Merck & Co has signed a deal with Minnesota, USA-based SurModics which will see the firms jointly develop drugs for eye diseases, a pact that could be worth over $300 million to the latter.

The two companies are hoping to develop compounds that combine SurModics' I-vation sustained drug delivery system with the steroid triamcinolone acetonide (TA) and other Merck candidates to treat retinal disease. Under the terms of the agreement, the New Jersey-headquartered drugs giant will pay an initial upfront licensing fee of $20 million to SurModics, which will be eligible to receive up to an additional $288 million in milestones, plus possible royalties, associated with the successful product development and US and European regulatory approvals.

In addition, Merck said that it will reimburse SurModics for the development costs it has already incurred, and the latter will be responsible for the manufacture and supply of clinical and commercial products. There would certainly appear to be a market for them as the firms believe that I-vation is a system capable of delivering drugs on a sustained release basis for well over a year that can be implanted in a minimally invasive procedure, and then be removed once the drug has been fully released. At the moment, the majority of treatments for age-related macular degeneration and diabetic macular oedema require repeated injections into the eye, so the advantages of a single implant are clear.

Darryle Schoepp, Merck's senior vice president and head of neuroscience R&D, said that "I-vation's encouraging TA Phase I clinical trial results along with SurModics' depth of technologies and expertise in polymers for sustained drug delivery” make it “a compelling and complementary development partner”. He added that the agreement “adds to our strong existing franchise in glaucoma”, notably with Cosopt/Trusopt (dorzolamide), “and builds upon Merck's long history of innovative therapeutics in ophthalmics".

Priority review for Merck’s HIV drug Isentress

Meantime, Merck also announced that the US Food and Drug Administration has granted a priority review for its experimental HIV drug Isentress (raltegravir) and a decision on the drug from the agency is now expected by mid-October.

If approved, Isentress, formerly known as MK-0518, would be the first in a new class of antiretroviral agents called integrase inhibitors that block the insertion of HIV DNA into human DNA, Merck said.