By Scott Kanowsky
Investing.com -- Shares in Orion (HE:ORNBV) rose on Wednesday after the Finnish pharmaceutical company upgraded its annual outlook following a cancer drug manufacturing agreement with U.S. peer Merck & Company (NYSE:MRK).
In a statement, Orion said it now expects full-year operating profit and net sales to be "clearly higher" than in 2021. It previously said the results would be at similar levels to the prior year.
The raised guidance partly stems from an upfront payment of $290 million that Orion will receive under the terms of the deal, the firm added.
Orion will work with a subsidiary of Merck & Co that runs the drugmaker's business outside of the U.S. and Canada to develop a new prostate cancer treatment, known as ODM-208. The drug is currently in Phase 2 clinical trials.
“This agreement positions Orion to harness the potential of ODM-208 for the good of patients while continuing to invest in our other programs without compromising our financial targets,” said Orion president and CEO Timo Lappalainen.
Meanwhile, Merck said the partnership will enhance its existing prostate cancer drug portfolio.
The move comes as the New Jersey-based company has been looking to bolster its cancer treatments through a potential $40 billion merger with biotechnology firm Seagen (NASDAQ:SGEN), according to sources quoted by the Financial Times. Merck is aiming to reinforce its offerings before the patent of its crucial Keytruda cancer drug expires at the end of the decade, the FT reported.