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Idera Pharmaceuticals

(IDRA) - Get Free Report

said Wednesday it has partnered with

Merck KGaA

in a cancer-targeting research and development deal.

Cambridge, Mass.-based Idera will exclusively license its DNA-based compounds, TLR9 agonists IMO-2055 and IMO-2125, to Merck KGaA for use in cancer applications other than vaccines. The Germany-based pharmaceutical and chemical company will pay Idera $40 million upfront, up to $381 million in milestone payments as well as royalties should the products make it to market.

Idera's IMO-2055 is in a phase IIa trial in patients with renal-cell carcinoma. IMO-2055 is currently in a phase Ib trial in combination with


( DNA) and

OSI Pharmaceutical's

( OSIP) Tarceva and Genentech's Avastin in patients with advanced non-small cell lung cancer as well as in a phase I trial in combination with chemotherapy agents in patients with difficult-to-treat solid tumors.

IMO-2125 is in a phase I trial in patients with chronic hepatitis C who have had no success with standard treatment -- an indication that will not be part of the Merck KGaA agreement.

Idera rose 66 cents, or 5.9%, to $11.95 in recent trading Wednesday.