Ablynx Gets €20M from Merck Serono to Expand Collaboration Into Osteoarthritis

Ablynx stands to earn a further €15 million for each IND-stage program accepted by Merck.

Merck Serono will pay Ablynx €20 million up front in a joint discovery and development deal covering two targets in osteoarthritis. Ablynx could receive another €15 million for each program accepted by Merck after the preclinical stage.

Under terms of the agreement, Ablynx will receive its up-front fee in two tranches over the next three months. The firm will be fully responsible for all activities and costs for each program, excluding manufacturing costs and costs relating to certain in vivo models, up to the delivery of the preclinical package that will form the basis of an IND or equivalent filing.

For programs that Merck Serono does take over, Ablynx has the option to continue with Merck Serono on a 50:50 co-development basis and share the resulting profits or to convert this collaboration into an exclusive, worldwide licensing deal with milestone payments and tiered royalties.

The companies will exploit Ablynx’ Nanobody platform to develop multispecific products with extended half-lives. Merck Serono has inked two previous deals with Ablynx for Nanobody development. In September 2008, they signed an agreement covering two disease targets in oncology and immunology. In October 2010, the firms expanded their arrangement to include an inflammatory disease target.

“We are pleased with the progress we have made to date in our existing collaborations with Ablynx,” said Bernhard Kirschbaum, Ph.D., head of global discovery and early development at Merck Serono. “We are impressed by the speed with which Ablynx has progressed in our ongoing programs, and we believe they could become a valuable source of new drug candidates for Merck Serono.”

Merck Serono paid Ablynx €10 million up front in the cancer/immunology deal and another €10 million up front for the inflammatory disease agreement. In the cancer/immunology collaboration, total development and commercial milestones could reach up to $469 million should a product be approved in multiple indications in all major markets. The companies share R&D costs, but should Ablynx contribute equally to each program, it will be eligible to receive 50% of the resulting profits.

The inflammatory disease partnership is set up more like today’s osteoarthritis arrangement. Ablynx is responsible for all activities and costs, excluding manufacturing costs, up to the completion of IND-enabling studies. Upon acceptance of the preclinical package by Merck Serono, Ablynx will be eligible for a €15 million milestone payment. Ablynx has the option to continue with up to a 50:50 co-development basis and share the resulting profits or to convert this collaboration into an exclusive, worldwide licensing deal.

Nanobodies are antibody-derived therapeutic proteins that contain the structural and functional properties of naturally occurring heavy-chain antibodies. The Nanobody technology was originally developed following the discovery that camelidae (camels and llamas) possess fully functional antibodies that lack light chains. These heavy-chain antibodies contain a single variable domain (VHH) and two constant domains (CH2 and CH3).

Importantly, the cloned and isolated VHH domain is a perfectly stable polypeptide harboring the full antigen-binding capacity of the original heavy-chain antibody. These newly discovered VHH domains form the basis of Ablynx’ Nanobodies.