BioWorld Today Correspondent

Shares in Addex Pharmaceuticals SA (SWX:ADXN) gained 12.33 percent Monday on news that it was entering a drug discovery and development alliance with Merck & Co. Inc., in Parkinson's disease and potentially other central nervous system (CNS) indications that could be worth up to $110 million in up-front and milestone payments for the successful development of one drug.

Geneva-based Addex is receiving an up-front payment of $3 million and would get another $106.5 million in research, development and regulatory milestones for the first product developed in multiple indications. The company could earn up to $61 million in further milestones for the successful development of additional compounds. It also would receive royalties on product sales, and it has retained an option to co-promote in selected European Union countries.

The degradation of dopaminergic (or dopamine-producing) neurons in the brain is one of the central features of Parkinson's. It leads to imbalances in the inhibitory and excitatory signals that control movement and other functions. Administration of levodopa, a precursor of the neurotransmitter dopamine, can provide benefit but its use has to be limited due to the accumulation of serious side effects.

The alliance between Merck and Addex focuses on a novel mechanism, involving positive allosteric modulation of metabotropic glutamate receptor 4 (mGluR4), a G protein-coupled receptor that binds the excitatory neurotransmitter glutamate. Animal studies have indicated that activation of mGluR4 reduces transmission of nerve signals at synapses that are overactive in models of Parkinson's and in patients with the condition.

Merck, of Whitehouse Station, N.J., has gained an exclusive license to Addex's internal program in the area, which is at the lead optimization stage. Previous efforts to find agonists of mGlu4R have foundered because of the difficulty in generating drug-like molecules that have the desired biological activity. "It is due to the nature of the binding site," Addex CEO Vincent Mutel told BioWorld Today.

Addex's approach avoids the need to focus on the receptor's ligand-binding site. "We have been able to find compounds that are interesting enough to justify Merck entering this collaboration," he said. "Not only have we shown that we can find these molecules, we know how to optimize them as well."

Since the mGluR4 signaling system is independent of dopamine, the aim of the program is to find compounds that can complement and extend levodopa therapy, by allowing clinicians to reduce the dose, for example, or to delay its introduction.

Scientists at Merck Research Laboratories have published extensively on mGluR4 already and have demonstrated proof of concept of the approach in rats.

"They have really been pioneering in the field," Mutel said. Merck's position in the area was boosted further by its recruitment earlier this year from Indianapolis-based Eli Lilly and Co. of Darryle Schoepp as senior vice president and franchise head of neuroscience for Merck Research Laboratories (MRL). Schoepp is regarded as one of the world's leaders in researching the role of glutamate signaling in disease.

Shares in Addex closed at CHF41 (US$36.35) Monday, up CHF4.50 from Friday's close of CHF36.50.