Idera Pharmaceuticals, Inc. said it has entered into a worldwide licensing and collaboration agreement with Merck KGaA for research, development and commercialisation of Idera's Toll-like Receptor 9 (TLR9) agonists for the treatment of cancer.

Under the terms of the agreement, Merck KGaA has agreed to pay an upfront license fee of $40 million (about EUR 28 million based on current exchange rates) to Idera. In addition, Idera is eligible to receive milestone payments of up to $381 million, based on current exchange rates, (EUR 264 million), depending on success in achieving clinical development and commercialisation, as well as royalties on sales of any products developed and commercialised by Merck KGaA using IMO-2055, IMO-2125 or the follow-on TLR9 agonists. The contract will take effect and the upfront fee will be paid following, and subject to, regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Idera has agreed to exclusively license the therapeutic oncology applications, excluding cancer vaccines, of its lead TLR9 agonists, IMO-2055 and IMO-2125. In addition, Idera and Merck KGaA have agreed to engage in a research collaboration to identify a specified number of novel, follow-on TLR9 agonists, which will be derived using Idera's chemistry-based approach and for which Merck will have the exclusive right to use in oncology applications other than cancer vaccines.

"Merck is committed to the development of innovative approaches to cancer therapy on a global basis and we expect that this collaboration with Idera will help us move toward that goal," said Vincent Aurentz, executive board member and head, Portfolio Management and Business Development, Merck Serono. "We believe that TLR9 agonists represent a novel mechanism of action with great potential and we look forward to advancing their development for various oncology indications."

"Idera has chosen to collaborate with Merck KGaA for the application of our TLR9 agonists in oncology because of its proven capabilities and success in developing novel therapies for cancer and their commitment to global research, development and commercialisation in this area," said Sudhir Agrawal, D. Phil., chief executive officer and chief scientific officer, Idera. "This collaboration adds Merck KGaA's experience and resources to the development of our TLR9 agonists in oncology and provides us with additional capital to advance our internal TLR-targeted drug discovery and development programs. We look forward to working closely with Merck KGaA to realize the potential of TLR9 agonists in cancer therapy."

IMO-2055 is a novel DNA-based agonist of TLR9. IMO-2055 has been evaluated at multiple-dose levels for safety and immunological activity in Phase 1 trials involving healthy volunteers and patients with refractory solid tumours. IMO-2055 is currently in a phase 1b trial in combination with Tarceva and Avastin in patients with advanced non-small cell lung cancer and is being evaluated at two dose levels in a phase 2a trial in patients with renal cell carcinoma. IMO-2055 also is being evaluated in combination with chemotherapy agents in a phase 1 trial in patients with refractory solid tumours.

IMO-2125 is a second DNA-based TLR9 agonist and is of a class designed to induce high levels of interferon-alpha and other cytokines and chemokines. IMO-2125 presently is being evaluated in a phase I trial in patients with chronic hepatitis C virus infection who have not responded to standard treatment. This indication is not included in the agreement with Merck KGaA.

Toll-like Receptors (TLRs) function in human immune cells as the sensors of pathogens. They recognize different microbial products present in pathogens such as bacteria, viruses and parasites, and mount an appropriate immune response against the foreign invaders. TLRs have also been shown to recognize endogenous ligands in autoimmune diseases. TLRs have become attractive targets for developing immune modulators to treat a number of diseases, including cancers and infectious, respiratory and autoimmune diseases, and for use as vaccine adjuvants.