Merck Makes $290M Bet On Prostate Cancer Candidate

Merck & Co Inc MRK and Orion Corporation announced a global development and commercialization agreement for Orion's ODM-208 and other drugs targeting cytochrome P450 11A1 (CYP11A1), an enzyme essential in steroid production.
ODM-208 is an oral, non-steroidal inhibitor of CYP11A1 currently in a Phase 2 trial for metastatic castration-resistant prostate cancer.
Under the terms of the agreement, Orion and Merck will co-develop and co-commercialize ODM-208.
Merck will make an upfront payment to Orion of $290 million.
Of this upfront payment, Orion recognizes approximately €220 million as income at the time of signing. Approximately €60 million is reserved to cover Orion's share of the ODM-208 development cost.
Orion will be responsible for manufacturing the clinical and commercial supply of ODM-208.
In addition, the contract provides both parties with an option to convert the initial co-development and co-commercialization agreement into a global exclusive license to Merck.
If the option is exercised, Merck would assume full responsibility for all accrued and future development and commercialization expenses associated with the program. Orion would be eligible to receive milestone payments.
Price Action: MRK shares are down 0.59% at $93.08 during the market session on the last check Wednesday.