The biopharmaceutical company lycera has announced a collaboration agreement with Merck, Sharpe & Dohme (MSD) that will focus on developing and commercialising small-molecule therapies for treating a range of autoimmune diseases.

Under the terms of the agreement, Lycera will receive an upfront payment and research funding, and is also eligible to receive more than $300 million in research, development, regulatory and commercialisation milestone payments. MSD will be responsible for clinical development and will have global marketing and commercialisation rights to any products that may be developed. Lycera will be entitled to royalty payments, and development and sales milestones, on global sales from any products resulting from the collaboration.

The collaboration builds on a previous agreement between the two companies, announced in 2011, targeting the retinoic acid related orphan receptor (RORγt), which is a key transcription factor coordinating the differentiation of T-helper 17 cells and the production of highly pro-inflammatory mediators, such as interleukin-17.

In a statement, Rupert Vessey, senior vice president, global scientific strategy, at Merck Research Laboratories, said, “There are substantial unmet medical needs and opportunities in autoimmune disorders, and new targets representing attractive opportunities that we are very pleased to pursue through our new collaboration with Lycera.”