According to the deal, Merck, through a subsidiary, and Pfizer will work on the development and marketing of ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin and Januvia (sitagliptin) tablets.
Januvia is used in addition to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus.
Pfizer Primary Care president and general manager John Young said, "Through this collaboration, we believe we can build on Merck’s leadership position in diabetes care with the introduction of ertugliflozin, an innovative SGLT2 inhibitor discovered by Pfizer scientists."
Existing portfolio of sitagliptin-containing products will be held by Merck, which made an upfront payment and milestones of $60m to Pfizer that is also eligible for additional pre-specified future clinical, regulatory and commercial milestones payments.
Potential revenues and certain costs will be shared by Merck and Pfizer on 3:2 ratio.
Merck Research Laboratories senior vice president and Diabetes and Endocrinology franchise head Nancy Thornberry said, "We believe ertugliflozin has the potential to complement our strong portfolio of investigational and marketed products, and we look forward to collaborating with Pfizer on its development."
Ertugliflozin, an oral sodium glucose cotransporter inhibitor, is Phase III ready, with trials scheduled to commence in 2013.