Ablynx has further expanded its relationship with Merck Serono and entered into a third agreement to co-discover and co-develop Nanobodies against two targets in osteoarthritis. The companies will exploit the unique Nanobody features and will develop multi-specific products, which have extended half-lives.

Under the terms of the agreement, Ablynx will receive an upfront payment of €20 million payable in two tranches over the next three months and will be fully responsible for all activities and costs for each programme, excluding manufacturing costs and costs relating to certain in vivo models, up to the delivery of the pre-clinical package that will form the basis of an Investigational New Drug (IND) filing or IND equivalent filing. Ablynx is entitled to receive a further €15 million for each program if the pre-clinical packages are accepted by Merck Serono. At that point, Ablynx has the option to continue with Merck Serono on a 50:50 co-development basis and share the resulting profits, or to convert this collaboration into an exclusive, worldwide licensing deal with milestone payments and tiered royalties.

Dr. Edwin Moses, chairman and CEO of Ablynx commented: "We are very pleased to have entered into a third agreement with Merck Serono a year after entering into our second collaboration. Merck Serono is one of our most valued partners and the innovative and creative deal structure that we have put in place represents a "win-win" for both parties. Such new deals with an existing partner are clear signs of success of the earlier programmes in the partnership and reflect well on the strength of our Nanobody platform and the potential drug products it can create."

In September 2008, Merck Serono and Ablynx entered into an agreement to co-discover and co-develop Nanobodies against two disease targets in oncology and immunology. In October 2010, the companies entered into a second agreement to co-discover and co-develop Nanobodies against an inflammatory disease target.