Merck has entered into an agreement with Endocyte to develop and commercialise the latter’s investigational cancer drug vintafolide, which could be worth up to $1bn.

Vintafolide is currently being evaluated in a Phase III clinical trial for the treatment of platinum-resistant ovarian cancer and a Phase II trial for non-small cell lung cancer alongside Endocyte’s investigational diagnostic agent etarfolatide.

As per the agreement, Merck will pay Endocyte an upfront payment of $120m in order to gain worldwide rights to develop and commercialise vintafolide, and Endocyte will be eligible for milestone payments of up to $880m depending upon the success of the drug in meeting regulatory and commercialisation goals in a total of six cancer indications.

Endocyte will also be eligible to receive an equal share of the profit in the US, should the drug receive regulatory approval.

Endocyte has retained the right to co-promote vintafolide with Merck in the US, and Merck will retain exclusive rights to promote the drug in the rest of the world.

Merck Research Laboratories executive vice president and president Peter Kim claimed vintafolide to be a promising and innovative late-stage cancer drug candidate, whilst citing Merck’s plans to further evaluate its potential for treating other cancer types.

"This agreement underscores our strategy of building a portfolio of oncology therapeutics that employ a companion diagnostic to facilitate selection of those patients most likely to respond to treatment," added Kim.