Under the terms of the agreement, AnalytiCon will provide Merck with natural product lead generation services until the end of 2009. Merck will have access to AnalytiCon's Megabolite technology which draws from its portfolio of more than 10,000 natural substances extracted from plants and microorganisms. AnalytiCon will apply its Megabolite process to isolate and characterise small molecule compounds from a variety of biosources to find novel and pharmaceutically active compounds on behalf of Merck. Attractive lead compounds will be jointly developed through preclinical research, one part of which will be a robust protocol to supply the two companies with amounts of the particular biologically active natural products in order to perform hit-to-lead optimisation cycles on an as-needed basis, the firms said. "Merck acknowledges the key role of natural products in the oncology therapeutic area. Therefore, the discovery of new chemical entities via bio-guided isolation of natural products is a strategy that we wish to pursue in cooperation with AnalytiCon," said Dr Peter Raddatz, president of NCE Technologies at Merck KGaA. "We expect that AnalytiCon will enhance our in-house natural product programme and add further novelty to Merck's drug discovery project." Natural compounds are a major source of new medicines, as nearly half of drugs brought to market in the last 20 years originated from compounds derived from nature. However, according to recent research, natural products have been going through a phase of reduced interest from drug discovery firms because of the greater effort necessary to isolate the active principles and elucidate the structures of products. AnalytiCon claims its structure elucidation is 50 times faster than standard methods and depending on the compound's degree of novelty, said nearly all structures can be identified within two hours. "The agreement is an important milestone in our work of supporting pharma-industry efforts to re-introduce natural products into their drug discovery concepts," said Lutz Muller-Kuhrt, CEO of AnalytiCon. The natural products space is not new territory for Merck. The German firm recently signed a deal with pharma company Chi-Med to develop new treatments for cancer with traditional Chinese medicines. The two companies agreed last November to develop small molecule anti-cancer drugs using Chi-Med compound library to help manufacture the products. With this latest deal, Merck is combining its biology know-how with AnalytiCon's expertise on dereplicating, isolating and structurally identifying biologically active natural products. Financial details of the agreement were not disclosed.