The human immune system is capable of recognizing cancer cells as abnormal, leading to an immune response. However, the human body’s immune response to cancer cells is generallly weak or, in some cases, absent. Idera believes that its TLR agonists may enhance the body’s immune response to cancer cells, providing a potential means to control cancer cell growth.  Idera has selected IMO-2055, a TLR9 agonist, as a lead candidate for oncology.

In December 2007, Idera entered into an exclusive, worldwide licensing and collaboration agreement with Merck KGaA, of Darmstadt, Germany, for the research, development, and commercialization of Idera's TLR9 agonists for the treatment of cancer. Under the agreement, Idera agreed to exclusively license the applications of its lead TLR9 agonists, IMO-2055 and IMO-2125, for treating cancer, excluding the use of these compounds with cancer vaccines. In addition, Merck KGaA and Idera have agreed to engage in a research collaboration to identify a specified number of novel, follow-on TLR9 agonists, which will be derived using Idera’s chemistry-based approach and for which Merck KGaA will have the exclusive right to use for treating cancer, excluding the use of these compounds with cancer vaccines.

Under the terms of the agreement:

• Merck paid Idera an upfront license fee of $40 million;
• Idera is eligible to receive milestone payments from Merck KGaA of up to EUR 264 million (currently $381 million, based on exchange rate December 18, 2007), depending on success in achieving clinical development and commercialization;
• Idera is eligible to receive royalties on sales of any products developed and commercialized under the agreement.