Schering Plough, Merk Announce Development, Marketing Agreement

Merck (Whitehouse Station, NJ) and Schering-Plough (Madision, NJ), the only major pharmaceutical companies that have not merged themselves into hyphenation-heaven, are planning to collaborate in two major product areas: cholesterol management and allergy.

The deal focuses on combination therapies, for each indication, that include one drug from each company. For lipid management Merck and Schering will look into combining Zocor (simvastatin), Merck's cholesterol-lowering drug, with ezetimibe, Schering's investigational cholesterol absorption inhibitor, as a once-daily tablet. Talk about synergy: Zocor inhibits cholesterol synthesis in the liver while ezetimibe blocks cholesterol absorption through the digestive tract from foods. Merck's ongoing programs for Zocor as a single-agent cholesterol-lowering treatment will not be affected by the collaboration.

In addition, the two companies will develop and market a once-daily combination tablet containing Schering's once-daily Claritin (loratadine) and Merck's once-daily Singulair (montelukast sodium) for treating allergic rhinitis (hay fever) and asthma. Again, the products work together since Claritin blocks histamine and Singulair is a leukotriene receptor antagonist. The Claritin-Singulair accord does not affect Schering's ongoing development of Claritin or desloratadine, or Merck's programs for Singulair in asthma treatment or its attempt to position the drug for hay fever.

The agreements will be administered through separate partnerships owned equally by the two firms, drawing on the research and sales forces of both companies.

Dual-Action Approach
Codevelopment agreements, especially for complimentary pharmaceutical products, are an attractive way to add value to product portfolios without marrying your business partner. Given the tremendous success of combination therapies in HIV, it's a wonder more such deals haven't been struck. Combinations of ezetimibe and Zocor could achieve dramatic cholesterol reductions since the drugs work through different mechanisms. According to Schering ezetimibe does not interfere with the absorption of other nutrients and has an excellent safety profile. Ezetimibe is currently undergoing Phase III trials as a monotherapy and in co-administration with statins.

Similarly, a Claritin/Singulair tablet targets two key respiratory tract inflammation mediators: histamine and leukotrienes, which could lead to broad allergy relief. Merck and Schering will also explore this combination for asthma.

"We believe there is a compelling medical rationale behind these proposed dual-action combination products," said Raul E. Cesan, president and chief operating officer for Schering-Plough. "This collaboration… affords the opportunity to develop and bring to market more quickly two new classes of medications that are projected to have medical benefits beyond those available from existing products."

Zocor is among the leading statin medicines for cholesterol management, with 1999 U.S. sales of $2.6 billion. Claritin, the most-prescribed antihistamine in the United States, enjoyed 1999 U.S. sales of $2.3 billion. Singulair, launched in the United States in 1998, is already the leading leukotriene antagonist, wish 1999 sales of $380 million.

Cholesterol-lowering drugs are huge, with 1999 U.S. sales of $5.9 billion annual growth of 25%. The U.S. allergy market in 1999 experienced 17% growth in total prescriptions, generating $4.9 billion in sales.

By Angelo DePalma