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Merck KGaA-CBRX Renew Agreement

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Merck KGaA (MKGAY) and Columbia Laboratories, Inc. (CBRX) recently renewed a license and supply agreement for Crinone (progesterone gel), extending it for an additional five years. This agreement dates back to 1999. On May 18, 2010, the agreement between the two parties was renewed for a five-year term and was to expire in May 2015. Subsequent to the recent agreement, the term will extend to May 2020.

Columbia Labs’ Crinone is a vaginal progesterone gel which utilizes the company’s proprietary sustained-release bioadhesive technology. The product is currently approved in more than 60 countries. US Food and Drug Administration (:FDA) approval was received in May 1997. Merck KGaA’s division Merck Serono has global marketing authorizations for Crinone in all countries excluding the US. Crinone faces competition from marketed products like Prometrium and Endometrin.

We note that Merck KGaA recently entered into two collaborations in March. Firstly, Merck KGaA announced a strategic deal with Nordic Bioscience Clinical Development A/S for Merck KGaA’s pipeline candidate, sprifermin (recombinant human FGF-18). Sprifermin is being developed for osteoarthritis (:OA) of the knee. Secondly, the company announced a deal with Bristol-Myers Squibb (BMY) for the promotion of different formulations of Glucophage (metformin hydrochloride) in China. Glucophage is used for the treatment of type II diabetes particularly in overweight patients when diet and exercise alone have failed. As per the agreement, Merck KGaA and Bristol-Myers will co-promote the drug in China and share profits.

Merck KGaA carries a Zacks Rank #3 (Hold). Currently, QLT Inc. (QLTI) looks more attractive with a Zacks Rank #1 (Strong Buy).

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