What's Going On With Merck Stock On Monday?

On Monday, Merck & Co Inc MRK announced the notice of the mutual exercise of an option to convert the companies’ ongoing co-development and co-commercialization agreement for opevesostat (MK-5684/ODM-208) into an exclusive global license for Merck.

As previously announced under the companies’ original co-development and co-commercialization agreement, each party was granted an option to convert the co-exclusive license into an exclusive global license for Merck.

Also Read: FDA Declines To Approve Merck-Daiichi Sankyo Partnered Lung Cancer Drug.

With the exercise of the option, Merck will gain global exclusive rights to develop and commercialize opevesostat and other candidates targeting CYP11A1 covered by the agreement.

Under the terms of the agreement, Orion is now eligible to receive development milestone payments up to $30 million, regulatory milestone payments up to $625 million, and sales-based milestone payments up to $975 million, as well as annually tiered royalty payments ranging from a low double-digit rate up to a rate in the low twenties on net sales for any commercialized licensed product.

In addition, as a result of exercising the option, Merck will now assume full responsibility for all past and future development and commercialization expenses associated with the candidates covered by the agreement.

As a result of the option exercise and Merck’s assumption of expenses, Orion announced it will release 60 million euros that was reserved in July 2022 to cover Orion’s share of development costs, which will be accrued from the balance sheet to net sales and operating profit in Q3 2024.

Orion will retain responsibility for the manufacture of clinical and commercial supply for Merck. No payment is associated with the exercise of this option.

Opevesostat is an oral, non-steroidal and selective inhibitor of CYP11A1 discovered and developed by Orion and is being investigated for the treatment of hormone-dependent cancers, such as prostate cancer. By inhibiting CYP11A1 activity, opevesostat is designed to suppress the production of all steroid hormones and their precursors that may activate the androgen receptor signaling pathway.

In 2023, Merck and Orion initiated OMAHA1 and OMAHA2a, two pivotal Phase 3 clinical trials evaluating opevesostat in combination with hormone replacement therapy for certain patients with metastatic castration-resistant prostate cancer.

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Price Action: MRK shares are up 3.44% at $128.06 at last check Monday.

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