Termination of the agreement will be effective 90 days from August 22, 2007.
As a result, MethylGene will regain exclusive rights to its beta-lactamase inhibitor program to overcome beta-lactamase mediated antibiotic resistance.
“We believe Merck has invested significant resources in this program, including the identification of an optimized lead compound which was advanced into expanded preclinical studies. Merck was evaluating this compound with the goal to potentially select it as a clinical candidate,” said Donald Corcoran, president and CEO of MethylGene.
“While we are disappointed Merck has decided not to move any compound forward into clinical development, we have regained exclusive rights and it is our intent to seek an alternative partner for the program.”
MethylGene says the termination of this agreement does not have a near-term financial impact on the company as it has not been involved in, nor provided resources, for the R&D of this non-core program, as planned, since July 2005. In addition, the company has not included milestone payments from Merck in its cash projections.