Merck KGaA has decided to pull the plug on its pact with Ono Pharmaceutical Co to develop the Japanese drugmaker’s  investigational multiple sclerosis treatment ceralifimod.

The German group bagged worldwide exclusive license rights from Ono to ceralifimod (excluding Japan, Korea and Taiwan) in October 2011. However, the Darmstadt-headquartered firm has terminated the pact because the compound “does not meet Merck’s threshold for continued investment”.

Ono noted that while ceralifimod met a primary endpoint (the reduction of cumulative number of MRI lesions) in a Phase II trial reported in April 2012 in relapsing-remitting MS patients, both companies have agreed to terminate the agreement on the sphingosine-1-phosphate (S1P) receptor agonist. The decision was taken after “comprehensively considering the significant change in market circumstances of MS treatment”, and weighing up the costs of “large and extensive Phase III studies” which pushed back a New Drug Application filing. “Ono will explore any further development,” the Osaka-based company added.

That change in the MS market has been driven by the spate of MS pills that have been approved, firstly  Novartis' Gilenya (fingolimod) and then Biogen Idec’s Tecfidera (dimethyl fumarate) and Sanofi’s Aubagio (teriflunomide). Sales of Merck’s injectable Rebif (interferon beta-1a) are still holding up despite the fierce competition from oral therapies but a decline is likely in the coming months.