Baxter International and Merrimack Pharmaceuticals have announced an exclusive license and collaboration agreement for the development and commercialization of MM-398 (nanoliposomal irinotecan injection), also known as nal-IRI. Baxter gains exclusive commercialization rights for all potential indications of MM-398 outside the U.S. and Taiwan, and Merrimack retains commercialization rights in the U.S.; the rights in Taiwan are held separate/news-online/company/EMAly.

MM-398 is an investigational drug candidate for which Merrimack is preparing a New Drug Application in the U.S. for the treatment of patients with metastatic pancreatic cancer previously treated with a gemcitabine-based therapy. Pancreatic cancer is a rare and deadly disease that is difficult to diagnose and has limited treatment options available today.

Merrimack receives a $100 million upfront payment from Baxter, which will be recorded by Baxter as a special pre-tax in-process research and development charge in the third quarter of 2014. Merrimack also is eligible to receive $120 million in regulatory milestone payments related to the first pancreatic cancer indication as these milestones are achieved, and $280 million in development and regulatory milestone payments for a second pancreatic cancer indication.

Merrimack also is eligible to receive $220 million in future development and regulatory milestone payments related to two additional indications. Merrimack has the potential to receive $250 million in sales milestone payments, as well as tiered royalties on net sales of MM-398 in the licensed geographies.

MM-398 is a novel encapsulation of irinotecan in a long-circulating nanoliposomal formulation designed to increase drug deposition and prolong cytotoxic effects, with the goal of improving its anti-cancer properties.

In May 2014, Merrimack announced that the phase III trial, known as NAPOLI-1, studying MM-398 in combination with 5-fluorouracil (5-FU) and leucovorin achieved its primary and secondary endpoints for patients with metastatic pancreatic cancer who were previously treated with a gemcitabine-based therapy. In the study, the combination of MM-398 with 5-FU and leucovorin demonstrated a statistically significant improvement in overall survival, progression free survival and overall response rate compared to the control arm of 5-FU and leucovorin alone. This was the first positive global phase III study in a post-gemcitabine setting to show a survival benefit in this aggressive disease.

The FDA and EMA have granted MM-398 Orphan Drug designation in metastatic pancreatic cancer. Merrimack is planning to submit a New Drug Application for MM-398 with the FDA in 2014. Baxter expects to submit for regulatory approvals outside of the U.S. beginning in 2015.