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July 27, 2017 1:12 am ET

Collaboration Aims to Maximize the Potential of PARP and MEK Inhibitors in Combination with PD-L1/PD-1 Medicines, Based on Growing Scientific Evidence That These Combinations Offer New Potential for the Treatment of a Range of Tumor Types

AstraZeneca and Merck Will Independently Develop and Commercialize LYNPARZA and Potential Medicine Selumetinib in Combinations with Companies’ Respective PD-L1/PD-1 Immuno-Oncology Medicines IMFINZI and KEYTRUDA

Collaboration Will Significantly Expand the Potential of LYNPARZA, the World’s First and Leading PARP Inhibitor, as a Monotherapy and as a Backbone of Combination Treatments for Multiple Cancer Types; Agreement Also Includes AstraZeneca’s Selumetinib, a MEK inhibitor

The Companies Will Share Development and Marketing Costs Equally, as well as Gross Profits from LYNPARZA and Selumetinib

KENILWORTH, N.J.–(BUSINESS WIRE)–AstraZeneca and Merck & Co., Inc., (NYSE: MRK), known as MSD outside of
the United States and Canada, today announced that they have entered a
global strategic oncology collaboration to co-develop and
co-commercialize AstraZeneca’s LYNPARZA (olaparib) for multiple cancer
types. LYNPARZA is an innovative, first-in-class oral poly ADP ribose
polymerase (PARP) inhibitor currently approved for BRCA-mutated ovarian
cancer in multiple lines of treatment.

LYNPARZA’s pipeline has grown significantly in the last few years, with
14 indications currently being developed across several tumor types,
including breast, prostate and pancreatic cancers. The strategic
collaboration is expected to further increase the number of treatment
options available to patients.

The companies will develop and commercialize LYNPARZA jointly, both as
monotherapy and in combination trials with other potential medicines.
Independently, the companies will develop and commercialize LYNPARZA in
combinations with their respective PD-L1 and PD-1 medicines, IMFINZI
(durvalumab) and KEYTRUDA (pembrolizumab).

The companies will also jointly develop and commercialize AstraZeneca’s
selumetinib, an oral, potent, selective inhibitor of MEK, part of the
mitogen-activated protein kinase (MAPK) pathway, currently being
developed for multiple indications including thyroid cancer.

Pascal Soriot, chief executive officer of AstraZeneca, said: “Our
strategic collaboration builds on scientific evidence that PARP and MEK
inhibitors can be combined with PD-L1/PD-1 inhibitors for a range of
tumors. By bringing together the expertise of two leading oncology
innovators, we will accelerate LYNPARZA’s potential to become the
preferred backbone of many immuno-oncology combination therapies as the
world’s first and leading PARP inhibitor. This is a truly exciting step
and we are pleased to work with Merck, a company that shares our passion
for science to deliver new medicines for cancer patients.”

Kenneth C. Frazier, chief executive officer of Merck, said: “This global
collaboration between AstraZeneca and Merck, two oncology leaders, will
increase the possibilities for patients to have more treatment options
for more cancers. Merck continues to build its leadership in
immuno-oncology with KEYTRUDA as foundational in monotherapy and
combination therapy, and this collaboration expands our oncology
leadership into the growing targeted therapies of PARP and MEK
inhibitors. We look forward to working with AstraZeneca to create
greater value for patients and shareholders than if both companies
worked independently.”

Financial considerations

Under the terms of the agreement,
AstraZeneca and Merck will share the development and commercialization
costs for LYNPARZA and selumetinib monotherapy and non-PD-L1/PD-1
combination therapy opportunities. Gross profits from LYNPARZA and
selumetinib product sales generated through monotherapies or
combination therapies will be shared equally.

Merck will fund all development and commercialization costs of KEYTRUDA
in combination with LYNPARZA or selumetinib. AstraZeneca will fund all
development and commercialization costs of IMFINZI in combination with
LYNPARZA or selumetinib.

AstraZeneca will continue to manufacture LYNPARZA and selumetinib.

As part of the agreement, Merck will pay AstraZeneca up to $8.5 billion
in total consideration, including $1.6 billion upfront, $750 million for
certain license options and up to an additional $6.15 billion contingent
upon successful achievement of future regulatory and sales milestones.

Merck expects to book its share of product sales of LYNPARZA and
selumetinib, net of commercialization costs, as Alliance Revenue and its
share of development costs associated with the collaboration as part of
its Research & Development expense.

The collaboration agreement was completed upon signing on July 26, 2017.

