Merck has formed a broad collaboration with Idera Pharmaceuticals to research, develop and commercialize Idera’s Toll-like Receptor (TLR) agonists by incorporating them in therapeutic and prophylactic vaccines being developed by Merck for oncology, infectious diseases and Alzheimer’s disease.

“Our collaboration with Idera is part of Merck’s long-standing commitment to research and develop novel vaccines and medicines that can improve human health,” said Peter S. Kim, Ph.D., president, Merck Research Laboratories. “We believe that vaccines combined with TLR-targeted compounds offer great promise in treating and preventing serious diseases, and look forward to integrating Idera’s TLR agonists into our vaccine development programs.”

Under the terms of the agreement, Merck will receive worldwide exclusive rights to a number of Idera’s agonist compounds targeting TLR 7, 8 and 9 for use in combination with Merck’s therapeutic and prophylactic vaccines under development for oncology, infectious diseases and Alzheimer’s disease. Merck and Idera will engage in a two-year R&D collaboration to generate novel agonists targeting TLR 7 and TLR 8 and incorporating both Merck and Idera chemistry for use in the licensed fields.

Merck has agreed to pay an upfront license fee of $20 million to Idera and to purchase $10 million of its common stock at $5.50 per share. In addition, Merck will fund the R&D collaboration. Idera is eligible to receive milestone payments of as much as $165 million if vaccines are successfully developed in each of the three fields. Additional milestones of as much as $260 million would be payable for follow-on indications in the oncology field and the successful development of additional vaccines containing Idera’s TLR agonists. There is no limit to the number of vaccines to which Merck can apply Idera’s agonists within the licensed fields. In addition, Idera will receive royalties on products commercialized under the collaboration.