On July 1, Orion and Merck & Co., Inc. announced the joint exercise of an option to convert the ongoing co-development and co-commercialization agreement for the investigational CYP11A1 inhibitor opevesostat (MK-5684/ODM-208) and other CYP11A1-targeted drug candidates into an agreement solely with Merck & Co., Inc.GlobalExclusive license.OrionPresident and CEO Liisa Hurme said:"Convert this collaboration into a licensing agreement, enablingOrionWe are able to concentrate resources on advancing our other promising candidate development programs while maintaining a strong position to benefit from the development and potential commercialization of opevesostat, as well as achieve our financial goals. We believe that MSD is committed to maximizingopevesostat"A compound discovered by Orion's scientists offers the best option for treating certain types of prostate cancer in patients."Dr. Dean Y.Li, President of Merck Sharp & Dohme AG Research Laboratories, stated:"We are pleased with the progress made so far in our collaboration with Orion, including the initiation of two pivotal Phase 3 trials evaluatingOpevesostat TreatmentCertain patients with metastatic castration-resistant prostate cancer. We will continue to advance the clinical development program of opevesostat rapidly and rigorously to help meet...Prostate"The needs of cancer patients."As previously mentioned, according to the original co-development and co-commercialization agreement of the company, each party has the right to convert the co-exclusive license into an exclusive global license for Merck & Co., Inc. By exercising this option, Merck & Co., Inc. will obtain global exclusive rights to develop and commercialize opevesostat and other candidate drugs targeting CYP11A1 covered by this agreement.According to the terms of the agreement, Orion is now eligible to receive up to $30 million in development milestone payments, up to $625 million in regulatory milestone payments, and up to $975 million in sales-based milestone payments, as well as annual royalties on net sales of any commercialized licensed products. The development and regulatory milestones are determined by the scope of multiple therapeutic indications and across various regions. Annual sales exceeding several billion dollars will be required to reach the total sales milestones and higher royalty rates. Additionally, following the exercise of this option, MSD will now assume full responsibility for all past and future development and commercialization costs associated with the candidate pipeline covered under the agreement. Due to the option exercise and MSD's assumption of costs, Orion announced that it would set aside €60 million in July 2022 to cover its share of the accrued development costs from the balance sheet by the third quarter of 2024, in order to achieve net sales and operating profit. Orion will continue to be responsible for the production of clinical and commercial supply for MSD. The exercise of this option does not involve any payment.
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