Bionomics Ltd (ASX:BNO) has received US$736,815 in licensing funds from MSD Australia (known as Merck in the U.S.) as part of a license agreement for developing cancer treating protein inhibitors.
Bionomics has partnered with the Australian Cooperative Research Centre for Cancer Therapeutics (CTx) to develop protein arginine methyltransferase 5 (PRMT5) inhibitors.
This receipt of funds by Bionomics is part of an initial payment of US$15 million to Cancer Research Technology (CRT), with total future payments from Merck potentially reaching US$500 million alongside additional royalty payments on sales.
As part of the agreement, payments are shared between CRT, the Wellcome Trust, CTx and CTx’s Australian research partners including Bionomics.
Bionomics will be a potential beneficiary of future milestone payments and royalties.
The market for the inhibitor is substantial, as high levels of PRMT5 are found in mantle cell lymphoma, leukaemia, melanoma, lung and breast cancers and are linked to low survival rates.
PRMT5 inhibitors also have application potential in treating non-cancer blood disorders such as sickle cell disease and beta thalassemia.
Bionomics is also developing its lead drug candidate BNC210, focused on the treatment of anxiety and depression.
Additionally, Merck will fund all R&D for Bionomics to develop molecule drugs for the treatment of cognitive impairment in ADHD, Alzheimer’s disease and other conditions.
In October 2015, Merck had an equity investment of $12.86 million in Bionomics.
The company is well funded with more than $51 million in cash as at 31 March 2016.
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