Merck signs agreement with Dr. Falk Pharma GmbH regarding MK-8690

Merck (MRK) announced that the company, through a subsidiary, Prometheus BioSciences, has reached an agreement with Dr. Falk Pharma GmbH to discontinue an existing contract concerning co-development and co-commercialization rights in certain territories for MK-8690 (formerly PRA-052), and for Merck to assume full responsibility for the development program going forward. MK-8690 is an investigational anti-CD30 ligand monoclonal antibody being evaluated by Merck in an early-stage clinical trial. Under the terms of the agreement, Prometheus BioSciences and Falk have discontinued their collaboration based on their existing co-development contract resulting in Prometheus having secured global rights to MK-8690. In exchange, Falk will receive a $150 million upfront payment and is eligible to receive a payment associated with a development milestone as well as royalties on sales in certain territories. The original contract between Falk and Prometheus was signed in 2020. Merck subsequently acquired Prometheus in 2023. As a result of the transaction with Falk, Merck will record a pre-tax charge to research and development expenses of $150M, or approximately 5c per share, in both its GAAP and non-GAAP fourth quarter results.