Baxter And Merrimack Pharma Reach Deal On Novel Cancer Compound MM-398

(RTTNews) - Baxter International Inc. (BAX) and Merrimack Pharmaceuticals Inc.(MACK) announced an exclusive license and collaboration agreement for the development and commercialization of MM-398 (nanoliposomal irinotecan injection), also known as ''nal-IRI.''

Under the agreement, Baxter gains exclusive commercialization rights for all potential indications of MM-398 outside the United States and Taiwan, and Merrimack retains commercialization rights in the United States; the rights in Taiwan are held separately.

MM-398 is an investigational drug candidate for which Merrimack is preparing a New Drug Application in the United States for the treatment of patients with metastatic pancreatic cancer previously treated with a gemcitabine-based therapy. Pancreatic cancer is a rare and deadly disease that is difficult to diagnose and has limited treatment options available today.

As per the terms of the agreement, Merrimack receives a $100 million upfront payment from Baxter, which will be recorded by Baxter as a special pre-tax in-process research and development charge in the third quarter of 2014.

Merrimack is also eligible to receive $120 million in regulatory milestone payments related to the first pancreatic cancer indication as these milestones are achieved, and $280 million in development and regulatory milestone payments for a second pancreatic cancer indication.

Merrimack is also eligible to receive $220 million in future development and regulatory milestone payments related to two additional indications. Merrimack has the potential to receive $250 million in sales milestone payments, as well as tiered royalties on net sales of MM-398 in the licensed geographies.

The U.S. Food and Drug Administration (FDA) and European Medicines Agency have granted MM-398 orphan drug designation in metastatic pancreatic cancer. Merrimack is planning to submit a New Drug Application for MM-398 with the FDA in 2014. Baxter expects to submit for regulatory approvals outside of the United States beginning in 2015.