BioWorld Today Contributing Writer

Ariad Pharmaceuticals Inc., of Cambridge, Mass., elected to exercise an option in a contract with its partner Merck and Co. Inc. to co-promote the investigational drug ridaforolimus, being developed by the companies for sarcoma. The terms of the 2010 license agreement allow Ariad to co-promote the drug, employing 20 percent of the sales force, with compensation from Merck for its sales efforts.

Co-promotion clauses are becoming popular among biotech companies as a way to develop into a fully integrated drug discovery and development organization while still benefiting from a partnership with a pharma company. Ariad incorporated its co-promotion clause into its partnership agreement with Merck during an overall restructuring of that agreement in 2010.

The collaboration between Ariad and Merck dates back to July 2007, when the two companies joined up to develop ridaforolimus in several cancer indications. The partnership was restructured in May 2010, allowing Merck an exclusive license to develop, manufacture and commercialize the drug in oncology, with Merck assuming responsibility for clinical trials and regulatory filings.

"Last April and May, when we finalized the agreement with Merck, it was quite clear to us then that ridaforolimus had a good chance of achieving its primary endpoint in the sarcoma trial. That would lead to a potential launch of ridaforolimus next year," Ariad CEO Harvey Berger told BioWorld Today. "Our confidence in the outcome of the SUCCEED trial in sarcoma is what led us to want to include a co-promotion option."

That option was part of a much broader strategy for the company that applied not only to ridaforolimus, but all of its products. "We want to build a fully integrated oncology business," Berger said.

Ariad reported positive top-line results from a Phase III trial of ridaforolimus in metastatic soft-tissue or bone sarcoma in January. The trial, designated SUCCEED, was carried out under a special protocol assessment granted by the FDA. The data showed that there was a 28 percent reduction in the risk of progression compared to placebo and a 21 percent improvement in progression-free survival. (See BioWorld Today, Jan. 19, 2011.)

SUCCEED enrolled patients who had previously demonstrated a favorable response to conventional chemotherapy. The dose schedule, 40 mg per day, five days per week, was structured to take advantage of a hiatus between chemotherapy cycles in conventional treatment for metastatic sarcoma.

According to Ariad, ridaforolimus inhibits the protein mTOR, a central regulator of protein synthesis, cell proliferation and cell cycle progression in cancer cells. Blocking mTOR starves the cancer cells by disrupting those processes.

The company is preparing for the launch of ponatinib, a BCR-ABL inhibitor that it is developing for chronic myeloid leukemia. That drug may be launched as soon as 2012.

Berger said that Ariad's exercise of its co-promotion rights to ridaforolimus "dovetails perfectly" with its commercialization plan for ponatinib. "If we only had ridaforolimus, I suspect we wouldn't co-promote it," he said.

However, the co-promotion activities for ridaforolimus will give Ariad a jumpstart in building a sales organization for ponatinib and its other oncology products.

"We're going to hire extremely experienced, highly technically knowledgeable, medically and scientifically trained sales representatives," Berger said.

Ariad will face serious competition from major pharmas in the cancer space, particularly from Novartis AG, which markets Afinitor (everolimus), an mTor inhibitor approved for renal cell carcinoma after failure of treatment with sunitinib or sorafenib. Its sales representatives will need to know how to play up the advantages of ridaforolimus.

Although co-promotion clauses can be very advantageous for biotech, they are not free for the asking. "Having negotiated the Merck agreement, I can assure you it's very hard to get. You have to really want it, and be convincing that it's part of your core business strategy," Berger said. "With Merck, we have what I consider very favorable terms for the co-promote. Merck will compensate us on our sales efforts. For all intents and purposes, our sales effort costs nothing."