GTx and Merck to develop new SARM molecules

Under the terms of the collaboration agreement and related stock purchase agreement, GTx and Merck will combine their respective selective androgen receptor modulators (SARM) research programs. GTx will receive an upfront payment of $40 million plus $15 million in research reimbursements to be paid over the initial three years of the collaboration. In addition, Merck will make an equity investment of $30 million in GTx common stock at a 40% premium to the 30-day average closing price.

GTx will also be eligible to receive up to $422 million in future milestone payments associated with the development and approval of a drug candidate if multiple indications receive regulatory approval. Additional milestones may be received for the development and approval of other collaboration drug candidates. GTx will receive royalties on any resulting worldwide product revenue.

This collaboration includes GTx’s lead SARM candidate, Ostarine, which is currently being evaluated in a Phase II clinical trial for the treatment of muscle loss in patients with cancer, and establishes a broad SARM collaboration under which GTx and Merck will pool their programs and partner to discover, develop, and commercialize current as well as future SARM molecules.

As part of this global agreement, Merck will be responsible for all future costs associated with ongoing development and, if approved, commercialization of Ostarine and other investigational SARMs resulting from the collaboration.

The effectiveness of the collaboration agreement and the investment in GTx common stock by Merck are subject to the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, if applicable, as well as other customary closing conditions.

Mitchell Steiner, CEO of GTx, said: “By combining our drug candidates, resources and talents, this Merck-GTx collaboration positions both companies for success in the development and commercialization of SARMs.”