Merck KGaA is linking up with Israel's Compugen to establish a start-up company, to be called Neviah Genomics, focused on the discovery and development of novel biomarkers.

The German company's Merck Serono Ventures will provide the initial funding for Neviah Genomics, while Compugen will use its predictive discovery technologies and receive an equity ownership in the new company, plus the right to royalties. Further financial details were not disclosed.

Neviah will operate out of the state-of-the-art facilities inaugurated last month at Merck Serono’s Israeli R&D centre and will be the first start-up to get funded through the latter's biotech incubator in the country. The deal comes out of a successful collaboration between the two firms for the discovery of biomarkers during 2009.

Merck Serono and Compugen believe Neviah "could satisfy the growing market need for products to predict toxicity profiles of lead drug candidates at an early stage of development, thereby minimising attrition and mitigating risk of late-stage drug failure".

Susan Herbert, head of global business development and strategy at Merck Serono, said Neviah is "a perfect illustration of our goals behind the establishment of the Israel biotech incubator, to leverage Israeli science and know-how and get access to novel products and technologies for the benefit of Merck Serono’s core therapeutic areas".  She added that the venture represents "a unique basis for a start-up to enter this emerging field that has the potential to significantly reduce the risk of drug discovery and development".