Merck & Co has linked up again with Bionomics, this time for Alzheimer’s disease, in a deal that could be worth over half a billion dollars to the Australian biotech.

The collaboration centres around BNC375, a compound which has displayed potent efficacy in animal cognitive impairment models. As well as Alzheimer’s, the alliance will look at other central nervous system disorders, including schizophrenia, ADHD and Parkinson’s disease.

Cashwise, Merck is paying $20 million upfront and up to $506 million for achievement of certain research and clinical development milestones, plus royalties. The US giant is also  funding all R&D and will be responsible for worldwide commercialisation of any products from the collaboration.

Rupert Vessey, head of early development and discovery sciences at Merck Research Laboratories, said the firm is happy to sign a new scientific collaboration with Bionomics, saying the latter’s “capabilities and overall expertise in discovery and characterisation of small molecules for this neuroscience target class is impressive”.

The firms first teamed up in July 2013 when they agreed to discover and develop small molecules for the treatment of chronic pain, including neuropathic pain. That deal could be worth up to $172 million, plus royalties.