Market Commentary

Merck Ends Sichuan Kelun Deal and Commits Billions to Cancer Drug

Laiba Bilqees
6 Feb 2024 · 1 minute read

Merck & Co Inc (MRK:US), a pharmaceutical giant with a global reach, has reportedly ceased collaborative efforts with Chinese pharmaceutical entity Sichuan Kelun Pharmaceutical Co on the development of two nascent cancer drugs. The drugs in question have not yet progressed to the clinical trial stage.

This surprising move follows Merck's announcement of a $5.5 billion deal with Daiichi Sankyo, another pharmaceutical giant based in Japan. This collaboration is poised to advance three candidate cancer drugs, with potential future compensations for Daiichi Sankyo increasing to an astounding $22 billion.

Despite the current drawback, Merck’s aspirations for its oncology sector are undiminished, targeting a surge to $6 billion in revenue by the end of the fiscal year in March 2026. This ambitious goal signifies a quintupling of its revenue over a span of three years.

"Cooperation with Merck on seven other ADC candidates - three in clinical trials - was unaffected," stated Kelun, indicating that the partnership persists despite recent setbacks.

Merck shares fell 7.62% year-to-date.

In September, several politicians, both Republican and Democrat, made significant transactions in MRK stock. Congressman Ro Khanna purchased shares in the company, while others divested their holdings.