Transcript Merck Licensing

Merck: What we Look for
in a Licensing Partner
Susan Rohrer, PhD
Senior Director
Licensing & External Research
Merck Research Laboratories
ASENT Annual Meeting
Bethesda, MD
March 5, 2010
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Forward-Looking Statement
This presentation contains "forward-looking statements" as that term is defined in the
Private Securities Litigation Reform Act of 1995. These statements are based on
management's current expectations and involve risks and uncertainties, which may cause
results to differ materially from those set forth in the statements. The forward-looking
statements may include statements regarding product development, product potential or
financial performance. No forward-looking statement can be guaranteed and actual results
may differ materially from those projected. Merck undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information, future
events, or otherwise. Forward-looking statements in this presentation should be evaluated
together with the many uncertainties that affect Merck's business, particularly those
mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K
for the year ended Dec. 31, 2008, and in any risk factors or cautionary statements
contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K,
which the Company incorporates by reference.
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Agenda
Merck: Background & Partnering Strategy
Criteria for Licensing
Neuroscience Research and Licensing
The Licensing Process at Merck
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Merck is a Global Health Care Leader with
Diversified Portfolio
Therapeutic Area
Schering-Plough Products
Merck Products
Cardio /
Metabolic
Infectious
Disease
Respiratory
Women’s
Health
Arthritis /
Immunology
Oncology
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Merck’s R&D Strategy: Science-Based
Diversification of our Portfolio
Patient
Population
Approaches
Modalities
Merck’s R&D Strategy:
Science-Based Diversification of Merck’s Portfolio
• Primary Care
• Specialty Care
• Hospital Setting
• Novel
• Best in Class
• Lifecycle
Management
• Small Molecules
• Vaccines
• Biologics
• Peptides
• RNAi
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General Areas of Interest for Licensing & Partnership
Atherosclerosis and Cardiovascular Diseases
Lipids / Metabolic Syndrome
Hypertension / Cardiovascular
Other Areas
Biologics
Follow-on Biologics
Novel Biologics
Biologic Technologies
Bone, Respiratory, Immunology, and Endocrine
Arthritis and Immune-Based Diseases
Asthma / COPD
Bone
Sarcopenia
Urology and Women's Health
Diabetes and Obesity
Infectious Diseases and Vaccines
Antibacterials
Antifungals
Antivirals – HIV
Antivirals – HCV
Antivirals – Other Interests
Antiviral and Anti-infective Technologies
Vaccines
Updated October 2009
Neurosciences and Ophthalmology
Alzheimer’s Disease
Circadian Disorders
Migraine
Ophthalmology
Pain
Parkinson’s Disease
Psychiatric Diseases
Oncology
Research Technologies
RNA Therapeutics
Enabling Technologies
Target Identification / Validation
Biomarkers
Lead Identification and Screening Assays
Biologics Production Methods
Synthesis and Purification
Modeling Tools
Universal Platforms
Automated Workflows
Information Technology / Software
Analytical Technology
• We have aligned our areas of interest with our franchises, plus new
technologies and biologics.
• Additionally, Merck will continue to pursue external licensing opportunities
in other disease areas where clinical proof of concept exists.
• Merck will also pursue niche acquisitions and partnerships in
diagnostics and devices where it complements our pipeline, and not
as a stand-alone business.
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Select transactions: 2007-2009/2010
Licensing Aligns with Franchises and New
Technologies
Anti-Infectives/
Antivirals/Vaccines
Cubist
DNDi
Idera
MBL/Medarex
Orchid
Pfenex
Ranbaxy
UT, San Antonio
Wellcome Trust
Technologies
Adimab
Avecia Biologics*
Depomed
Insmed*
MicroDose
Nuevolution
Oncology
Ariad
AstraZeneca
Celera
Dana Farber
Piramal Life Sciences
CNS/Ophthalmology
Addex (PD & Schiz)
Gladstone Institutes
Santen
Cardiovascular
Cardiome
Galapagos
KineMed
Portola
Xenon
Diabetes/Obesity
Ambrx
Envoy
Galapagos
Marcadia
Bone/Respiratory/
Inflammation/
Endocrine
Galapagos
GTx (Endocrine)
Harvard University
(Osteoporosis)
Japan Tobacco
(Osteoporosis)
1pre-merger
*acquisition
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External Discovery and Preclinical Science:
Current Collaborations
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Agenda
Merck: Background & Partnering Strategy
Criteria for Licensing
Neuroscience Research and Licensing
The Licensing Process at Merck
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For Academic Collaborations,
Merck’s Approach is Driven by Strategy
• Defining goals and delivering against a work plan are the keys to a successful
collaboration.
