Merck/NicOx: More Reinvention Rather Than Innovation

Big pharma, in the shape of Merck & Co, has once again dipped its hand into the biopharma goody bag to bolster R&D pipelines. The deal, potentially worth around $350 million to NicOx, comes only days after NicOx inked a similar sized deal with Pfizer in ophthalmology, and should help boost Merck’s lifecycle management efforts.

In less than a month, French biopharma outfit NicOx has inked deals potentially worth over $730 million with Merck & Co in the cardiovascular field and Pfizer in the area of ophthalmology. While good news for NicOx, both deals highlight the continuing trend of leading pharmaceutical groups looking externally, rather than internally, for innovative solutions to R&D productivity issues.

However, although the deal with Pfizer promises innovation in the form of new drugs for difficult-to-treat eye diseases, NicOx’ agreement with Merck & Co is simply a lifecycle management strategy.

Under the terms of the deal, Merck will gain access to NicOx’ nitric oxide (NO) donating technology in an effort to improve currently available, and as yet unspecified, treatments for hypertension; a simple case of reinvention rather than innovation.

Notwithstanding the lack of innovation, the antihypertensive market was worth $33.1 billion in 2004, with Merck’s flagship antihypertensive Cozaar (losartan) commanding 7% with sales of $2.4 billion. With losartan coming off patent in 2009, it is unsurprising, therefore, that Merck is investing in such a lucrative market, a market it has extensive experience in, and one that is forecast to grow to over $50 billion by 2015.

Moreover, with issues of poor disease control and patient compliance still dogging the treatment of hypertension, small improvements in old treatments could have a huge impact on long-term mortality in hypertensive patients.

While speculation surrounds the drug class Merck is focused on, it seems most likely that NicOx’ technology will be used to reformulate losartan in an effort to extend the lifecycle of this product and soften the blow of generic competition expected in 2009/10. As a strategy, this has been shown to work for many other products. Ultimately, however, it drives another nail in the coffin of innovation.