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Business Deals

Eisai teams with Merck to boost sales of cancer drug

Japanese drugmaker bets future on using payments to devise dementia treatments

Eisai sees the development of treatments for Alzheimer's disease as the company's future earnings source.   © Reuters

TOKYO -- Eisai said Thursday it has agreed to collaborate with U.S. counterpart Merck on development and marketing of the Japanese pharmaceutical company's cancer drug Lenvima, a deal that also brings a timely infusion of cash.

The Japanese drugmaker thinks it can use Merck's global marketing muscle to develop Lenvima into a billion-dollar blockbuster. "We expect to attain triple the sales we could manage alone," CEO Haruo Naito said at a news conference here covering the announcement.

But Eisai also intends to use revenues raised through the deal to help cover the enormous cost of developing new treatments for dementia, a huge market in which the Japanese company is staking its future.

Merck and Eisai will split the gross profits generated by Lenvima. Merck will also make one-time payments totaling 80 billion yen ($756 million) to Eisai along with development milestone payments. The total may reach 611 billion yen, with much being paid before the end of fiscal 2021.

Lenvima is used to treat thyroid cancer and some forms of kidney cancer in Japan, and Eisai has applied to extend the drug to include treatment of liver cell cancer. But sales for the year ended in March 2017 reached just 21.5 billion yen, far short of blockbuster status.

Merck and Eisai will split the costs associated with testing and sales promotions. They will investigate the use of Lenvima in combination with Merck's cancer immunotherapy drug Keytruda, which is under testing for treatment of seven kinds of cancers. Recent reports suggest Lenvima and Keytruda in combination are more effective in shrinking tumors for kidney cell and some other cancers than therapy with either alone.

If development proceeds well, Lenvima sales could top 500 billion yen, Naito said.

Eisai seeks to develop dementia treatments as the pillar of its future earnings and hopes to commercialize a first new drug in this field as early as fiscal 2020. But the company is thought to be spending 20 billion yen annually just on its drugs now in clinical testing. Eisai no longer generates the revenues it did when Alzheimer's drug Aricept and ulcer drug Pariet were still under patent.

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