Pfizer Inc. announced Monday a major new collaboration with German drug giant Merck KGaA to co-

develop and help commercialize a potential remedy for several types of cancer.

The deal calls for New York-based Pfizer to pay Merck $850 million up front and as much as $2 billion more if the antibody currently known as MSB0010718C proves successful.

The drug will be studied as a stand-alone therapy as well as in combination with an assortment of Pfizer and Merck drugs, both approved and still in experimental stages.

"Immuno-oncology is a top priority for Pfizer," said Albert Bourla, group president of Pfizer's Vaccines, Oncology and Consumer Healthcare Businesses. "This alliance enables us to significantly accelerate the timeframe of our development programs and move into the first wave of potential immuno-oncology based treatment regimens."

The drug already has been tested in the treatment of more than 500 patients during promising early-stage studies, according to Pfizer. Both Pfizer and Merck, which is independent of the American Merck & Co., expect to work on as many as 20 clinical trials starting next year.

"Collaborating globally with Pfizer will allow us to benefit from the strengths and capabilities of both companies in immuno-oncology, further accelerating this promising asset in the race to address the needs of cancer patients across multiple tumor types," said Belén Garijo, president and chief executive officer of Merck's biopharmaceutical division, in a statement.

Among the diseases that could see advances from the collaboration are non-small cell lung cancer, ovarian cancer and a rare skin cancer called metastatic Merkel cell carcinoma.

Pfizer said the upfront payment to Merck would affect its year-end financial results, lowering its expected profits this year by about 10 cents a share.

It said the deal also could reduce profits on its cancer drug Xalkori by somewhere between $250 million and $400 million, though an analysis of the impact has not yet been completed.

Cancer treatments that work through encouraging the immune system to fight off the disease are a hot area of research. Pfizer's cancer research is centered in LaJolla, Calif., but the company has been known to conduct some of its oncology clinical trials out of its Groton labs, where 3,000 scientists are employed.

A Pfizer spokewoman could not immediately confirm whether Groton would be involved in the collaboration with Merck.

l.howard@theday.com

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