Filling the last remaining gap in its efforts to market Cubicin worldwide, Cubist Pharmaceuticals Inc. entered a license agreement with Merck & Co. Inc. for development and commercialization of the antibiotic in Japan.

It's the seventh ex-U.S. partnership for Cubicin (daptomycin injection). The first deal dates back to 2003, when Cubist licensed rights to Chiron Corp. (now Basel, Switzerland-based Novartis AG) to develop and market Cubicin in Eastern and Western Europe, along with Australia, New Zealand, India and certain Central American, South American and Middle Eastern countries.

That deal was signed within a month of Cubicin's U.S. approval as the first lipopeptide antibiotic to treat complicated skin and skin structure infections (cSSSI) caused by Gram-positive bacteria.

"We've worked with various partners during the life of" Cubicin's development, said Eileen McIntyre, senior director of corporate communications for Lexington, Mass.-based Cubist. "We entered agreements that reflected the opportunities at that time."

Through the most recent deal, the company adds an established Japanese firm as its partner: Tokyo-based Banyu Pharmaceutical Co. Ltd., a wholly owned subsidiary of Whitehouse Station, N.J.-based Merck, which previously achieved commercialization in Japan of Tienam, a carbapenem antibiotic.

In exchange for Cubicin rights, Merck will make an up-front cash payment of $6 million to Cubist, plus up to $39.5 million in regulatory and sales milestones. Merck also agreed to pay an undisclosed transfer payment that would include the cost of producing Cubicin, as well as an amount to cover Cubist's royalty payment to Indianapolis-based Eli Lilly & Co., which originally developed the product, and a margin to Cubist, McIntyre said.

Under its license, Merck, through Banyu, will seek approval of Cubicin in cSSSI and bloodstream infections. Though Merck has not disclosed a timeline for Japanese approval of Cubicin, it said that Banyu "does expect to conduct some additional, Japanese-specific studies" prior to regulatory filing, McIntyre told BioWorld Today.

A once-daily intravenous product, Cubicin is approved in the U.S. for cSSSI, including strains of methicillin-resistant Staphylococcus aureus (MRSA), and for bacteremia, including right-sided infective endocarditis caused by MRSA and methicillin-susceptible staph infection. Cubist markets the antibiotic itself in the U.S., and fourth-quarter sales totaled $56.4 million, marking a 54 percent increase over fourth-quarter 2005.

The company has projected peak U.S. Cubicin sales at $500 million, McIntyre said.

The product, however, might have to face some competition soon in the U.S. Gram-positive infection space. South San Francisco-based Theravance Inc. expects an FDA decision on telavancin, a once-daily injectable lipoglycopeptide, in cSSSI in the second half of this year, and Targanta Therapeutics, of Cambridge, Mass., anticipates filing a new drug application later this year for its once-daily glycopeptide antibiotic, oritavancin, in cSSSI. (See BioWorld Today, Dec. 11, 2006, and Feb. 12, 2007.)

Outside the U.S., Cubicin has gained approval in Europe in cSSSI and awaits a regulatory ruling on a separate application for bacteremia. The product was launched in Israel in 2004 by partner Medison Pharma Ltd, and later this year, will hit the market in Taiwan through a licensing agreement with TTY Biopharm Ltd.

"There have also been filings done in several other countries," McIntyre said, including Canada, for which partner Oryx Pharmaceuticals Inc. anticipates approval later this year, and Korea, where Cubicin also is expected to gain approval this year by partner Kuhnil Pharmaceuticals.

In December, Cubist licensed Chinese rights to London-based AstraZeneca plc in a deal calling for $10.25 million up front and undisclosed regulatory and sales milestones. McIntyre said AstraZeneca expects regulatory filing this year.

Beyond cSSSI and bacteremia, Cubist is exploring Cubicin dosage levels in a Phase II study in osteomyelitis. Since the product gets "some off-label use in that indication, the FDA thought it would be a good idea" to determine an appropriate dosage level, McIntyre said.

Cubist, which reported net income of $5.4 million, or 10 cents per share, for the fourth quarter, ended the year with a cash position of $309.2 million. The company's stock (NASDAQ:CBST) closed at $20.84 Thursday, up 44 cents.