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Merck KGaA, Ablynx sign up to $484 mln drug deal

Belgium's Ablynx NV, which is using llamas to develop next generation antibody drugs, has signed a drug development deal with Germany's Merck KGaA worth up to €335 million ($484 million).

Ablynx and Merck will contribute equally to discover and develop so-called nanobodies against two unspecified targets in cancer and immune system disease, sharing equally in the resulting profits.

The alliance is the latest in a series of partnerships for Ablynx, which also has deals with Novartis AG, Wyeth and Boehringer Ingelheim.

The Ghent-based company plans to catch a new wave in antibody medicine by capitalizing on a quirk of nature, which means llamas and camels possess an unusual type of antibodies that are much smaller than those in humans and other animals.

Smaller antibody fragments could reach new targets in the body and potentially be given by mouth rather than injection.

Other companies working on different kinds of next generation small antibody medicines include GlaxoSmithKline Plc - which bought UK-based Domantis for Ł230 million ($410 million) in 2006 - and Denmark's Genmab.

Under the deal with Merck, Ablynx gets an upfront cash payment of €10 million and will be entitled to milestone payments of up to €325 million, depending on the success of drug projects. (Reuters)