Pfizer, Germany's Merck to Develop Tumor Treatment

By Natalia Drozdiak 

FRANKFURT-- Pfizer Inc. and Germany's Merck KGaA are teaming up to develop a new tumor treatment product, in a move that will boost the U.S. company's oncology business but reduce its full-year earnings per share.

Merck will receive $850 million upfront to jointly develop and commercialize an anti-PD-L1 antibody with Pfizer and could receive a further $2 billion in regulatory and commercial milestone payments. Merck is already developing the drug as a treatment against various types of tumors.

The two companies will also push to advance Pfizer's anti-PD-1 antibody into phase 1 trials.

As a result of the transaction, Pfizer is downgrading its previous 2014 reported diluted earnings per share guidance to between $1.40 and $1.49, from between $1.50 and $1.59.

Both companies will jointly fund development and commercialization costs and will share all revenues from selling any anti-PD-L1 or anti-PD-1 products, Merck added. The move will help bolster both the companies' presence in the immune-oncology industry, it said.

Merck said about 20 immuno-oncology clinical development programs are set to begin next year.

Write to Natalia Drozdiak at [e-mail]

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