Sichuan Kelun Pharmaceutical Co, a prominent Chinese pharmaceutical company, announced on Monday a significant setback in its collaboration with Merck & Co Inc. The multinational pharmaceutical giant has decided to discontinue the joint development of two promising candidate cancer drugs, which had not yet entered clinical trials.
Stock Impact: Kelun Sees 7% Decline
Following this development, shares of Kelun, listed on the Shenzhen stock exchange, experienced a notable decline of 7%, marking their lowest level since December 2022.
Merck’s Response Awaited
As of now, representatives from Merck have not provided an official statement in response to this decision.
Merck’s Strategic Pivot: $5.5 Billion Deal with Daiichi Sankyo
This move comes in the wake of Merck’s recent announcement of a substantial collaboration with Daiichi Sankyo. Merck has committed to paying $5.5 billion for joint development rights to three candidate cancer drugs, with the potential value of the deal reaching an impressive $22 billion for the Japanese pharmaceutical company.
Ambitious Revenue Target for Merck
Merck is ambitiously targeting a revenue of at least $6 billion from its oncology business for the fiscal year ending March 31, 2026. This represents a remarkable five-fold increase over a three-year period, underscoring the company’s commitment to its oncology portfolio.
Advancements in Cancer Treatment: Antibody Drug Conjugates (ADC)
The now-discontinued drug candidates were classified as antibody drug conjugates (ADC), a cutting-edge approach to cancer treatment. Unlike traditional chemotherapy, ADCs are engineered to specifically target cancer cells, potentially minimizing harm to healthy cells.
Continued Collaboration on Other ADC Candidates
While this setback pertains to two specific candidates, Kelun clarified that its ongoing cooperation with Merck on seven other ADC candidates remains unaffected. Among these, three are currently undergoing clinical trials, representing continued progress in the field of cancer research and treatment.
In conclusion, Merck’s decision to halt the joint development of two potential cancer drugs with Sichuan Kelun represents a notable development in the pharmaceutical industry. The strategic shift towards Daiichi Sankyo underscores Merck’s dynamic approach to its oncology portfolio. This decision, though a setback, highlights the evolving landscape of cancer treatment research and development.
