Pfizer and Germany's Merck Strike Deal to Develop Cancer Drug


Pfizer Inc. and Germany’s Merck KGaA (which is not affiliated with Merck & Co. U.S.) are joining forces to create a tumor treatment drug that will boost Merck’s oncology business but reduce its full- year earnings per share.

Merck will receive $850 million to develop an anti-PD-L1 antibody with Pfizer and could potentially get another $2 billon in regulatory and commercial payments. The deal will help Merck’s entrance into the U.S. oncology market.

The two companies plan to advance Pfizer’s anti-PD-1 tumor- fighting agent into phase 1 trials and promote Pfizer’s lung cancer drug XALKORI. Due to the transaction, Pfizer plans on reducing its diluted earning per share by almost 7%, and the two companies will split all costs and revenues.

Merck plans to open 20 immuno-oncology clinical developmental programs next year. Moreover, it has been expanding its non-pharmaceutical division by acquiring AZ Electronics PLC (a specialty chemicals company) and Sigma-Aldrich Corp (a supplier of lab testing materials).

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