Under the alliance, the companies will use the Nuclear Enriched Transcript Sort sequencing (NETSseq) technology platform of Cerevance to identify the targets.
Furthermore, Cerevance will simultaneously out-license a discovery-stage programme to Merck under the partnership.
According to the deal, Merck will make an upfront payment of $25m to Cerevance , which is also entitled to receive nearly $1.1bn development and commercial milestone payments.
Cerevance will also potentially receive royalty payments on sales of approved products resulting from the partnership.
The NETSseq technology platform has so far isolated and aided in the assessment of cell populations in numerous post-mortem, healthy and diseased human brain tissue samples collected from a variety of age groups and brain regions.
These human brain tissue assessments could reveal biological pathways behind neurodegenerative and psychiatric ailments that are otherwise difficult to detect in animal models or differentiated stem cells of human beings.
This platform can show new treatment targets that can be modified for correcting neural circuitry or decelerating the disease process.
Cerevance chief scientific officer Mark Carlton said: “The establishment of this collaboration with Merck, which comes on the heels of our positive Phase II data for CVN424 in patients with Parkinson’s disease, represents a significant milestone for Cerevance and reinforces the promise of our NETSseq technology platform.
“We believe we are well-positioned to identify novel targets for neurodegenerative diseases and look forward to collaborating with Merck to potentially bring forward transformative therapeutics for patients with Alzheimer’s disease.”
In July, Merck signed an agreement with Orion to develop and market the latter’s ODM-208 for metastatic castration-resistant prostate cancer.