Big Pharma Collaboration Announced with Cocystal and Merck

Cocrystal Pharma (NASDAQ:COCP) and Merck (NYSE:MRK) have announced a new partnership that ignited investor attention in early trading on Thursday (January 3).

The agreement is for an exclusive worldwide license and collaboration agreement for Merck to discover and develop certain proprietary influenza A/B antiviral agents from Cocrystal.

Cocrystal’s share price was up 19.58 percent early trading on Thursday but settled with a 8.73 percent increase over the one-day trading period to US$4.11 at market close.

Merck will pay Cocrystal an undisclosed upfront sum and also fund research and development for the program. This includes clinical development and worldwide commercialization of any products derived from the collaboration.

Cocrystal is eligible to receive payments of up to US$156 million as well as royalties on product sales. These payments consist of designated development, regulatory and sales milestones.

Dr. Gary Wilcox, vice chairman and CEO of Cocrystal, said in the press release the combination of Merck’s resources and Cocrystal’s innovative platform will enable the company to “advance important new treatments for influenza.”

The company’s proprietary technology is a structure-based drug discovery strategy for viral replication inhibitors. It’s designed to develop small molecule therapeutics that are safe, effective and convenient to administer.

The technology offers a 3D structure of inhibitor complexes which guides researchers to a molecule’s novel binding sites. Cocystal has found this also permits the molecules to have a broad spectrum of antiviral activity. As a result, therapies developed may be effective against all sub, or genotypes of a specific virus.

Cocrystal’s chief scientist was awarded the 2006 Nobel Prize for Chemistry for his work to develop modes of this technology, such as the X-ray crystallography, according to the press release.

As for Cocrystal’s current pipeline, the company has two influenza programs: one in preclinical development is an influenza A PB2 inhibitor and the other an A/B inhibitor is still in discovery. Approved therapies for these influenza categories are partially effective and prone to viral resistance.

A and B influenzas are the most predominantly virus types in circulation in the world, according to the World Health Organization. These are mainly recognized as causing seasonal influenza viruses, while others include C and D viruses. During the 2017-2018 flu season, mortality rates sat at 10 percent for both pneumonia and influenza in the US, according to Centers for Disease Control and Prevention (CDC).

Other drug candidates in Cocrystal’s pipeline includes indications for Hepatitis C and Norovius. One Hep C program is the company’s most advanced drug in development in a Phase 2 trial. As this pipeline exemplifies, the company focuses on antiviral therapeutics based on its proprietary technology.

Merck is a big pharma known for its global blockbuster drugs in diabetes, cholesterol management and HIV infection among others. More recently, the company’s immuno-oncology drug Keytruda has been widely used in combination trials and collaborations.

Investors interested in this collaboration can follow both Merck and Cocrystal’s news for updates. Investors can also look forward to hearing about Cocrystal’s PB2 inhibitor which is scheduled to enter a Phase 1 trial in the first half of 2019.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.