Amrad nets second Merck milestone payment

Amrad (ASX:AML) has received a second US$3 million milestone payment from Merck, Sharp and Dohme (MSD), bringing the total payments to the company under the terms of the agreement to $11 million to date out of a possible $112 million.

The milestone payment comes just three months after the first payment, also for US$3 million, was made.

"We're very pleased -- it's a clear indication that we're making progress," said Amrad chairman Bob Moses.

Amrad CEO Pete Smith said the milestone payment demonstrated Amrad's expertise and capacity to deliver key outcomes crucial to the drug development process.

MSD and Amrad are collaborating on the development of asthma therapies based on Amrad's IL-13R target. Under the terms of the agreement between the two companies, MSD will take sole responsibility for clinical development and marketing activities once the pre-clinical development is complete.

Moses said the project was moving fairly rapidly toward the clinic, although he would not comment on the potential for more milestone payments in the near future. "The timing [of milestone payments] is difficult to predict, but there is agreement for payments both before and after clinical trials start," he said.

Moses said he hoped that news of the payment would help the market to appreciate the changes wrought by Amrad over the past couple of years, which have seen the company change both its board composition and CEO, and streamline its R&D strategy. "Certainly in 2004 it's a much different company to what it was two years ago," he said.

Moses said that Amrad would be considerably buoyed by regular revenues from milestone payments from its two major partners MSD and Serono. At the time of writing, Amrad's share price remained unchanged at AUD$0.69.