Metabasis Therapeutics, Inc. and Merck & Co., Inc. announced that they have formed a collaboration to research, develop and commercialize novel small molecule therapeutics for the treatment of hepatitis C virus infections (HCV). Under the terms of the agreement, Merck will contribute drug candidates to the collaboration and Metabasis will apply its liver targeting, HepDirect prodrug technology with the objective of identifying novel drugs for treatment of this disease. Metabasis has also granted Merck certain option rights to develop and commercialize drugs for HCV that may be discovered independently by Metabasis.

It is estimated that up to 3 per cent of the world population have been infected with HCV, according to NHANES III (Third National Health and Nutrition Examination Survey), which means there are over 170 million chronic carriers at risk of developing liver cirrhosis and/or liver cancer. Nearly 4 million Americans are infected with HCV and about 2.7 million Americans (70 per cent) of those are chronically infected with HCV. In 2002 the NIH issued a report, which conservatively estimated that HCV is responsible for 10,000 to 12,000 yearly deaths in the United States, and the number of people diagnosed with chronic HCV is expected to increase fourfold from1990 to 2015.

Merck has paid an execution fee to Metabasis and will fund Metabasis' efforts to synthesize suitable HepDirect prodrugs of the Merck HCV compounds. The agreement provides Merck with the exclusive responsibility for further development and commercialization of HepDirect HCV drugs that result from the collaboration. Should a collaboration drug be successfully developed, Metabasis will receive milestone payments, and will share in the commercial success of any resulting product through a royalty on worldwide sales. At the end of the first year of the collaboration, Merck will also have the option to extend their exclusive use of the HepDirect technology for HCV. In this case, an additional fee will be paid and milestone payments and royalties will be increased. Should Merck elect to license a HCV product discovered solely by Metabasis, additional fees, milestone payments and royalties will be required.

According to Metabasis, the proprietary HepDirect technology is a prodrug technology that specifically targets production of the biologically active form of certain drugs to the liver and preclinical studies have shown that use of the HepDirect technology may result in higher active drug concentrations in the liver and decreased exposure to non-liver tissue. Accordingly, HepDirect prodrugs may have the potential to improve efficacy, reduce toxicity and thus improve the treatment of liver and liver-related diseases.

"By combining Merck drug candidates with our proprietary HepDirect liver targeting technology, we have an opportunity to rapidly develop effective new treatments for this devastating and widespread disease," said Dr Paul Laikind, chairman, president and CEO of Metabasis. "We believe Merck's leadership in drug development, marketing, and sales will best position us to take advantage of this opportunity. We are very pleased to have Merck as a partner."