Merck has entered into an agreement with Endocyte, a biopharmaceutical company based in West Lafayette, Ind., to develop and commercialize Endocyte's novel investigational therapeutic candidate vintafolide (EC145), which gained orphan drug status from the E.U. in March.

"Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types," said Peter S. Kim, executive vice president and president Merck Research Laboratories.

Merck, through a subsidiary, will gain worldwide rights to develop and commercialize vintafolide. Endocyte will receive a $120 million upfront payment and is eligible for milestone payments of up to $880 million based on the successful achievement of development, regulatory and commercialization goals for vintafolide for a total of six cancer indications. If vintafolide receives regulatory approval, Endocyte will receive an equal share of the profit in the U.S., as well as a double digit percentage royalty on sales of the product in the rest of the world. Endocyte has retained the right to co-promote vintafolide with Merck in the U.S. and Merck has the exclusive right to promote vintafolide in the rest of world.

Vintafolide is currently being evaluated in a phase III clinical trial for platinum-resistant ovarian cancer, (PROCEED trial) and a phase II trial for non-small cell lung cancer; both studies are also using Endocyte's investigational companion diagnostic agent, etarfolatide (EC20).

Endocyte will be responsible for the majority of funding and completion of the PROCEED trial. Merck will be responsible for all other development activities and costs and have all decision rights for vintafolide. Endocyte remains responsible for the development, manufacture and commercialization worldwide of etarfolatide, a non-invasive companion diagnostic imaging agent that is used to identify folate receptor positive tumor cells.

Endocyte has already completed three single arm studies of vintafolide in patients with advanced platinum resistant ovarian cancer, non-small cell lung cancer and solid tumors. In a randomized phase II clinical trial (PRECEDENT) comparing vintafolide plus pegylated liposomal doxorubicin (PLD) versus PLD alone in women with platinum-resistant ovarian cancer, vintafolide demonstrated a statistically significant delay in disease progression or death in the overall population, with the largest improvement observed in patients with all tumors imaged as positive for folate receptor expression utilizing etarfolatide. Vintafolide in combination showed limited additional toxicity versus standard therapy with PLD alone.

In March 2012, the E.U. granted orphan drug status to vintafolide, and Endocyte announced plans to file a marketing authorization application in the third quarter of 2012.

Closing of the transaction is contingent upon obtaining Hart-Scott Rodino clearance from the Federal Trade Commission.