Merck discontinues some cancer drug development with China's Sichuan Kelun

By Andrew Silver

SHANGHAI, Oct 23 (Reuters) - Chinese drugmaker Sichuan Kelun Pharmaceutical Co said on Monday that Merck & Co Inc was abandoning the joint development of two candidate cancer drugs which have yet to start clinical trials.

Shares of Shenzhen-listed Kelun closed down 7%, the lowest level since December 2022.

Representatives for Merck did not immediately respond to a Reuters request for comment.

The move comes days after Merck said it would pay Daiichi Sankyo $5.5 billion to jointly develop three of its candidate cancer drugs in a deal that could be worth up to $22 billion for the Japanese firm.

Merck is aiming for at least $6 billion in revenue from its oncology business in the fiscal year ending March 31, 2026, which would represent about a five-fold increase over a three-year period.

The co-developed drug candidates belonged to a class known as antibody drug conjugates (ADC), which unlike conventional chemotherapy are designed to target only cancer cells, potentially reducing damage to normal cells.

Cooperation with Merck on seven other ADC candidates - three in clinical trials - was unaffected, Kelun said.

(Reporting by Andrew Silver; Editing by Anne Marie Roantree and Miral Fahmy)