Pfizer and Merck partner to develop diabetes drug

Drug giant Pfizer Inc. has joined forces with competitor Merck & Co. Inc. to co-develop a new medicine for patients with type 2 diabetes, the companies announced Monday.

Pfizer, which has a research-and-development site in Groton, currently has a diabetes drug called ertugliflozin in late-stage development. Merck has agreed to pay Pfizer $60 million up front, with the promise of additional milestone payments in the future, for rights to co-develop the drug and to market it seperately or in combination with its own diabetes remedies.

Merck will retain a 60 percent share of ertugliflozin's revenues and costs, while Pfizer will have 40 percent ownership.

"Ertugliflozin was discovered in Pfizer's Cardiovascular & Metabolic Diseases (CVMED) Research Unit at its Groton laboratories," Pfizer spokewoman Joan Campion said in an email to The Day.

The partnership between the drug giants is a bit unusual for Pfizer, which normally has the market muscle to bring its own drugs through the regulatory process. But in this case, according to industry insiders, Merck has a leg up thanks to its experience with marketing Januvia, a $5.7 billion blockbuster.

"Pfizer isn't exactly known for diabetes," according to Brian Orelli of the investing site The Motley Fool. "It could certainly make the push, but having a partner that's experienced in the space should produce higher sales with lower expenses."

Ertugliflozin is a bit behind the curve in diabetes-drug development in a market that already includes Invokana by Johnson & Johnson as well as the slightly ahead but not-yet-approved Forxiga from AstraZeneca and Bristol-Myers Squibb. But Orelli pointed out that a combination pill of ertugliflozin and Januvia would be an attractive option for doctors and patients who prefer to reduce the number of medications that must be prescribed and taken.

As noted in the industry blog Fierce Pharma, the deal between Pfizer and Merck took some insiders by surprise, including Pfizer's former R&D chief John LaMattina of Stonington.

"This is like the Yankees and Red Sox combining their scouting departments looking for prospects," LaMattina said in a Twitter posting.


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