Avalon Pharmaceuticals, Inc. (AVRX)

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AVRX is currently a Buy on any weakness in the PPS.

GERMANTOWN, Md. (AP) -- Avalon Pharmaceuticals Inc. said Tuesday it is collaborating with Merck & Co. to develop inhibitors for an undisclosed target, focusing on cancer.
Avalon will use its AvalonRx platform to screen a select set of compounds and identify possible targets. The company could receive up to $200 million in milestone, regulatory and other payments as part of the agreement.

Merck will be responsible for clinical development, regulatory approval and commercialization of any potential product candidates, the company said.

Shares of Avalon jumped $1.36, or 29.4 percent, to $5.99 in after-hours trading after falling 4 cents to close at $4.63 on the Nasdaq Stock Market.

Shares of Merck rose 42 cents to close at $44.67 on the New York Stock Exchange.