In its second licensing agreement with a major pharmaceutical company, Codexis, a developer of biocatalysts for the pharmaceutical and fine chemical industries, has agreed to license its CodeEvolver platform technology to US drugmaker Merck.

Under the terms of the deal, Merck will be awarded a non-exclusive license to use the protein engineering platform technology to develop novel enzymes for its pharmaceutical products.  Also as part of the agreement, a CodeEvolver protein engineering platform will be located at a Merck research site.

Codexis will be eligible to receive up to $18 million over the next two years, including $5 million to be paid at the signing, followed by an additional $13 million upon satisfactory completion of certain technology transfer milestones.

The catalyst manufacturer ill also be eligible to receive payments of up to maximum of $15 million for each pharmaceutical ingredient (API) using novel enzymes developed by Merck using the CodeEvolver technology and used for commercial manufacturing purposes.

“This licensing transaction builds upon our productive eight-year relationship with Merck and further validates the ability of CodeEvolver to effectively and cost-efficiently improve certain manufacturing processes,” said Codexis CEO John Nichols.

“We view licensing agreements involving our CodeEvolver technology as an attractive component of our business model.  It allows us to monetize our core technology, while continuing to provide services and supply products to customers under our traditional business model,” Nichols added.

Rich Tillyer, senior vice president, and head of Global Chemistry, Merck Research Laboratories., said increased access to the CodeEvolver technology positions will allow the drugmaker to potentially expand the use of enzymes in its pharmaceutical manufacturing processes.