Monday, May 9, 2011

Merrimack Pharma pays $220M for Taiwanese drug firm

By Julie M. Donnelly, Boston Business Journal

Merrimack Pharmaceuticals Inc., a privately-held biotechnology company, will pay Taiwanese drug maker PharmaEngine up to $220 million in up-front and milestone payments in return for the Asian and European rights to develop, manufacture and commercialize a potential treatment for pancreatic and gastric cancers. The deal excludes Taiwan.

The Cambridge-based company will pay $10 million upfront, and potential milestone payments of up to $210 million, along with tiered royalty fees, if the drug candidate is eventually approved. Merrimack will take on all product development costs in the licensed territories.

“Drug development is like a relay race; PharmaEngine has developed this drug candidate from preclinical to Phase 2 stages, and we believe that Merrimack is well-positioned to take the baton and accelerate development of this product through global commercialization,” PharmaEngine CEO Grace Yeh said in a statement.

The drug candidate, called MM-398 by Merrimack, has been tested in four Phase 1 studies and two Phase 2 studies in gastric and pancreatic cancers. The companies said that both Phase 2 studies showed promising results.

Merrimack said it now has five potential cancer treatments that are either in clinical development or expected to enter clinical development this year.

Last month, Merrimack raised $77 million in a seventh round of venture funding.