Amrad in research collaboration with Merck Sharp & Dohme

Melbourne biotechnology company Amrad has formed a research collaboration with Merck Sharp & Dohme (MSD) with a total worth of $US112 million plus royalties to develop therapeutic drugs for asthma, respiratory diseases and cancer, the company announced today at the BIO2003 conference in Washington DC.

Under terms of the exclusive licensing and research collaboration agreement, Amrad will receive an upfront payment of $US5 million. Successful development of products for all indications would bring payments of up to $US112 million, as well as royalties. The two companies will collaborate on the development of drug candidates over the next few years, while MSD will take responsibility for clinical development and responsibility.

Among the projects targeted by the collaboration is the development of interleukin 13 receptor antagonists for the treatment of asthma and allergies, which was recently highlighted by the company as one of five flagship projects.

"We are delighted to enter this collaboration with Merck as its strong skills in development and marketing make Merck an ideal partner. More importantly, we believe that by collaborating with Merck we can accelerate the preclinical investigation and clinical development of drugs based on this exciting target," said Dr Sandra Webb, Amrad's managing director.

The projects covered by the agreement have grown out of Amrad's involvement with the CRC for Cellular Growth Factors over the last three years. The company is the commercial partner in the CRC, which includes the Walter and Eliza Hall Institute, the Ludwig Institute for Cancer Research and CSIRO Health Sciences and Nutrition. Webb said it confirmed both the excellence of the research at the CRC and WEHI, as well as the ability of Amrad to extend and commercialise that research.

According to MSD's Australian managing director Will Delaat, the collaboration highlights the value of Australian biotechnology companies partnering with global pharmaceutical companies to commercialise their products. Amrad has partnered with Merck in the past in a joint venture, Amrad Pharmaceuticals, which was sold to MSD in September 2000.

"This latest collaboration demonstrates our commitment to Australian R&D, and to developing local discoveries for the benefit of patients globally," Delaat said.

At the time of writing, Amrad's share price (ASX: AML) had risen 34 per cent to $AUD0.63.