Under the terms of the agreement, Merck will acquire 100 percent of the equity of Aton and Aton will become a wholly owned subsidiary of Merck. Consideration for the acquisition will consist of upfront and contingent payments based upon the regulatory filing, approval and sale of products. Additional financial details were not disclosed.
Aton, which was founded in 2001 and is located in Tarrytown, N.Y., has been focused on the identification and development of small molecule inhibitors of chromatin-modifying enzymes. The company's clinical pipeline of histone deacetylase (HDAC) inhibitors represents a promising class of anti-tumor agents with a novel mechanism of action.
Aton's lead product candidate, known as suberoylanilide hydroxamic acid (SAHA), has been studied in Phase I clinical trials in cancer patients and is currently in Phase II clinical trials for the treatment of cutaneous T-cell lymphoma (CTCL). CTCL is a slow growing form of cancer in which some of the body's white blood cells - known as T-lymphocytes or T-cells - become malignant. Normal T-cells function by regulating the body's immune system in its job of fighting infections and other harmful things in the body. In CTCL, the malignant T-cells are drawn to the skin, where some are deposited. Patients usually develop CTCL after age 50.
SAHA is also being studied for the treatment of patients with other types of cancer, including leukemia (cancer of the blood or blood-forming organs), multiple myeloma (cancer formed by cancerous plasma cells in the blood), and solid tumors, such as breast and colorectal cancer. Results from Phase I trials showed that SAHA has excellent oral bioavailability and can inhibit its target enzyme, HDAC, at doses that have been generally well tolerated by patients in clinical trials to date. Bioavailability is the degree of drug absorption through oral administration.
"We are delighted about our agreement to acquire Aton Pharma, a company that has in a few short years earned a reputation for expertise in cancer research," said Stephen H. Friend, M.D., Ph.D., senior vice president for Molecular Profiling and Basic Cancer Research at Merck Research Laboratories. "Our acquisition of Aton will significantly enhance Merck's internal research efforts to develop potential new medicines for the treatment of cancer, which is the second leading cause of death in the United States and in much of the world."
According to the American Cancer Society (ACS), cancer is second only to heart disease as a leading cause of death in the United States. Half of all men and one-third of all women in the United States will develop cancer during their lifetimes. In 2001, cancer was responsible for the deaths of 1 in 5 Americans. This year, the ACS estimates that more than 563,000 Americans will die from different cancers. Half of all cancer deaths in the United States are attributable to breast, lung, colorectal and prostate cancers, according to the ACS.
"Merck is pleased to have the opportunity to develop the compounds in the Aton pipeline and bring forward potential new treatments for cancer patients," said Mervyn Turner, Ph.D., senior vice president of Worldwide Licensing and External Research at Merck Research Laboratories. "Partnering with the best of biotechnology is a core goal for Merck, and our acquisition of Aton fits well with this strategy."
Richard N. Kender, vice president of Business Development and Corporate Licensing at Merck, called the acquisition of Aton the latest example of Merck's strategy of making targeted acquisitions of biotechnology companies that complement the company's internal research capabilities. "Aton is an excellent acquisition candidate because of the synergies it provides with the cutting-edge technology we gained through our acquisition of Rosetta Inpharmatics," Kender said.
"We are excited to see our team and our product pipeline become part of the superb scientific environment of Merck," said Nicholas G. Bacopoulos, Ph.D., president and CEO of Aton Pharma. "Aton has demonstrated the anti-tumor potential of SAHA in clinical trials to date and we are hopeful that the Merck and Aton teams together can expedite the development and approval of this novel agent, successfully fulfilling the goals of our founders and shareholders."
Paul Marks, M.D., one of the co-founders of Aton Pharma and President Emeritus of Memorial Sloan-Kettering Cancer Center, added, "The other co-founders and I are delighted with the Merck transaction. Merck gives us the best opportunity to see our drugs for the treatment of cancer reach the marketplace. That has always been our most important goal."
The acquisition is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. The two companies expect to complete the acquisition in the first quarter of 2004.
About Aton Pharma, Inc.
Aton Pharma, Inc. is a privately held biopharmaceuticals company that was founded in 2001 by a group of leading cancer investigators to develop and commercialize novel therapeutics for cancer and other diseases that were discovered in the respective laboratories of co-founders Ronald Breslow, Ph.D. and Paul A. Marks, M.D. at Columbia University and Memorial Sloan Kettering Cancer Center. The company is engaged in the discovery and development of innovative therapeutics, in the emerging field of chromatin science, for cancer and other diseases with an unmet medical need.
About Merck & Co., Inc.
Merck & Co., Inc. is a global research-driven pharmaceutical products company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures.
Merck Forward-Looking Statement
This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements include statements regarding product development. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the cautionary statements in Item 1 of Merck's Form 10-K for the year ended Dec. 31, 2002, and in its periodic reports on Form 10-Q and Form 8-K (if any) which we incorporate by reference. Copies of these forms are available on request to Merck's Office of Stockholder Services.