Merck has entered into a significant partnership with Daiichi Sankyo, agreeing to pay $5.5 billion for joint development of three of Daiichi Sankyo's experimental cancer drugs, primarily focusing on antibody-drug conjugates targeting solid tumors with potential for multi-billion dollar revenue.
Merck will make an upfront payment of $4 billion and an additional $1.5 billion over two years, with possible milestone payments reaching up to $16.5 billion.
The collaboration aims to co-develop and globally market the drugs, except in Japan where Daiichi Sankyo will retain rights and handle manufacturing.
This strategic alliance is expected to enhance Daiichi Sankyo's oncology portfolio and contribute to its goal of growing cancer drug revenue fivefold by 2026, with Merck forecasting a 25-cent reduction in earnings per share for the first year.
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