Viagra maker Pfizer Inc. (PFE) on Monday, paraded a replacement partner in immuno-oncology in the form of Germany's Merck KGaA (MRK) after abandoning its £69.4 billion ($108.5 billion), one-sided courtship of AstraZeneca plc (AZN) in the spring.
Pfizer said it will pay $850 million for the rights to an experimental Merck treatment for cancer, dubbed MSB0010718C, that taps the body's anitbodies to help fight tumors.
Pfizer and Darmstadt, Germany-based Merck agreed to jointly finance the further development and marketing of the drug, while Merck stands to gain up to an additional $2 billion in bonus payments depending on the treatment's success. The two companies will also equally share any revenue.
"In immuno-oncology, Germans had trailed the leading companies," wrote Berenberg Bank analyst Alistair Campbell in a note. "Prizer's an impressive, financially strong partner."
Pfizer in May walked away from AstraZeneca after painting itself into a corner by describing a takeover proposal - one of a series - as "final." The transaction had also encountered political resistance in the U.S. and the U.K. Politicians in Washington criticized the approach as an attempt to avoid taxes by relocating abroad, while some U.K. lawmakers doubted that the New York company would make good on what it called "unprecendented commitments" on jobs and investment at the target.
The deal would have also given Pfizer access to AstraZeneca's own immuno-oncology treatment, which are known as anti-PD-L1 compounds. The compounds inhibit what's called the programmed death-1 checkpoint pathway. Tumors exploit this path to evade a protective response by the body's immune system that occurs when cancer cells are present.