Ambrilia Biopharma Inc., a biopharmaceutical company, and Merck and Co., Inc., announced that Ambrilia has entered into an exclusive licensing agreement granting Merck through an affiliate the worldwide rights to Ambrilia's HIV/AIDS protease inhibitor (PI) programme.

Under the terms of this agreement, Ambrilia grants Merck the exclusive worldwide rights to its lead compound, PPL-100, which has completed a phase I single-dose pharmacokinetic study and is currently in a phase I repeat dose pharmacokinetic study. In return Ambrilia receives an upfront licensing fee of $US 17 million on signing and is eligible for cash payments totaling up to $US 215 million upon successful completion of development, clinical, regulatory and sales milestones, and royalties on all future product sales. The first of the milestone payments ($US 3 million) will be based on the successful completion of a phase I repeat dose pharmacokinetic study, the results of which are expected in late November. Once the phase I repeat dose pharmacokinetic study is completed, Merck will assume all subsequent development costs related to PPL-100.

Ambrilia also stands to receive significant additional milestone-based cash payments and royalties on the future development and commercialization of each back-up compound and related compounds developed by Merck and which fall within the scope of the Ambrilia PI program.

"We are very pleased to partner on PPL-100 with Merck, a company that has been a leader in anti-HIV drug development, and are confident that Merck will successfully advance the development of PPL-100," said Hans J. Mader, President and chief executive officer of Ambrilia. "This agreement is a significant milestone for Ambrilia; an influx of potentially over $CDN 22 million in 2006 allows the Company to be much stronger financially and provides us with the opportunity to allocate the necessary resources to further progress the development of our other technologies and product candidates."

"Merck has been a world leader in the fight against HIV/AIDS for two decades, and this agreement is a further demonstration of our continuing commitment to this field of medicine," said Merv Turner, Ph.D., senior vice president, Worldwide Licensing and External Research. "PPL-100 and Ambrilia's Protease Inhibitor Program represent a potentially significant advancement for patients and physicians in the treatment of HIV/AIDS."

Protease Inhibitors (PIs) are a key component to the current HIV standard of care, the Highly Active Anti-Retroviral Treatment (HAART) consisting of a cocktail of HIV medicines. Unfortunately, many PIs are associated with side effects, a high pill burden and, as it is the case with all anti-HIV drugs, the development of viral resistance. In addition, the majority of PIs are administered in combination with a small dose of ritonavir, another protease inhibitor that is often used to increase, or boost, the amount of available drug in the system, but which also has the potential to increase adverse events. more than ever, there is a pressing need for better tolerated, more convenient and effective PIs.