Saabira Chaudhuri
Bionomics Ltd. (BNO.AU) has struck a deal of up to $172 million
with Merck & Co. (MRK) to discover and develop novel small
molecule candidates for the treatment of chronic pain, including
neuropathic pain.
Under the terms of the agreement Merck, known as MSD outside the
U.S. and Canada, will have the option to exclusively license a
compound from Bionomics for development and commercialization.
In return, the Australian-based biotechnology company may
receive option exercise fees and development and regulatory
milestone payments of up to $172 million.
The companies said that Bionomics may also be eligible for
undisclosed royalties on net sales of products from the
collaboration. The Australia-based firm retains the right to
develop and commercialize certain compounds for which Merck doesn't
exercise its option.
The initial period of the research program will be two
years.
Bionomics plans to use its ionX drug discovery platform and
MultiCore chemistry to identify potential drug candidates.
According to data cited by Bionomics, the global pain treatment
market logged sales of $22 billion in 2010. However this is
expected to shrink to $18.7 billion by 2016 in the face of patent
expirations. Within the global pain market the neuropathic pain
market is expected to grow from $2.4 billion in 2010 to reach $3.6
billion by 2020.
Merck, like its competitors, has been grappling with the loss of
exclusivity for blockbuster drugs and is seeking to bring new drugs
to market that would help offset some of the sales pressure.
On Tuesday, Merck reported that its second-quarter earnings fell
49% as the company's pharmaceutical sales again were hurt by the
loss of market exclusivity of allergy and asthma drug
Singulair.
Shares of Merck closed Tuesday at $48.05 and were inactive
premarket. The stock has risen 8.8% in the past 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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