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(Adds terms of deal, details on WHO-coordinated trials; updatesshare movement)
By Ransdell Pierson
Nov 24 (Reuters) - Merck & Co Inc on Monday said itwould buy worldwide commercial rights to NewLink Genetics Corp's experimental vaccine against the Ebola virus.
NewLink, whose subsidiary licensed commercial rights to therVSV-EBOV vaccine in 2010, said it would receive $50 millionplus royalties from Merck.
Large late-stage trials of the product could begin earlynext year, said Merck, the No. 2 U.S. drugmaker and one of theworld's biggest makers of vaccines.
Merck, which will be able to speed up and significantlyboost production, will take over development of the vaccine andany follow-on products.
The Public Health Agency of Canada, which originallydeveloped the vaccine, will retain non-commercial rights to it.
The deal between Merck and NewLink, a tiny biotechnologycompany based in Ames, Iowa, comes as other drugmakers are alsoracing to test and scale up production of treatments andpreventive vaccines for Ebola, which has killed more than 5,400people this year.
It is the worst Ebola outbreak on record. Guinea, SierraLeone and Liberia account for all but 15 of the deaths.
The Walter Reed Army Institute of Research and the U.S.National Institute of Allergy and Infectious Diseases, part ofthe National Institutes of Health, are conducting early-stagetrials of the NewLink vaccine. The trials involve healthyvolunteers and are testing whether the vaccine is safe andprovokes a protective immune response.
Should those Phase I studies prove favorable, the NIH plansto begin large late-stage trials early next year. The WorldHealth Organization is also coordinating early-stage trials inSwitzerland, Germany, Kenya and Gabon.
In a regulatory filing on Monday, NewLink said Merck wouldpay it $30 million upfront and $20 million once larger formaltrials begin. The company will also be eligible to receiveroyalties on sales in certain markets.
Shares of NewLink were down 4.3 percent at $33.81 in morningtrading, while Merck fell 0.5 percent to $59.34.
Rival drugmaker GlaxoSmithKline Plc is developingits own Ebola vaccine with the NIH and plans to build astockpile of thousands of doses for emergency deployment ifresults are good. (Additional reporting by Vidya L Nathan in Bangalore; Editingby Lisa Von Ahn and Siddharth Cavale)
