Merck, known as MSD outside the United States and Canada, has announced an exclusive worldwide research collaboration and license agreement with Taiho Pharmaceutical Co, Ltd., and Astex Pharmaceuticals (UK), a wholly owned subsidiary of Otsuka Pharmaceutical Co., Ltd., focused on the development of small molecule inhibitors against several drug targets, including the KRAS oncogene, which are currently being investigated for the treatment of cancer.

Under the terms of the agreement, Merck, Taiho and Astex will combine preclinical candidates and their data with knowledge and expertise from their respective research programs.

In exchange for providing Merck an exclusive global license to their small molecule inhibitor candidates, Taiho and Astex will receive an aggregate upfront payment of $50 million and will be eligible to receive approximately $2.5 billion contingent upon the achievement of preclinical, clinical, regulatory and sales milestones for multiple products arising from the agreement, as well as tiered royalties on sales.

Merck will fund research and development and will be responsible for commercialization of products globally. Taiho has retained co-commercialization rights in Japan and an option to promote in specific areas of South East Asia.

KRAS is among the most frequently mutated oncogenes in cancer. It is estimated to occur in more than 90% of pancreatic cancers and approximately 20% of non-small cell lung cancers (NSCLC) and is associated with poorer outcomes.