Merck KGaA’s (MKGAF) allergy business unit, Allergopharma, has signed an exclusive licensing agreement with S-TARget therapeutics for developing a new generation of therapies for the causal treatment of allergies (caused by significant allergens such as dust mites and pollen) using the latter’s S-TIR technology.

Terms of the Deal

Under this deal, Merck KGaA has gained worldwide rights for the development and marketing of products developed using the S-TIR technology platform. Merck KGaA intends to invest heavily in R&D for the development of specific allergy therapeutics. The details of the deal were not disclosed.

According to the press release issued by Merck KGaA, the market for allergy therapeutics (without symptomatic drugs) is growing globally. Given the rising number of patients suffering from allergies, there is an urgent need for new therapies in this field.

Some approved drugs for the treatment of allergy include Ragwitek (short ragweed pollen-induced allergic rhinitis with or without conjunctivitis) and Oralair (grass pollen-induced allergic rhinitis with or without conjunctivitis).

Our Take

We are positive on Merck KGaA’s agreement with S-TARget. S-TARget’s S-TIR technology will help Merck KGaA, which is currently focusing on innovating the next generation of allergy therapy, to strengthen its allergy pipeline. Given that Merck KGaA already occupies the foremost position in the world in the development of recombinant allergens (biotechnologically manufactured allergens), the exclusive license on S-TIR technology will further boost the company’s opportunities in this field.

Merck KGaA carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharmaceutical sector are Allergan Inc. (AGN), Mallinckrodt plc (MNK) and Endo International plc (ENDP). All these stocks carry a Zacks Rank #1 (Strong Buy).

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