By Christopher P. Singer

Avalon Pharmaceuticals® announced in a March 7, 2007 press release a collaboration with Merck & Co., Inc. for drug discovery, development, and commercialization of inhibitors of a target that is important in cancer development.  Avalon brings its AvalonRx® screening technology platform to the collaboration and will screen a number of candidate compounds from Merck’s proprietary compound library.  Avalon will identify potential inhibitor compounds of the unmentioned target which has, according to the release, proven difficult to inhibit.  Avalon will select and optimize compounds to the preclinical stage, where Merck will assume responsibility for clinical development, regulatory approval, and commercialization of any candidate inhibitor compound.

Avalon has the potential to receive milestone payments in excess of $200 million as well as royalty payments on any marketed drug products.