About LYNPARZA

LYNPARZA (olaparib) is an innovative,
first-in-class oral poly ADP-ribose polymerase (PARP) inhibitor that may
exploit tumour DDR pathway deficiencies to preferentially kill cancer
cells. LYNPARZA is the foundation of AstraZeneca’s industry-leading
portfolio of potential new medicines that target DDR mechanisms in
cancer cells. LYNPARZA is currently approved by regulatory health
authorities in the EU for use as monotherapy for the maintenance
treatment of adult patients with platinum-sensitive, relapsed
BRCA-mutated (germline and/or somatic), high-grade serous epithelial
ovarian, fallopian tube or primary peritoneal cancer, who are in
response (complete or partial) to platinum-based chemotherapy. It is
also approved in the US as a monotherapy for patients with deleterious,
or suspected deleterious, germline BRCA-mutated (as detected by a US FDA
test) advanced ovarian cancer, who have been treated with three or more
lines of chemotherapy.

The Company recently presented positive results for LYNPARZA from its
Phase III OlympiAD trial that showed a statistically-significant and
clinically-meaningful improvement in progression-free survival for
patients treated with LYNPARZA tablets (300mg twice daily), compared to
treatment with physician’s choice of a standard of care chemotherapy.
OlympiAD, a randomised, open label, multi-centre Phase III trial
assessing the efficacy and safety of LYNPARZA in patients with
HER2-negative metastatic breast cancer with germline BRCA1 or BRCA2
mutations, which are predicted or suspected to be deleterious, was the
first positive Phase III trial to evaluate the efficacy and safety of
PARP inhibitor beyond ovarian cancer. LYNPARZA is currently being
investigated in another separate non-metastatic breast cancer Phase III
trial called OLYMPIA. This trial is still open and recruiting patients
internationally.

LYNPARZA generated Product Sales in 2016 of $218 million.

About Selumetinib

Selumetinib, licensed by AstraZeneca from
Array BioPharma Inc. in 2003, inhibits the MEK enzyme in the
RAS/RAF/MEK/ERK pathway in cancer cells to prevent the tumour from
growing. Selumetinib is in Phase III development for differentiated
thyroid cancer, for which it was granted Orphan Drug Designation by the
FDA in May 2016.

Selumetinib is also being tested in a separate Phase II trial in
patients with paediatric neurofibromatosis type-1, and in a Phase I
trial with patients suffering from advanced solid tumours.

Merck’s Focus on Cancer

Our goal is to translate
breakthrough science into innovative oncology medicines to help people
with cancer worldwide. At Merck, helping people fight cancer is our
passion and supporting accessibility to our cancer medicines is our
commitment. Our focus is on pursuing research in immuno-oncology and we
are accelerating every step in the journey – from lab to clinic – to
potentially bring new hope to people with cancer.

As part of our focus on cancer, Merck is committed to exploring the
potential of immuno-oncology with one of the fastest-growing development
programs in the industry. We are currently executing an expansive
research program that includes more than 500 clinical trials evaluating
our anti-PD-1 therapy across more than 30 tumor types. We also continue
to strengthen our immuno-oncology portfolio through strategic
acquisitions and are prioritizing the development of several promising
immunotherapeutic candidates with the potential to improve the treatment
of advanced cancers.

For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

About Merck

For more than a century, Merck, a leading global
biopharmaceutical company known as MSD outside of the United States and
Canada, has been inventing for life, bringing forward medicines and
vaccines for many of the world’s most challenging diseases. Through our
prescription medicines, vaccines, biologic therapies and animal health
products, we work with customers and operate in more than 140 countries
to deliver innovative health solutions. We also demonstrate our
commitment to increasing access to health care through far-reaching
policies, programs and partnerships. Today, Merck continues to be at the
forefront of research to advance the prevention and treatment of
diseases that threaten people and communities around the world –
including cancer, cardio-metabolic diseases, emerging animal diseases,
Alzheimer’s disease and infectious diseases including HIV and Ebola. For
more information, visit www.merck.com
and connect with us on Twitter, Facebook, Instagram,
YouTube
and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This
news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”)
includes “forward-looking statements” within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform Act
of 1995. These statements are based upon the current beliefs and
expectations of the company’s management and are subject to significant
risks and uncertainties. There can be no guarantees with respect to
pipeline products that the products will receive the necessary
regulatory approvals or that they will prove to be commercially
successful. If underlying assumptions prove inaccurate or risks or
uncertainties materialize, actual results may differ materially from
those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry
conditions and competition; general economic factors, including interest
rate and currency exchange rate fluctuations; the impact of
pharmaceutical industry regulation and health care legislation in the
United States and internationally; global trends toward health care cost
containment; technological advances, new products and patents attained
by competitors; challenges inherent in new product development,
including obtaining regulatory approval; the company’s ability to
accurately predict future market conditions; manufacturing difficulties
or delays; financial instability of international economies and
sovereign risk; dependence on the effectiveness of the company’s patents
and other protections for innovative products; and the exposure to
litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise. Additional factors that could cause results
to differ materially from those described in the forward-looking
statements can be found in the company’s 2016 Annual Report on Form 10-K
and the company’s other filings with the Securities and Exchange
Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

Merck & Co., Inc.
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