Merck has launched a research partnership with Alectos Therapeutics, a Vancouver-based biopharmaceutical company, to develop drugs to fight Alzheimer’s Disease based on an enzyme believed to be involved in the development of the disease and potentially other disorders.

Under the agreement, Merck paid Alectos an undisclosed sum upfront and will fund research to study the small Canadian company’s existing portfolio of compounds targeting Alzheimer’s Disease. If Merck develops any of the compounds, Alectos is eligible to receive up to $289 million in upfront fees, research, development and regulatory milestones and tiered royalty payments on sales of products from the collaboration.

Alectos was spun-off from Simon Fraser University in Burnaby, British Columbia, where academic research on the chemical and biological structure of the enzyme, known as O-GlcNAcase, and its role in health and disease led to the development of the compounds.

“This is an important validation of our scientific leadership in this area and we look forward to working with Merck to realize the full value of this novel mechanism for a range of neuroscience disorders,” said Ernest McEachern, Ph.D., Alectos’ CEO.

An estimated 35 proposed Alzheimer’s drugs are in the development pipeline from 30 companies, of which 10 are in phase I, five in phase II and three in phase III. The vast majority of these drugs target amyloid beta, a protein fragment that forms plaques—gummy substances that form filaments that clog the spaces between nerve cells—in the brain that lead to a loss of mental function as billions of neurons begin to die in droves.

While much of the interest in next-generation Alzheimer’s treatments are focused on targeting amyloid plaques, pharmaceutical companies so far have little to show, as there is no treatment available to halt the progression of the debilitating disease that affects 5.3 million Americans.

Major companies including Pfizer, Johnson & Johnson and Elan Pharmaceuticals and their partners have struggled to develop Alzheimer’s drugs. Just last week Eli Lilly announced it was halting development of semagacestat, a gamma secretase inhibitor, because preliminary results from two phase III studies showed it did not slow disease progression and was associated with worsening of clinical measures of cognition and the ability to perform activities of daily living.

Even Merck 21 months ago terminated further testing in humans of a growth hormone which had shown encouraging results in mice but did not appear to reduce human symptoms of Alzheimer’s Disease.

“The recent failure of amyloid-beta-targeted therapies in phase III clinical trials suggest that it is timely and prudent to consider alternative drug discovery strategies for Alzheimer’s Disease,” Kurt R. Brunden, Ph.D., research associate professor of pathology and laboratory medicine at the University of Pennsylvania School of Medicine, wrote in a research paper last October.

Now Merck, headquartered in Whitehouse Station, N.J., is betting that Alectos’ different approach will lead to success.

“Effective medicines to treat the devastating consequences of Alzheimer’s Disease are greatly needed, and we are committed to achieve that goal,” said Darryle Schoepp, senior vice president and franchise head of neuroscience at Merck Research Laboratories. “This collaboration represents a truly innovative and promising new therapeutic approach in the Alzheimer’s Disease field.”

—Ronald Rosenberg