Germany’s Merck Gets Chinese Cancer Drug

Merck Serono will pay up to $233 million to the Beijing-based drug discovery firm BeiGene for marketing rights outside China to a cancer drug candidate. BeiGene says its compound may be effective against melanoma, colorectal cancer, and other forms of the disease. Human trials of the drug are expected to begin next year.

The deal marks the second time in less than two years that a multinational company has acquired rights to a drug invented in China. In December 2011, Shanghai-based Hutchison MediPharma agreed to license to AstraZeneca the global rights to volitinib, a tyrosine kinase inhibitor being developed as a cancer treatment.

BeiGene’s drug candidate is a small molecule that has dual activity, explains founder and CEO John V. Oyler. The compound, BeiGene-283, is broadly similar to the approved Plexxikon drug Zelboraf, which inhibits the protein BRAF. But it represents a second generation of BRAF inhibitors that is more effective and has fewer side effects, according to Oyler.

Its second form of action is to inhibit the epidermal growth factor receptor, which has been linked to a variety of cancers. “By building a dual inhibitor, which we purposely did, we are hoping to have added efficacy in colorectal cancer, something that other BRAF drugs do not achieve,” he says.

BeiGene was formed less than three years ago to focus on oncology research. Its senior scientific team consists of Chinese-born scientists with drug research and development experience at multinational companies. Oyler is a successful entrepreneur who, in the U.S., founded and sold firms involved in pharmaceutical research and other sectors.

Companies based in China will license compounds to multinational firms with increased frequency in the future, says Greg B. Scott, president of ChinaBio, a Shanghai-based company that provides intelligence on China’s biotech industry and supports Chinese start-ups. “BeiGene is one of a new breed of companies created by expatriates or Chinese scientists who return to China specifically to develop drugs in the country,” he says. “These companies are really moving China’s drug industry forward.”