Jerini AG and Merck KGaA Announce Collaboration to Develop Small Molecule Cancer Drugs.

Business Editors/Health/Medical Writers

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BERLIN & DARMSTADT, Germany--(BUSINESS WIRE)--Jan. 28, 2004

Jerini AG and Merck KGaA today announced a collaboration agreement to jointly develop small molecule inhibitors against an undisclosed target for oncology.

Prior to the agreement, Jerini identified novel proprietary small molecule lead series by applying its Peptides-to-Drugs (P2D) approach. Jerini and Merck are joining forces to further develop Jerini's compounds. Initiation of pre-clinical development is planned for 2005.

Under terms of the agreement, Jerini will receive an upfront payment, personnel funding, milestone payments, and royalties. Merck obtains worldwide rights for all indications in cancer, cardiovascular diseases, diabetes and thyroid disorders. Jerini could receive in excess of EUR 50 million if the product is approved. Further financial details were not disclosed.

"We are extremely pleased to enter into this agreement with Merck, which is a major milestone for Jerini," said Jens Schneider-Mergener, PhD, Chief Executive Officer, Jerini AG. "It validates our novel Peptides-to-Drugs approach and demonstrates that it can create valuable collaboration opportunities with attractive partners."

"In line with our goal to become a major player in oncology, we have identified Jerini as an attractive partner whose expertise and approaches nicely complement our in-house activities," said Dr. Inge Lues, Vice President, Global Preclinical R&D, Merck KGaA.

The market for new cancer therapeutics is large and growing. Current annual global spending on cancer therapeutics, estimated to be USD 25 billion, is expected to grow about 3.5 percent a year over the next several years.

About Jerini AG:

Jerini AG (www.jerini.com) is a drug discovery and development company based in Berlin, Germany. The company has built a pipeline of several preclinical and two clinical projects (phase II) with its proprietary Peptides-To-Drugs (P2D) discovery platform. P2D addresses extra- and intra-cellular targets and was developed to overcome the limitations of conventional HTS or protein-based discovery approaches. P2D includes massive parallel syntheses and screening of peptide leads, pharmacophore identification and transformation into peptidomimetic and/or small molecule drugs. The peptide lead to a small molecule conversion step is a direct process that does not include any intermediate modifications of the peptide lead. It is supported by medicinal chemistry and cheminformatics and guided by matching the pharmacophore derived from massive peptide SAR data information against a virtual small molecule library. Jerini's platform allows the rapid identification and/or optimization of agonists and antagonists for (difficult) target proteins. The technology has been successfully demonstrated in in-house and partnered programs for highly valuable but difficult targets where conventional methods have failed. Jerini's approach creates value by reducing time and costs and by decreasing attrition rates.

About Merck KGaA

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With more than 34,500 employees in 53 countries, the Merck Group generated sales of EUR 7.5 billion in 2002. Founded in 1668 in Darmstadt, Germany, the company aims to be a world leader within its core businesses of pharmaceuticals and chemicals. The Merck Group strongly believes the key to its long-term business success is innovative products created by entrepreneurial and talented employees. Merck groups its operating activities under Merck KGaA, in which the Merck family holds 74% and the remaining 26% is publicly traded. The former U.S. subsidiary, Merck & Co., has been a completely independent company since 1917.