Merck Serono will fund a research group at Ablynx focused on discovering and developing the latter’s Nanobodies®—therapeutic proteins based on single-domain antibody fragments—against multiple targets in the former’s core therapeutic areas.

The new research alliance will net Ablynx €25 million ($33.7 million) in research funding from Merck Serono over its four-year term, including an up-front payment of €11.5 million ($15.5 million). The companies have the option to renew their alliance by two and a half years.

The Merck Serono funding is intended to ensure that the companies can generate at least six research programs with proof-of-principle in a relevant animal model.

Depending on the successful achievement of in vivo proof-of-principle, Merck Serono said it will commit to taking at least four of the programs forward with Ablynx through co-discovery and co-development arrangements.

The research group will focus on discovery and development of Nanobodies spanning all Merck Serono’s core R&D areas, including oncology, immuno-oncology, immunology, and neurology.

“The new alliance is an early-stage discovery initiative, which allows the companies to rapidly explore the potential of novel targets across a range of therapeutic areas and to determine which programs should be prioritized for later-stage development,” Edwin Moses, Ph.D., Ablynx’s chairman and CEO, said in a statement. “It is a very interesting model that could create substantial value for both parties and one which we believe could be applicable for us in other partnerships.”

The new alliance extends a collaboration between the companies launched in 2008, with an initial focus on two targets in oncology and immunology. A second contract in 2010 launched a new program for an inflammatory diseases target. A year later, Ablynx and Merck Serono expanded their collaboration again to co-discover and co-develop Nanobodies against two targets in osteoarthritis.

In June, Merck Serono dosed the first healthy volunteers as the companies advanced a compound from their collaboration—the Nanobody ALX-0761 for inflammatory diseases—to a Phase I clinical study. The start of the Phase I study resulted in a €2.5 million (about $3.4 million) milestone payment to Ablynx by Merck Serono. Ablynx is also eligible for additional development milestone payments tied to the progress of the product in multiple indications, as well as regulatory and commercial milestones, plus tiered royalties upon product approval.

Our common goal is to develop novel biologics with a high degree of differentiation for high-value therapeutic targets,” said Bernhard Kirschbaum, Ph.D., evp and head of global research and early development at Merck Serono and a member of the company’s Executive Board.

The expansion of the Merck Serono partnership is the second deal announced by Ablynx this week. On Monday, it joined AbbVie in announcing the companies will further develop and commercialize another Ablynx nanobody—ALX-0061, which targets the interleukin-6 (IL-6) pathway—into a therapy for inflammatory diseases, in a collaboration that could net Ablynx as much as $840 million.

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