HIGH POINT,Drug giant Merck could pay TransTech Pharma up to $26 million under a drug discovery and development contract, the two companies said Wednesday.

TransTech’s TTP Translational Technology, which is proprietary, will be used to explore therapeutic use for small molecules that are of interest to Merck.

Merk also will make milestone payments and royalty payments to TransTech. In exchange, Merck receives exclusive development and commercialization rights to any drugs that are developed.

“We were very impressed with TransTech’s platform technology and its ability to rapidly generate high quality lead candidates for difficult biological targets,” said Merv Turner, senior vice president of worldwide licensing and external research at Merck Research Laboratories. “Some of these leads in TransTech’s internal programs have progressed to human clinical trials validating their technology. We look forward to real progress in the discovery and development of novel therapeutics for our targets.”

The Translational Technology has already been used in researching pre-clinical and clinical drug candidates that would treat diabetes, cancer, inflammation, Alzheimer’s disease and thrombosis.

TransTech completed earlier this year its first Phase I drug trial for an anti-coagulant. Another drug — for the treatment of Alzheimer’s — is in Phase I trials.

The company has also raised $30 million in venture capital in a Series E round that closed in July.

“The combination of Merck’s discovery and development capabilities with TransTech’s Translational Technology(R) has the potential to result in the expedited discovery of patentable clinical drug candidates,” said Adnan Mjalli, the founder and CEO of Transtech.

Mjalli founded the company in 1999. It now employs 75 people.

TransTech: www.ttpharma.com