Assistant Managing Editor

Australian firm Bionomics Ltd. landed a collaboration with Merck Serono aimed at developing an oral treatment for multiple sclerosis and other autoimmune diseases based on compounds from Bionomics' Kv1.3 program.

Under the terms, Bionomics gets an up-front payment of $2 million, in addition to committed research funding, from Merck Serono, a division of Darmstadt, Germany-based Merck KGaA. In addition, Merck Serono will support all development activities, including clinical work, and will pay Bionomics development and commercial milestones of up to $47 million for each compound selected.

Beyond that, Adelaide, Australia-based Bionomics will be eligible to receive undisclosed royalties on net sales of any products resulting from the collaboration.

The compounds at the center of the deal were discovered by Bionomics and target the potassium ion channel Kv1.3, a known modulator of the immune system. Kv1.3 is a target found on immune cells that are associated with nerve cell damage in patients with MS, and by inhibiting the proliferation of those cells, Bionomics and Merck Serono might be able to treat MS, as well as other autoimmune conditions such as arthritis.

Bionomics CEO Deborah Rathjen called the deal "an important milestone" for the company that validates its discovery approach.

The partnership also puts the firm's work in autoimmune diseases into the hands of a company with a successful track record in MS. Merck Serono markets Rebif (interferon beta-1a), a disease-modifying drug approved to treat the relapsing forms of MS, as well as Novantrone (mitoxantrone), which is targeted for worsening forms of MS.

Merck Serono also is working on additional MS therapies, including cladribine, an oral MS drug in Phase III development.

For Bionomics, the deal bolsters its growing pipeline of drugs for cancer and central nervous system disorders. On its own, the firm is developing BNC105, a vascular disrupting agent for cancer that is in Phase I studies under an FDA-cleared investigational new drug application.

It also is working on BNC210, which is expected to start Phase I testing later this year in anxiety, and has an earlier-stage program aimed at creating new epilepsy treatments based upon modulators of the GABA-A receptor.

Shares of Bionomics (ASX:BNO) closed unchanged Wednesday at A36 cents (US34 cents).