Merck KGaA seeking investors to help fund clinical trials: report
Merck KGaA revealed that it is in talks with external investors to jointly fund some of its clinical trials, The Financial Times reported Sunday. Stefan Oschmann, head of Merck’s pharmaceutical and consumer health divisions, noted that finding an outside investor to pay half the cost of a clinical trial would be desirable.
Oschmann described co-funding projects with potential partners, including private equity groups, as a «good business model," as the cost of a late-stage trial can run between 150 million euros ($203 million) and 400 million euros ($542 million) for most drugs and as much as 600 million euros ($813 million) for an experimental multiple sclerosis drug. Further, the drugmaker is exploring «risk-sharing» deals in which the company would receive payments based on the success of some of its experimental products, Oschmann added.
Oschmann is attempting to restructure Merck’s drugs arm ahead of potential cost-cutting measures and acquisitions. Merck previously negotiated a five-year agreement with Quintiles that includes performance-related «milestones» linked to the contract research organisation’s ability to rapidly and reliably conduct clinical trials for the German drugmaker. Additionally, the company’s Serono division signed a deal with Nordic Bioscience regarding a clinical trial for an experimental osteoarthritis therapy. Under the agreement, Nordic received a discounted up-front payment that will include a royalty if the therapy reaches the market.
Drugmakers such as Eli Lilly have explored similar cost-sharing initiatives, while other companies have collaborated to co-develop and co-commercialise therapies. In particular, AstraZeneca and Merck & Co. co-developed a diabetes therapy, while GlaxoSmithKline and Pfizer jointly created ViiV Healthcare, a business venture focused on HIV treatments.