Merck Signs Licensing Deal With Santen, Marking Second Deal For Japan’s Top Ophthalmology Maker

Japan's Osaka-based Santen Pharmaceutical April 15 signed a worldwide licensing agreement with Merck for Tapros / Taflotan (tafluprost), a treatment for glaucoma and ocular hypertension.

"It's quite a big deal and it allows Santen to maximize the drug's business impact worldwide," Santen Spokesman Go Sasaki told PharmAsia News. Sasaki noted that Merck has strong market penetration especially in ophthalmology.

According to the agreement, Merck will pay an upfront fee, milestones and royalties based on future tafluprost sales in both preserved and preservative-free formulations. In exchange, Merck obtains exclusive marketing rights to tafluprost in North America, Western Europe (excluding Germany), South America and Africa. Santen retains commercial rights in most Eastern European countries, Northern Europe and Asia including Japan.

The deal is "very important to Merck to expand its portfolio of ophthalmology products," Merck Spokeswoman Kim Hamilton told PharmAsia News. She noted that tafluprost, which belongs to the prostaglandin class, is under investigation in the U.S. and the preservative-free formulation represents the first preservative-free prostaglandin for the reduction of elevated intraocular pressure in open-angle glaucoma and ocular hypertension.

As part of the agreement, the firms will co-promote the drug in Germany and Poland, Hamilton said, declining to give further information about regarding regulatory fillings. Although financial terms were not disclosed, Japanese Nikko Cordial Securities estimated royalties around ¥7 billion at market peak.

Investors in Japan reacted favorably to the deal; the Tokyo stock exchange-listed company saw shares soar by as much as 10 percent, reaching the highest level in 10 months. In a research note, Goldman Sacks analysis commented, "The licensing deal with a global ophthalmology maker such as Merck is a surprising plus [to the company], considering that in the U.S. and Europe, prostaglandin analogue for glaucoma is considered to have limited market." Goldman rated the company shares with "overweight" and raised the target price from ¥3,200 to ¥3,700.

Jointly developed with Asahi Glass, tafluprost has been approved in 11 countries and currently marketed in Japan under the brand name Tapros and in Germany, Denmark, Sweden, Finland and Norway under Taflotan . Since being launched last December in Japan, tafluprost achieved ¥0.7 billion in sales, and Santen estimates ¥7 to ¥8 billion in annual sales by 2010.

Sasaki added that as Japan's top eye care-product maker with $1.03 billion in sales, Santen has been seeking ways to balance strong product development and expanding its worldwide market presence.

The Merck deal is the second such for deal the company in two months. In March, major U.S. ophthalmology company, Bausch & Lomb signed an agreement obtaining development, manufacturing and marketing rights to hydrophobic acrylic intraocular lens MD-14 in all geographic regions except Japan. The financial terms were not disclosed ("The Gray Sheet,' March 9, 2009, In Brief).

In the meantime, Merck is also paying increasing attention to the Japanese market. Elizabeth Cobbs, senior director of public and industrial policy for Merck's Japanese subsidiary Banyu, told PharmAsia News recently that Merck is "trying to bring everything to Japan." (Also see "Banyu’s Elizabeth Cobbs on Merck’s Regulatory Policies in Japan: An Interview with PharmAsia News (Part 2 of 2)" - Scrip, 20 Apr, 2009.)

Merck's Hamilton said that other prostaglandins containing preservatives currently on the market include: Pfizer's Xalatan (latanoprost), Allergan's Lumigan (bimatoprost), Alcon's Travatan (travaprost) and Ciba Vision's Rescula (unoprostone isopropyl). Billed as the leading branded treatment for ocular hypertension and open-angle glaucoma, Xalatan's sales in 2008 were $1.7 billion, up 9 percent. The Xalatan patent expires in March 2011. Last month, Pfizer and Baush & Lamb signed a co-promotion deal covering Xalatan and other products.

Sasaki said that safety and efficacy for tafluprost is comparable to Xalatan, and that tafluprost can also be stored at room temperature.

- Brian Yang ([email protected])