LONDON (ShareCast) - (Sharecast News) - IP Group said its Artios portfolio company had signed a research deal with Merck of Germany that could more than double the value of the investment company's stake.
Artios and the Darmstadt-based drug company have signed a three-year deal to cooperate on discovering and developing cancer treatments.

Merck will pay Artios $30m (£22.4m) upfront and if Merck chooses to exercise its option Artios will be eligible for up to $860m for each of eight targets and double-digit royalty payments. Artios has opt-in rights for joint development and commercialisation with Merck for the programmes.

IP owns 11.7% of Artios and the stake was valued at £11m at the end of June. The FTSE 250 group said the estimated value of its stake could increase by £5m-£15m because of the deal with Merck and that it would finalise the valuation during its annual results process.

"Under the terms of the agreement, the companies will leverage Artios's proprietary nuclease targeting discovery platform to jointly identify multiple synthetic lethal targets for precision oncology drug candidates," IP said. "Merck will contribute its significant expertise and resources in the field of DNA damage response and will have options to license up to eight nuclease targets with exclusive worldwide rights to develop and commercialise select therapeutics discovered under the collaboration."

IP shares rose 1.1% to 92p at 10:28 BST.

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