Merck Shelves Two Drug Candidates With Sichuan Kelun

(Bloomberg) — Merck & Co. won’t continue with two drug candidates it previously agreed to co-develop with a Chinese biotech after clinching a pact with Japan’s Daiichi Sankyo Co., dealing a fresh blow to companies in China seeking to prove their chops in developing innovative cancer therapies.

Merck gave formal notice Saturday of its decision not to develop two antibody-drug conjugates yet to start clinical trials, Sichuan Kelun Pharmaceutical Co. said Monday in a stock filing. The U.S. pharma giant last week secured rights to three similar drug candidates from Daiichi Sankyo in a deal valued at as much as $22 billion.