Orion Corporation (?Orion?) and MSD (Merck & Co., Inc., Rahway, NJ, USA) announced that notice has been provided of the mutual exercise of an option to convert the companies? ongoing co-development and co-commercialization agreement for opevesostat (MK-5684/ODM-208), an investigational CYP11A1 inhibitor, and other candidates targeting CYP11A1 into an exclusive global license for MSD. As previously announced, under the companies?

original co-development and co-commercialisation agreement each party was granted an option to convert the co-exclusive license into an exclusive global license for MSD. With the exercise of the option, MSD will gain global exclusive rights to develop and commercialise opevesostat and other candidates targeting CYP11A1 covered by the agreement. Under the terms of the agreement, Orion is now eligible to receive development milestone payments up to USD 30 million, regulatory milestone payments up to USD 625 million and sales-based milestone payments up to USD 975 million as well as annually tiered royalty payments ranging from a low double-digit rate up to a rate in the low twenties on net sales for any commercialised licensed product.

The development and regulatory milestones are determined by the scope of a number of treatment indications and multiple geographies. Annual sales exceeding several billion US dollars would be required to reach the total amount of the sales milestones and higher-end of the royalty rate. In addition, as a result of the exercise of the option, MSD will now assume full responsibility for all past and future development and commercialisation expenses associated with the candidates covered by the agreement.

As a result of the option exercise and MSD?s assumption of expenses, Orion announced it will release EUR 60 million that was reserved in July 2022 to cover Orion?s share of development cost to be accrued from the balance sheet to net sales and operating profit in Third Quarter 2024. Orion will retain responsibility for the manufacture of clinical and commercial supply for MSD. No payment is associated with the exercise of this option.

The exclusive global license is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions, and is expected to become effective in the third quarter of 2024.