Having just completed its takeover of India’s Ranbaxy Laboratories, Daiichi Sankyo has linked up with the USA’s ArQule to develop cancer treatments.

Firstly, the Japanese drugmaker will make a $60 million upfront fee and “significant development and sales milestone payments” to co-develop ARQ 197, an orally-administered inhibitor of the c-Met receptor tyrosine kinase, to treat cancer. The deal covers the USA, Europe, South America and the rest of the world, excluding Japan, China, South Korea and Taiwan, where Kyowa Hakko Kirin has exclusive rights for development and commercialisation.

In addition, Daiichi will pay $15 million for use of ArQule's kinase inhibitor discovery platform to develop new cancer therapies. Daiichi will have the option to license two compounds directed to targets identified using this platform,which is called AKIP. The firms will share equally the costs of Phase II and III studies of ARQ 197, with ArQule's share of the late-stage trials being covered by milestone and royalty payments.

Paolo Pucci, chief executive at ArQule, said the deal “supports and further validates the application of our proprietary technology platform” and “it provides meaningful, non-dilutive infusions of cash, as well as an opportunity for cost sharing”. His counterpart at Daiichi Sankyo, Takashi Shoda, said partnership is the next important milestone for the firm “to solidify a strong and viable pipeline in oncology”.

Meantime, ArQule reported a net loss for the third quarter of $11.3 million, up from $11.1 in the year-ago period. Revenues were slightly down at just below $2.7 million.