Merck Acquires OncoEthix for Up to $375 Million

By Angela Chen 

Merck & Co. acquired privately held OncoEthix for up to $375 million, its latest push into the oncology market as the pharmaceutical giant continues bolstering its research-and-development pipeline.

OncoEthix is a Swiss-based biotechnology company specializing in oncology, or the study of cancer, one of the areas that Merck has been eyeing for R&D growth.

The deal includes an upfront payment of $110 million, and OncoEthix is eligible for additional milestone payments of up to $265 million, contingent upon clinical and regulatory approval.

Through the acquisition, Merck gains OTX015, a BET (bromodomain) inhibitor that is currently in Phase 1b studies for the treatment of advanced solid tumors.

"Oncology is a priority area of focus for Merck and the acquisition of OncoEthix supports our strategy to prioritize the development of innovative molecules with the potential to improve the treatment of advanced cancers," said Roy Baynes, senior vice president of global clinical development for Merck.

Merck announced in 2013 a strategy to narrow its focus to areas including acute hospital care, vaccines and oncology.

Its leaders have made clear they aren't interested in pursuing large-scale acquisitions, but rather more modest-size, "bolt-on" deals that bolster the company's research-and-development pipeline and its product lineup.

Merck has an aging drug portfolio and its top-selling product, diabetes treatment Januvia, isn't growing like it used to. The company recently got a cancer immunotherapy called Keytruda approved. Earlier this month, Merck purchased Cubist Pharmaceuticals, which specializes in fighting infectious diseases, for $8.4 billion.

Shares of Merck, inactive premarket, are up about 15% this year through Wednesday's close.

Write to Angela Chen at [e-mail]

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