Merck Serono has joined forces with biopharmaceutical company Ablynx in a deal that could be worth more than 335 million euro to co-develop therapeutic proteins for two targets in oncology and immunology.

Known as nanobodies, the new class of antibody-derived biologic drugs are touted as being more beneficial than conventional antibodies and other fragments.

The Ablynx technology has been picked up before; last year, Ablynx signed a deal with Boehringer Ingelheim for 1.3 billion euros to develop nanobody therapeutics, and in 2006 the Belgian company made a deal with Wyeth to develop nanobodies against tumour necrosis factor-alfa (TNF).

Dr Bernhard Kirschbaum, Executive Vice President of Research at Merck Serono, said about the new deal: “We believe that nanobodies have the potential to provide innovative drugs combining the best features of monoclonal antibodies and small molecules.”

As part of the deal, Ablynx will receive an upfront cash payment of 10 million euros, with total development and commercial milestones possibly reaching up to 325 million euros should a product be approved in multiple indications in all major markets and if Ablynx chooses to opt-out.

Under the terms of the agreement, both companies would equally share all R&D costs and an equal contribution from Ablynx to each programme would mean the company would be eligible to receive 50% of profits - an amount that could be in the billions should the product reach the market. Ablynx also has the option to opt-out partly or fully during the R&D programmes.

“We are very pleased to enter into this partnership with Merck Serono … this type of risk and reward sharing collaboration underlines Ablynx’s maturing capabilities and collaboration strategy, whereby we can leverage on the resources and expertise of our partners to advance nanobodies more quickly into the clinic while retaining an equal share of the value created,” said Edwin Moses, chief executive of Ablynx.