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Merck & Co., Eisai partner to develop combo therapies for multiple cancer types

Merck & Co. Inc. and Eisai Co. Ltd. agreed to jointly develop and commercialize Eisai's cancer drug Lenvima both as a single treatment and in combination with Merck's Keytruda.

Under the agreement, Merck will pay Eisai $300 million upfront and up to $650 million for certain option rights through 2020. The company will also pay $450 million as reimbursement for research and development expenses.

In addition, Eisai will receive up to $385 million on achieving certain clinical and regulatory milestones and a maximum of up to $3.97 billion for the achievement of milestones associated with sales of the drug.

The total value of the deal has the potential to reach up to $5.76 billion, assuming the achievement of all development and commercial goals for all treatment uses.

Eisai will book product sales globally, while the companies will share development and marketing costs equally, as well as gross profits from Lenvima.

Lenvima, or lenvatinib, is currently approved as monotherapy to treat thyroid cancer, as well as in combination with Novartis AG's Afinitor, or everolimus, to treat patients with renal cell carcinoma — a type of kidney cancer — who have failed previous therapy.

Eisai is also seeking regulatory approval of Lenvima monotherapy for a type of liver cancer in Japan, the U.S., Europe, China and other countries.

A phase 3 study, sponsored by Eisai, is ongoing to evaluate separate combinations of Lenvima with Keytruda or Lenvima with Afinitor versus chemotherapy alone to treat renal cell carcinoma.

In January, a combination of Lenvima with Keytruda received the U.S. Food and Drug Administration's breakthrough therapy designation to treat advanced or metastatic renal cell carcinoma.

Eisai said the companies will also jointly start new clinical studies evaluating the Lenvima/Keytruda combination to support 11 potential treatment uses in six types of cancer, as well as a basket trial targeting multiple cancer types.