Deals, R&D

Merck KGaA looks to boost drug R&D alliances as the CFO crunches the numbers on development costs

Most everybody at the high end of the drug R&D business has more trial work on the table than they can afford to complete alone. And that’s where the right development partner can make a big difference.

For Merck KGaA, Pfizer has been shouldering much of the load to advance their PD-L1 checkpoint Bavencio, now in multiple studies for various cancers as it continues to chase a crowded field of players. And the same approach could work elsewhere.

In a conversation with CFO Journal today, the German Merck’s CFO, Marcus Kuhnert, outlined the company’s need to economize on healthcare research costs — which tallied about $2 billion last year. That’s the lion’s share of the R&D budget at Merck KGaA — which has a heavy debt burden — funneled into a group that the Journal reports is 6,800 staffers strong.

We don’t have enough funds to develop all of our assets at the same time, and that means that partnering considerations come more and more into focus,” Kuhnert said in the interview.

Merck KGaA’s 2014 deal with Pfizer came with a classic pile of Big Pharma cash, with $850 million upfront and another $2 billion in milestones wrapped into the package.

Merck KGaA is posting some of their mid-stage data from a trial of their BTK inhibitor evobrutinib for multiple sclerosis. But despite a bold boast that the drug represents just how innovative their in-house R&D group is, the data are distinctly mixed. The company struck a development deal of its own with F-star last year, which includes a new drug called FS118, a LAG-3, PD-L1 bispecific now in its first human study.


Image: Marcus Kuhnert. MERCK KGAA


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