METABASIS THERAPUTICS IN JOINT RESEARCH WITH MERCK

Metabasis Therapeutics and Merck recently said they agreed to jointly research, develop and market small-molecule therapies to treat conditions including diabetes, high cholesterol and obesity.

The agreement is worth an estimated $54 million to $74 million in future revenue for Metabasis, the companies said.

Under the collaboration, the companies will study possible applications using a liver enzyme called AMP-activated protein kinase. Merck will pay Metabasis $5 million upon signing the agreement and will fund Metabasis' research efforts.

Merck bears the primary financial responsibility, said Metabasis, including clinical development of any resulting products and has the right to market them worldwide. Metabasis, meanwhile, will be able to earn fees at certain milestones during a drug's development. If any therapy makes it to market, Metabasis will receive a royalty on net sales and will have the option to co-promote it in the United States.

If a drug is developed and marketed to treat one disease, the total cash payments to Metabasis, excluding royalties, would be $54 million - plus another $20 million if the drug is approved to treat additional diseases.

Metabasis uses a proprietary technology to research compounds that activate a protein kinase in the liver that regulates fat and cholesterol levels.