Adelaide-based drug research and development group Bionomics has secured a minimum US$20 million joint development deal in the USA.

The company announced today it has entered into an exclusive Research Collaboration and License Agreement with Merck for its BNC375 research program targeting cognitive dysfunction associated with Alzheimer’s disease and other conditions.

Under the agreement, Merck will fund all research and development, including clinical development, and will be responsible for worldwide commercialisation of any products from the collaboration.

Bionomics will receive upfront payments totalling US$20 million and is eligible to receive up to US$506 million for achievement of certain research and clinical development milestones and undisclosed royalties on any product sales.

“We are very excited to work with Merck to progress new therapies for cognitive impairment in conditions such as Alzheimer’s disease,” Dr Deborah Rathjen, CEO & Managing Director of Bionomics said in a statement to the stock exchange today.

“We believe that the combination of Bionomics’ innovative approach and technologies has the potential to rapidly advance new treatments.”

“This significant agreement, our second with Merck, further validates our drug discovery platforms.”

In July 2013, Bionomics announced an option and license agreement with Merck to discover and develop novel small molecule candidates for the treatment of chronic pain.

Under the terms of that agreement, Merck has the option to exclusively license a compound from Bionomics for development and commercialisation.

Shares in Bionomics resumed trade at 43 cents this morning – well short of its 83 cents  high position late 2013.