Sumitomo Pharmaceuticals Signs Agreement with Merck & Co., Inc. Forming Global Partnership for SM13496 , an Atypical Antipsychotic Compound

Business Wire, July 5, 2005

TOKYO & WHITEHOUSE STATION, N.J. -- Sumitomo Pharmaceuticals Co., Ltd. and Merck & Co., Inc. today announced that they have signed an agreement to collaborate on SM13496 (lurasidone), an atypical antipsychotic compound currently in Phase II development for the treatment of schizophrenia, one of the most chronic and disabling of the severe mental illnesses. Under the agreement, Sumitomo has granted Merck, through an affiliate, an exclusive license for SM13496 in all parts of the world except for Japan, China, Korea and Taiwan.

"Sumitomo has an outstanding record in Japan for discovering and developing innovative medicines that address serious diseases," said David W. Anstice, president of Human Health for Merck, whose responsibilities include Japan. "Merck is committed to our partnership with Sumitomo and to bringing the benefits of their research to doctors and patients around the world."

Under the terms of the agreement, Sumitomo will receive an initial payment and milestone payments in addition to royalties on net sales and retain the option to co-promote SM13496 in the United States. Additional financial terms were not disclosed.

"We believe SM13496 has the potential to be a new therapeutic option for physicians in the treatment of schizophrenia, one of the world's most disabling severe mental illnesses," said Dr. Peter S. Kim, president of Merck Research Laboratories.

There is a large and urgent need for new medicines to treat mental illnesses. An estimated 450 million people worldwide suffer from mental illnesses, according to the National Institute of Mental Health (NIMH). The NIMH estimates that two million Americans suffer from schizophrenia. Existing drugs frequently are not fully efficacious at relieving symptoms of the disease or have unacceptable side effects, leading many of these patients to stop taking their medicines. In the United States, direct and indirect costs of mental illness are estimated at more than $150 billion annually, with more than three million people receiving disability benefits due to mental disorders, according to the NIMH.

"We are delighted about this agreement with Merck, which has the potential to expedite the development and commercialization of this promising compound," said Yasuo Okamoto, president of Sumitomo Pharmaceuticals. "We have chosen to work with Merck, a global leader in clinical development and marketing of innovative drugs, both as a means of maximizing the potential of SM13496 and because we believe this partnership will provide us with opportunities to reinforce our operations in the United States."

SM13496 is a D-2 antagonist /5HT-2A antagonist (atypical antipsychotic). In early clinical trials conducted to date by Sumitomo, SM13496 has demonstrated antipsychotic efficacy and appears to be generally well tolerated relative to existing antipsychotics.

"Merck is delighted about the opportunity to partner with Sumitomo in this important therapeutic area," said Dr. Merv Turner, senior vice president of Worldwide Licensing and External Research at Merck Research Laboratories. "Our agreement with Sumitomo is another example of Merck's alliance strategy of pursuing and integrating scientific excellence from the outside world."

About Merck

Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated to putting patients first. Established in 1891, Merck discovers, develops, manufactures and markets vaccines and medicines in more than 20 therapeutic categories. The company devotes extensive efforts to increase access to medicines through far-reaching programs that not only donate Merck medicines but help deliver them to the people who need them. Merck also publishes unbiased health information as a not-for-profit service. For more information, visit www.merck.com.

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