ARIAD and Merck entered into the ridaforolimus collaboration in July 2007 and worked together to develop ridaforolimus in multiple potential cancer indications. At the start of the collaboration, Merck made a $75 million upfront payment to ARIAD and after that paid ARIAD $53.5 million in milestone payments for the initiation of Phase 2 and Phase 3 clinical trials of ridaforolimus, in addition to paying its 50 percent share of ridaforolimus development, manufacturing and commercialization costs.
In May 2010, ARIAD and Merck announced the restructuring of the partnership. Under this new collaboration framework, ARIAD granted Merck an exclusive license to develop, manufacture and commercialize ridaforolimus in oncology, and Merck has assumed responsibility for ridaforolimus activities, including clinical trials and regulatory filings. ARIAD received a $50 million upfront cash payment, as well as approximately $19 million in cash to retroactively fund the cost of ridaforolimus development from January through April 2010. Merck will now fund 100 percent of ridaforolimus development, manufacturing and commercialization costs and ARIAD is eligible to receive regulatory and sales milestones and tiered double-digit royalties on global sales of ridaforolimus.
These global royalty rates are approximately one-third greater than the royalty rates that ARIAD would have received for ex-U.S. sales under the original collaboration agreement with Merck. ARIAD also has accepted its option to co-promote ridaforolimus with up to 20 percent of the sales effort for the product in all cancer indications in the United States, and Merck will compensate ARIAD for its ridaforolimus sales efforts.
In January 2011, the companies announced that the Phase 3 SUCCEED trial met its primary endpoint—statistically significant improvement of progression-free survival (PFS)—in patients with metastatic softtissue and bone sarcomas who have had a favorable response to chemotherapy.