Basilea Pharmaceutica will hand back a license for cancer drug derazantinib to Merck & Co. after determining it couldn’t hit the required terms and timelines of the agreement.
The Swiss biotech entered an exclusive licensing agreement with ArQule—later acquired by Merck in 2019 for $2.7 billion—for the FGFR inhibitor derazantinib in 2018. Under the agreement, Basilea paid ArQule $10 million upfront plus up to $326 million in regulatory and commercial milestones.
As part of the licensing agreement, Basilea was assessing the drug for intrahepatic cholangiocarcinoma, a type of biliary tract cancer, along with other tumor types with FGFR dysregulation.
But now, the med is headed back to Merck by the end of the year. A competitive industry landscape and evolving clinical data from open-label studies of derazantinib played into Basilea’s inability to meet all of the agreement terms, Adesh Kaul, chief financial officer for Basilea, said in a June 27 release.
The terminated licensing agreement is part of an overall restructuring happening at Basilea that also includes the decision not to expand studies for lisavanbulin, a tumor checkpoint controller. The biotech is now actively seeking partnering opportunities for the drug.
“We concluded that entering into separate transactions for our oncology assets would generate most long-term value,” Kaul said. Partnership discussions for Basilea’s preclinical oncology assets are expected to close during the second half of this year.
The company’s restructuring zooms in on anti-infectives, such as antibiotic ceftobiprole, which is currently in a phase 3 study for Staphylococcus aureus bacteremia. Basilea anticipates results from the trial shortly, according to CEO David Veitch. The company has also initiated preclinical profiling of a recently in-licensed antifungal.
The anticipated partnerships and portfolio decisions will help ensure Basilea has sustainable operating cash flow and profits “as of” 2023, Kaul said.