Addex Pharmaceuticals of Switzerland could see its coffers boosted by more than $170.5 million following the signing of a deal with Merck & Co to develop a new class of oral drugs to treat Parkinson’ disease.

The two firms are looking to develop positive allosteric modulators, which will target the metabotropic glutamate receptor 4. Current treatments for Parkinson's focus on dopamine replacement but most patients reach a stage where these drugs are no longer effective, coupled with debilitating side effects. It is now thought that bypassing the dopamine system may provide a more effective treatment strategy and selective activation of mGluR4 is one way to do this, whilst reducing the side effects.

Merck notes that its scientists provided the first evidence that mGluR4 activation has potential for the treatment of Parkinson's, “however, a remaining challenge has been to make drug-like molecules that activate mGluR4 in a specific fashion”.

Financially speaking, Addex will receive $3 million upfront and is eligible for up to $106.5 million in R&D and regulatory milestones for the first product developed for multiple indications. Additional milestones of up to $61 million would be payable if a second and third product is developed and the Geneva-based firm will receive undisclosed royalties on sales of any products resulting from the collaboration.

Both companies will collaborate on preclinical development, while Merck will be responsible for clinical studies. Addex has an option to co-promote in certain European Union countries and its chief executive, Vincent Mutel, said that the deal is “another important validation of our leadership in allosteric modulation”.

News of the Merck link-up pushed Addex shares up 12.3% to 41 Swiss francs, a welcome boost to the stock which was floated in May after an initial public offering brought in 137 million francs. The shares have fallen back since then and dipped again in October when Addex discontinued development of an experimental smoking cessation treatment which had failed a mid-stage trial.