Merck has signed an exclusive worldwide research collaboration and licence agreement with two Otsuka Pharmaceutical subsidiaries, Japanese Taiho Pharmaceutical and UK-based Astex Pharmaceuticals.

The collaboration centres around developing small molecule inhibitors against multiple cancer drug targets, including the KRAS oncogene, which is one of the most mutated genes in human cancers, but has proven difficult as a target.

The three companies will combine their current small molecule pre-clinical oncology candidates, as well as their data knowledge and expertise from their individual research programmes.

Merck will fund all research and development (R&D), have exclusive global license to candidates and will be responsible for global commercialisation of any approved products globally, although Taiho will have co-commercialisation rights in Japan and the option to promote the products in certain areas of South East Asia.

In return, Taiho and Astex will receive a total upfront payment of $50m from Merck, and will be eligible for approximately $2.5bn in various milestone payments and tiered royalties on sales.

Taiho managing director Teruhiro Utsugi said: “Taiho has used its unique and proprietary drug discovery platform to generate a number of small molecule inhibitors.

“This alliance builds on our KRAS research up to now, and together with MSD it allows us to combine expertise to significantly accelerate the global research, development and commercialization of a number of our mutant KRAS programs by accessing external talent and resources.”

Astex CEO and president Harren Jhoti commented: “Together with our Taiho colleagues we are delighted to be working with Merck, one of the global leaders in oncology drug development, on this strategic alliance. This collaboration is another testament to Astex’s position as the leader in fragment-based drug discovery.”

Merck president Dr Roger M. Perlmutter added: “This agreement with Taiho and Astex combines our respective small molecule assets and industry-leading expertise in cancer cell signaling to enable development of the most promising drug candidates.”