10 cancer targets for the development of RNAi-based therapeutics. Under the terms of the deal, Celera can develop companion diagnostics for any therapeutics that Merck develops out of the licensed targets.

In 2007, Merck inked a research collaboration agreement with Asuragen to develop a gene-expression-based companion diagnostic for use in Merck's clinical trials for an investigational cancer treatment.

Nevertheless, when it comes to developing Rx/Dx combination products, it's still "early days" at Merck. "We're certainly not an Amgen or a Genentech," Gawron-Burke said.

Amgen in 2008 signed a deal with UK-based pharmagogenomics firm DxS to develop a companion diagnostic for its colorectal cancer drug Vectibix. DxS has a global distribution deal for the KRAS test with Roche.

This week, Roche subsidiary Genentech and Dako announced they will collaborate on submitting for FDA approval two companion diagnostics — Dako's HercepTest and HER2 FISH pharmDx test — for Herceptin in the treatment of advanced HER2-positive stomach cancer (see story, this issue). The two firms already have an agreement to market a HER2 companion diagnostic for Herceptin in breast cancer.

At the meeting, Gawron-Burke offered a snapshot of what a large pharmaceutical company such as Merck is looking for in a diagnostic partner. Sharing common goals and overcoming "the trust hurdle" are key ingredients for a successful drug/diagnostic partnership, she noted.

In general, Merck is looking for a diagnostic partner that has a test that is "fit-for-purpose" and is either commercially available or in late-stage development; has IP rights to the diagnostic that will allow for it to enter into the collaboration; and has a regulatory track record. In turn, the drug company should be open with the diagnostic partner about its drug development plans and provide preclinical data for its therapeutics, Gawron-Burke noted.

In addition, the diagnostics partner must be willing to engage with Merck in the early stages of drug development, she said.

Industry observers have noted that drug firms and diagnostics companies are increasingly engaging in companion diagnostics discussions earlier in drug development in order to simultaneously take the test and therapeutic through the FDA and lessen regulatory difficulties down the road [see PGx Reporter 07-22-2009].

Usually, Merck carves out a fee-for-service arrangement with its diagnostics partners.

In its deal with Celera, Merck agreed to pay Celera a license fee for the exclusive access to the ten RNAi cancer targets, in addition to payments for target development, commercialization, and royalties.

Similarly, Merck paid Asuragen an undisclosed sum for the development of the companion diagnostic test for use in its cancer drug trial. Under the agreement, Asuragen is entitled to additional payments from work once the assay has been validated and transferred to clinical reference laboratories.

Although Gawron-Burke did not discuss any Rx/Dx partnerships other than those with Celera and Asuragen, she did hint that other such deals may be in the works and announced later this year.

The targets of interest at Merck include IGF1R, mTOR, AKT, cMET, Wee1, PARP, Aurora-A, and HDAC.

In June, Merck and AstraZeneca announced they were working on developing an anticancer regimen comprising two investigational drugs: Merck's MK-2206 impacting AKT signaling and AstraZeneca's AZD6244, which has shown to affect the MEK (mitogen-activated protein kinase 1) pathway. According to the two companies, molecular profiling has shown that the MEK and AKT pathways are abnormally activated in many solid tumors and preclinical data suggests that simultaneously inhibiting both these pathways may impact tumor cell growth.

When asked at the meeting why Merck wouldn't acquire a diagnostics firm or internally develop a diagnostics product to reduce risk and exact more control over test development, Gawron-Burke responded that diagnostic development is currently not a strategic focus at the company.

"We may acquire a [diagnostics] company in the future, but that's not our business focus right now," she said, adding "we're used to assuming risk. Drug development is a risk business."

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