(Bloomberg) -- Merck & Co. will pay $50 million, plus as much as $2.5 billion in potential future payments, in a research and development deal with Otsuka Pharmaceutical Co. that includes a much-talked-about drug targeting a dangerous subset of cancers.
Two Otsuka subsidiaries, Taiho Pharmaceutical and Astex Pharmaceuticals, will work with Merck on several drugs in their development pipelines. The $2.5 billion in future payments are dependent on hitting research and sales milestones, Merck said in a statement announcing the agreement.
The pact is focused on a cancer target called KRAS, an often-deadly mutation found in lung and pancreatic cancers. Drugmakers Amgen Inc., Eli Lilly & Co. and Mirati Therapeutics Inc. are also developing KRAS drugs.
If the drugs work, they could offer a new weapon against an otherwise difficult-to-treat subset of tumors. Merck, based in Kenilworth, New Jersey, has increasingly focused on the development of follow-ups for its blockbuster cancer treatment Keytruda, which is currently one of the best-selling drugs in the world.
Taiho will retain some rights in Japan and South East Asia.
Shares of Otsuka Holdings Co. rose as much as 1.8% in early Tokyo trading on Tuesday. Merck gained 0.4% in New York trading on Monday.
To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net
To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net
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