Merck strategically shedding compounds

Thursday, July 7, 2011 10:05 AM

Almost as soon as the Merck and Schering-Plough pipelines were combined in late 2009, Merck had to go through all of its compounds and decide which to shed, according to Chemical & Engineering News.

Though Merck has not specified a number for how many programs it is cutting overall, the pipeline reorganization is said to be substantial. In an interview with Meeta Chatterjee, Merck & Co.’s head of global outlicensing and asset management, she told the publication the first step in the process was charging every therapeutic franchise head with prioritizing their portfolios. While some companies, such as GlaxoSmithKline and Pfizer, have cut entire therapeutic areas, Merck chose to weed out programs from across its entire organization, she said.

The end result was a long list of molecules across all phases of development, and even some at the lead optimization stage, suddenly up for grabs. The list included some that, due to clauses in partnering agreements, had to be returned to a biotech company, others that would be sold outright, and some assets Merck hoped to keep ties to through a partnership that would include an option to buy back the program down the road after some of the development risk had been removed. Lastly, a handful of compounds were simply shelved because they showed signs of toxicity in early studies.

“Merck did some out-licensing in the past, but there was never a dedicated group, and the number of out-licensing deals were nowhere near what we were being asked to do,” Chatterjee said.

And given the sensitive nature of pharma research, finding partners is not so simple. “It’s almost reverse competitive intelligence,” she said.

Once Merck said it was reevaluating its pipeline, a slew of companies and venture capital firms came forward to express interest in assets, said Chatterjee. After the team put together full data packages on every program on the chopping block, they filtered through the requests and tried to find the right matches. In fewer cases, her team has sought to identify a partner that might be interested in a program.

Since completing the data packages on the compounds in December, Chatterjee’s group has done a few small deals, and hopes to complete a few more this year.

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