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12:00 AM
 | 
Jan 07, 2008
 |  BioCentury  |  Strategy

The difference between 4 and 5

In the space of a month, Addex Pharmaceuticals S.A.and Merck & Co. Inc. have done two deals that help benchmark the value of research-stage and preclinical assets. The valuations of the two deals were determined by market size and the compounds' potential in other indications, in addition to other factors such as medical need and innovation.

Last month, Merck in-licensed Addex's preclinical positive allosteric modulators of metabotropic glutamate receptor subtype 4 (mGluR4) to treat Parkinson's disease (PD) and other undisclosed indications. The deal provided Addex $3 million up front and up to $167.5 million in milestones, plus royalties.

Last week, the companies partnered to develop and market ADX63365 and other positive allosteric modulators of mGluR5 to treat schizophrenia and other undisclosed indications. ADX63365 is in preclinical development. Addex will receive $22 million up front and up to $455 million, plus royalties, for the first compound developed in two indications. For a second compound in two indications, Addex will be eligible for $225 million in additional milestones, plus royalties.

In both deals, the companies will...

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