• Well defined goals are critical
• Funding is based on the scientific work plan, not for general lab support
– Milestones / Renewal based on delivering on objectives
• Intellectual property is important, but not the whole story
– License to pre-existing IP sometimes, but not always
– An exclusive option period to license new IP arising from the Collaboration
• Merck is mindful of the university’s mission and obligations
– Create a structure that is consistent with university policy
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Desirable Attributes of a Therapeutic Candidate
 Satisfies an unmet medical need
 Novel target
 Is it validated?
 Will the molecule be first in class? Best in class?
 Solid IP position
• On the target
– Freedom to operate and methods of treatment
• On the molecule
– Composition, synthetic routes, polymorphs, etc
 Potential for changing standard of care
 Biomarker strategy is a plus
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Demonstrable Attributes of an Attractive
Therapeutic Candidate
 Potency in-vitro and in-vivo
 Mechanism -- evidence that agent “hits the target” in animals
• Minimally a pharmacodynamic assay
• Ideally, activity in a validated animal model
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Selectivity vs. a large range of receptors, enzymes, ion channels
Predictable pharmacokinetics and proper dose selection
Preliminary tolerability and toxicology data
Oral bioavailability (for small molecules)
Good half-life for biologics or small molecules
Licensor understands the competitive environment and can describe
strengths and potential weaknesses of the molecule
 Clinical efficacy if molecule is sufficiently advanced
 Understanding of the regulatory environment
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Agenda
Merck: Background & Partnering Strategy
Criteria for Licensing
Neuroscience Research and Licensing
The Licensing Process at Merck
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Defining the Neuroscience Strategy at Merck
• Create an innovative & sustainable environment to lead in the
discovery, development, and marketing of differentiated
therapeutics for chronic, disabling disorders of the nervous system
and eye that will be valued by patients, physicians, and payers.
Focus on therapies for:
• Alzheimer’s Disease
• Schizophrenia
• Pain & Migraine
Also interest in:
Sleep Disorders, Parkinson’s Disease, Depression,
Ophthalmology, Tobacco & Alcohol Abuse
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Merck Neuroscience Franchise at a Glance
• New approach to the treatment of migraine
– Telcagepant (MK-0974): First-in-class oral antagonist of calcitonin
gene-related peptide (CGRP)
• Develop new approaches for the treatment of sleep disorders
– Potent and selective orexin antagonists for insomnia and related
disorders
• Multiple novel mechanisms in preclinical and early clinical development and
complemented by strong basic research portfolio across:
-- Alzheimer's Disease-- Schizophrenia
-- Pain
-- Migraine
-- Sleep
-- Depression
-- Parkinson's Disease
-- Alcoholism
-- Ophthalmology (siRNA approach)
Gladstone Institute –
Innovative Therapies for Alzheimer’s Disease
• Major collaboration with Dr. Robert Mahley of the J.
David Gladstone Institute to develop drugs directed
to the ApoE pathway
• Apolipoprotein E4 has been linked to a variety of
neurodegenerative diseases including Alzheimer’s
– ApoE4 expression is a major risk factor for
developing AD
– Blocking ApoE4-induced neuronal damage may
lead to disease modification strategies
• Merck and Gladstone will conduct a joint research
program to discover modulators of ApoE4 function.
Gladstone will receive milestone payments and
product-based royalties.
• Another example of innovative early-stage
partnering by Merck
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Agenda
Merck: Background & Partnering Strategy
Criteria for Licensing
Neuroscience Research and Licensing
The Licensing Process at Merck
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There is a highly refined licensing process
Opportunity
Initiation
• Worldwide scouts build
relationships and seek
out opportunities
• Nonconfidential
information submitted for
review
Opportunity
Evaluation
• Initial nonconfidential
review by Review
and Licensing
Committees
• Confidentiality
disclosure agreement
signed
• Confidential review
• Face-to-face scientific
meetings
• Senior scientific
management approval
Doing the Deal
• Term sheet
negotiations conducted
by Transaction Manager
• Due diligence
• Definitive agreements
negotiated
• Agreements executed
Managing
Partnerships
• Alliance Management
– Alliance managers
assigned
– Alliance launched
– Monitor progress
throughout the
agreement
• Basic Research
Collaboration
Implementation
– Senior scientists
dedicated to successful
execution of the research
collaboration
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We Constantly Scan for Partnering
Opportunities
2008 Alliances
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6000
Licensing
Opportunities
2000
Reviewed at
RLC*
569
Reviewed
under a CDA
Key Acquisitions &
Signed Agreements
*Representation from IBR (Biology and Chemistry), EBR, Clinical, Marketing (inc.
Commercial Group Leader and New Products Leader), Alliance Management, Portfolio
Management, GCI, and other areas
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Collaboration Creates Value
Combining our Strengths
Sharing our Successes
Partners
• Discovery
• Innovation
• Subject Matter
expertise
Merck
• Novel technology
application
• Development
• Commercialization
expertise
• Subject Matter
expertise
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