THE CANADIAN PRESS

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MONTREAL - Ambrilia Biopharma Inc. (TSX:AMB) said Tuesday that it has submitted a request for arbitration with the International Chamber of Commerce to resolve a dispute with Merck & Co. Inc.

Ambrilia signed an exclusive licensing agreement granting Merck in October 2006 for the worldwide rights to its HIV protease inhibitor program, including lead compound PPL-100.

The deal included an upfront payment of US$17 million and potential cash payments totalling $215 million to Ambrilia upon successful completion of development, clinical, regulatory and sales milestones, and royalties on all future product sales.

However Ambrilia said Merck placed Ambrilia's HIV protease inhibitor PPL-100 on a development hold in July pending outcome of additional basic science efforts to evaluate other PL-100 prodrugs and formulations options.

"Our team at Ambrilia has worked hard and been successful in building a strong HIV protease inhibitor program with corresponding intellectual property," Ambrilia president and chief executive Philippe Calais said in a statement.

"Based on recent events, however, Ambrilia believes Merck has not met its obligations. Ambrilia not only continues to believe in the potential of PPL-100 and its related compounds to offer advantages to HIV patients over the currently commercialized protease inhibitors, but also believes its positions respecting the partnership will prevail in arbitration."