Merck Serono has expanded its partnership with Ablynx, entering a third agreement to discover and develop Nanobodies against two osteoarthritis targets. The companies will utilize the unique Nanobody features to develop multi-specific products with extended half-lives.

Ablynx will receive an upfront payment of $27 million and will be responsible for all activities and costs for each program, excluding manufacturing costs and costs for certain in vivo models, up to the delivery of the preclinical package for an IND filing or IND equivalent. Ablynx is entitled to receive an additional $20 million for each program if the preclinical packages are accepted by Merck Serono. Ablynx then has the option to continue co-development and share profits, or to convert the collaboration into an exclusive, worldwide licensing deal with milestone payments and royalties.

“We are pleased with the progress we have made to date in our existing collaborations with Ablynx, and we look forward to further developing our productive relationship,” said Dr. Bernhard Kirschbaum, 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. We believe that the specific features of the Nanobodies have the potential to address key challenges in the treatment of osteoarthritis.”

Dr. Edwin Moses, chairman and chief executive officer of Ablynx, said, “We are very pleased to have entered into a third agreement with Merck Serono a year after entering into our second collaboration. Merck Serono is one of our most valued partners and the innovative and creative deal structure that we have put in place represents a “win-win” for both parties. Such new deals with an existing partner are clear signs of success of the earlier programs in the partnership and reflect well on the strength of our Nanobody platform and the potential drug products it can create.”