Merck & Co. Inc. initiated a clinical trial for a novel cognition drug candidate, triggering a $10 million milestone payment to Bionomics Ltd.

Merck and Bionomics entered a research and license agreement in June 2014 to develop candidates to treat cognitive dysfunction associated with Alzheimer's disease.

Under the agreement, Merck is responsible for funding all early-stage and clinical development of any candidate within the collaboration and worldwide commercialization.

Meanwhile, Bionomics received $20 million in upfront payments and is eligible for up to an additional $506 million for predefined research and clinical development milestones, plus eventual undisclosed royalties on any product sales.