Pfizer buys rights to Merck’s cancer drug

<p>The US drugmaker unveiled the deal on Monday, dampening hope for new AstraZeneca takeover bid.</p>

Pfizer is to pay $850 million (£542.7 million) for rights to a cancer drug being developed by Merck, known as MSB0010718C. As part of the agreement, it is also required to pay up to $2 billion based on the medicine's future success, Merck said in a statement.

Merck's MSB0010718C is part of a class of drugs known as anti-PD-L1 therapies, which work by blocking a tumour's ability to evade the immune system's defences. The US company rose 2.3 percent to €76.01 (£60.7) yesterday (November 17th)  after the announcement in morning trade in Frankfurt.

Pfizer and Merck will jointly fund research and commercialisation costs for the cancer drug and will share revenue. Analysts predict AstraZeneca’s PD-L1 drug will have sales of $1.6 billion by 2020.

“Immuno-oncology is a top priority for Pfizer,” Albert Bourla, Pfizer’s group president for vaccines, oncology and consumer healthcare, told Bloomberg. “This alliance enables us to significantly accelerate the timeframe of our development programs and move into the first wave of potential immuno-oncology based treatment regimens.”

The deal dampened investors' expectations of a renewed bid for AstraZeneca, reducing the US firm's need for Astra's products. The company had a failed attempt to buy rival British drugmaker AstraZeneca, and officially gave up on this project after its final $118 billion bid was rejected on May 26th.

It posted at the end of October better-than-expected results in the third quarter of the year, helped by growing sales of its cancer drugs and demand from emerging markets. The US drugmaker said it had earned $2.67 billion (£1.65 billion), or 42 cents per share, in the third quarter. The figure last year was $2.59 billion. 

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