Date: 2016-07-26
Type of information: Termination of the agreement
Compound: Grazax®/Grastek®, Ragwitek® and investigational house dust mite sublingual allergy immunotherapy tablets (SLIT-tablets)
Company: ALK Abello (Denmark) Merck&Co (USA - NJ)
Therapeutic area: Allergic diseases - Inflammatory diseases - Respiratory diseases
Type agreement: termination of an agreement
Action mechanism: immmunotherapy product. sublingual allergy immunotherapy tablet
Disease: grass pollen allergy, house dust mite allergy, ragweed allergy
Details:
- • On January 3, 2007, ALK-Abelló and Schering-Plough announced that they have signed an agreement on a strategic alliance to develop and commercialize ALK-Abelló’s tablet-based immunotherapies against grass pollen allergy (Grazax®), house dust mite allergy and ragweed allergy for the North American market and Mexico. The agreement gives Schering-Plough exclusive license rights to develop, market and distribute the tablet-based immunotherapies against grass pollen allergy Grazax®, house dust mite allergy and ragweed allergy. Schering-Plough will be responsible for all costs of clinical development, registration, marketing and sales of the products on the North American market. ALK-Abelló will be responsible for tablet production and supply.
Financial terms:
- Under the agreement, ALK-Abelló will receive an up-front payment of $ 35 million (approximately DKK 200 million) from Schering-Plough. In addition, ALK-Abelló may receive up to a total of $ 255 million (approximately DKK 1,430 million) of milestone payments. Out of this amount, $ 65 million (approximately DKK 370 million) relates to
the clinical development and regulatory events for the three tablet-based immunotherapies and the rest to the achievement of specific milestones related to realized sales of the tablets. In addition, ALK-Abelló will be entitled to royalty payments on net sales of the products on the North American market.
Latest news:
- • On July 26, 2016, ALK announced that Merck&co has informed the company of its plans to end their partnership agreement. This decision followed a recent review of Merck&co's strategic priorities. As a result, all rights to ALK’s sublingual allergy immunotherapy tablets (SLIT-tablets) against grass, ragweed and house dust mite (HDM) allergies for North America will revert to ALK at no fee to ALK. Steen Riisgaard, Chairman of ALK’s Board of Directors and acting Chief Executive, said: “The timing of this move is unexpected. However, we understand that MSD’s decision was based on a prioritisation of resources. Our belief that North America represents an important opportunity for ALK’s SLIT-tablets is unchanged. The sales performance over the past two years has been below expectations. Our view is that success there is likely to follow the path seen in Europe, where slow early adoption has now given way to sustained growth.”
Sales of SLIT-tablets in Europe – from Grazax® sales and the launch of Acarizax® in its first markets – grew by 97% to DKK 257 million in the first half of 2016. In the same period, ALK’s income from SLIT-tablets in North America amounted to DKK 49 million. Of this, DKK 34 million was a one-off milestone payment, while the remainder came from sales royalties, R&D services and product supply. ALK will now consider which new strategy for North America will best deliver long-term results. Following a transition period that is expected to take six months, the rights for all three products in North America will revert to ALK by early 2017. In addition, as per the terms of the parties’ agreement, Merck&co will complete the clinical study that is ongoing at their costs. The ongoing registration processes for the investigational HDM SLIT-tablet will continue, with increased involvement from ALK.
ALK remains fully committed to the North American markets and will mobilise resources from its North American operations and headquarters in Denmark to ensure a smooth transition in close collaboration with Merck&co. At the same time, ALK will undertake a full strategic review of the North American markets to determine the best options for the future commercialisation of the SLIT-tablets. Options include alternative partnerships and commercialisation by ALK’s North American subsidiary.
The agreement between ALK and Merck&co, which covers the USA, Canada and Mexico, was first signed in 2007 with Schering-Plough. This agreement has seen the successful registration of Grastek® and Ragwitek® for grass and ragweed allergic rhinitis, respectively, as well as the submission of a U.S. FDA Biologics License Application for the HDM SLIT-tablet, known as Acarizax® in Europe.
Is general: Yes
