Merck & Co links up with Lycera in $300 million deal for autoimmune disease drugs

Pharma giant Merck & Co (NYSE: MRK) has signed a deal with fellow USA-based drug start-up Lycera Corp to discover, develop and commercialize small molecules that target T-helper 17 (Th17) cells, key mediators of inflammation. The collaboration will focus on developing drug candidates that have the potential to treat major autoimmune diseases such as rheumatoid arthritis, psoriasis, inflammatory bowel disease and multiple sclerosis and could earn Lycera more than $300 million.

Under the terms of the accord, Lycera will receive $12 million in upfront cash, significant committed research funding and is eligible to receive up to $295 million in research, development and regulatory milestone payments if multiple major indications are approved. Lycera is also entitled to up to low double digit tiered royalty payments and sales milestones on global sales from any products that are developed as a result of the collaboration.

“We are delighted to be working with Merck, which brings industry leading expertise in drug discovery, development and commercialization to this collaboration,” said Gary Glick, founder and chief scientific officer of Lycera, which has been without a chief executive since last fall when incumbent Bill Sibold quit. “This joint partnership is a significant validation of Lycera’s discovery capabilities and our Th17 program, and enables us to expand the scope of our research in this promising area to expedite our discovery efforts as well as our timeline to enter the clinic.”